This is the second part of a research series on the most popular emerging technologies. The series follows up on a report Digiday produced five years ago to discover how technologies previously reported on have evolved and to explore new technologies that have since emerged, including blockchain and robotics. In this segment, we look at how marketers are using virtual reality and augmented reality.
Back in 2017, marketers were more eager to invest in virtual reality than in augmented reality. But over the past five years, they changed their tune. In 2022, more marketers are using augmented reality for brand engagement and sales than are still dabbling in virtual reality.
Of the two technologies, augmented reality (AR) lends itself more readily to marketer applications by allowing consumers to facilitate pre-buying behaviors like virtually trying on clothing or makeup, or overlaying a car into a driveway to gauge its size. But some marketers are using virtual reality (VR) to entertain existing customers and acquire new ones by placing products within virtual events like fashion and music festivals where customers can interact organically with the brands.
The pandemic propelled usage of both technologies since VR offered the ability to remotely gather in virtual spaces when in-person events were canceled and AR offered the means to sample household or personal products virtually from home. “As a result of time, the technology becoming more accessible, and partially as a result of Covid, there has been a big uptick in people becoming more reliant on AR in their daily digital life,” said Fred Gerantabee, chief experience officer at FGX International, an eyewear company owned by EssilorLuxottica.
By the end of 2021, nearly two years into the pandemic, the U.S. augmented, virtual and mixed reality market was worth $28 billion and was projected to reach more than $250 billion by 2028, according to Statista, giving marketers good reason to invest in the technologies.
Companies like Meta and Google are spending more to build out AR and VR tools — improving hardware and software for headsets and smart lenses and glasses — thereby priming virtual and mixed environments for marketer participation. And then there’s the looming potential of the metaverse. Given these factors, it’s no surprise that marketing and advertising executives want to take advantage of existing opportunities for using AR and are more cautiously experimenting with VR.
Carter Jensen, global e-commerce lead of direct to consumer at General Mills, said marketers have to learn not only how to attract consumer attention using AR and VR, but how to take that one step further and convert brand interest into brand sales. “The commerce angle of AR and VR is still really underdeveloped because we’re still focusing on the top of the funnel,” Jensen said. “How do brands get involved within the awareness side of things? The world is still trying to figure that out. There’s a ton of opportunity. … How does commerce layer into that? And how is that accessible? And how are we ultimately creating a unique and enhanced experience for the consumer leveraging these new technologies?”
For this report, Digiday+ Research surveyed 388 industry professionals, including publishers, agencies, brands and retailers, to uncover how they’re currently using AR and VR — and how they plan to incorporate the technologies in the future.
- The number of marketers using AR has increased over the last five years, while the number of marketers using VR has decreased.
- All survey respondents have continued to use AR mainly for entertainment purposes, with social media and camera filters being the most-used applications and almost half of respondents using AR for gaming.
- Owned-and-operated platforms were the primary host space for AR technology in 2017 but have fallen in favor of third-party platforms.
- Meta-owned platforms top the list of platforms on which all respondents host AR technology. Meta-owned platforms are similarly the main host for VR, but with fewer disruptors in the space.
- Snapchat previously held the first-place spot for third-party platforms, but it has fallen to fifth place overall, with newer entrant TikTok overtaking Snapchat.
- While marketers have decreased overall usage of VR technology, those who have adopted it are using it to create immersive entertainment environments and to drive new customer acquisition.
- Marketers’ increased usage of AR signals that the industry still sees potential in the technology, while VR lags behind in industry adoption, likely due to development costs and a lack of new platforms. Consumer adoption of VR has also been slower than AR, but the number of VR-capable device units continues to increase.
Marketers lean into AR, but pull back from VR
The number of marketers using AR has increased over the last five years, while the number of marketers using VR has decreased. Thirty-eight percent of marketer respondents said they are using AR in 2022, up 15 percentage points from 23% in 2017. The increase in marketer use of AR can likely be at least partially attributed to the fact that AR – which layers digital elements over a real-world view – lends itself readily to marketer applications.
AR technology has also become more widely accessible to many shoppers via their smartphone cameras, which can connect to apps and facilitate AR experiences. Consumer-friendly try-on options, paired with better technology distribution, make AR an increasingly appealing technology for marketers.
But the increase in AR adoption is also interesting when viewed against marketer use of VR five years ago. In 2017, VR had higher adoption rates than AR — 33% of marketers were using or at least experimenting with VR and only 23% were using AR. In 2022, VR has lower adoption rates than AR — 28% of marketer respondents said they are using VR while 38% are using AR.
Marketers may have seen more potential in VR five years ago due to the ability to design VR experiences around a brand, which Digiday noted was the dominant strategy at the time. They did that largely by using 360-degree video, which was accessible for consumers through inexpensive cardboard headsets. For example, General Motors put viewers in the driver’s seat of a Chevy speeding through the New Zealand mountainside, and Patrón gave them a tour of its distillery and agave fields.
However, 360-degree video use has decreased as technology advances allow for more graphically complex virtual environments where users can interact with the experiences and aren’t just along for the ride, so to speak.
Brands have also been less likely to expand their use of VR as they continue to encounter many of the same price and use obstacles that plagued them in 2017. Survey respondents five years ago told Digiday that high VR production costs (cited by 38%) and lack of consumer adoption (cited by 36%) were the biggest barriers to producing VR campaigns. Those concerns hold true today. Video production and app development can cost companies millions of dollars, and VR headsets can run from hundreds to thousands of dollars.
AR’s ease of accessibility means it will likely continue to have an edge over VR in marketer adoption for the immediate future, according to Yang Adija, svp of digital league business operations, growth and innovation at Turner Sports. “AR has a shorter on-ramp, because it doesn’t require the same sort of exclusion with goggles to be inside of a [virtual environment],” he said. “VR has a larger opportunity, because of its immersiveness … but there are probably a few cycles for VR, in terms of how it’s going to evolve before it becomes a massively adopted product.”
Marketers use AR primarily for social media filters and virtual try-ons
Although marketers showed less interest in AR five years ago, since then, their enthusiasm has grown. The pandemic played a part in that, as consumers spent more time online and brands experimented to find innovative ways to engage shoppers and compete for social commerce spending. And, as mentioned earlier, AR technology has evolved and more real-world applications have become available to consumers as AR-capable smartphone cameras proliferate.
Taking stock of those changes and the technology’s maturation, Digiday focused analysis in this report on real-world marketer uses of AR, like social media and gaming, rather than the larger categorical buckets – entertainment, information resource, product demonstrations – assigned in 2017.
Five years ago when examining the general groups, Digiday found that both marketers and publishers were “employing AR for entertainment (39%) and as an information resource (36%) in almost equal parts.” It was anticipated that as the technology matured and made its way into more everyday devices (for example, smart lenses), using AR as an information source would take the lead over entertainment purposes.
But, contrary to expectations, using AR as an information source didn’t take off as strongly as predicted. Companies like Mojo Vision, Apple and Meta are still working on perfecting smart lens technology. Google recently put its AR lenses into the real world for testing again after a long hiatus from non-lab testing.
And so, for the time being, the top reason marketers use AR in 2022 remains entertainment. Social media/camera filters took the No. 1 spot, with 74% of marketer respondents saying they use AR for those reasons, indicating that AR is still used primarily as a marketing tool to create buzz rather than to push consumers to purchase or provide utility.
Companies ranging from candy makers to auction houses are putting social AR applications and filters to use for marketing purposes. Nestlé leveraged AR across Snapchat and Instagram to market more than 40 of its brands. In 2021, the confectioner worked with social AR marketing company Camera IQ to create a filter for Instagram and Facebook where users could break a KitKat Zebra candy bar in half by moving their head.
With nearly identical response rates, virtual try-on (55%) and real-world overlay (54%) came in second and third among marketer uses of AR. In fact, product demonstration via virtual try-on and real-world overlay has seen the greatest increase in AR usage from 2017 to 2022 among survey respondents. Only 24% of respondents used AR for product demonstration when Digiday queried them five years ago, although Digiday noted at the time that “product demo applications do have an opening here.”
The subsequent increase in popularity can in part be attributed to the fact that the pandemic drove a rise in e-commerce sales – and resultant product returns, a trillion-dollar problem for the retail industry. Brands offering virtual try-on and real-world overlay hope to curtail financial losses by giving consumers the opportunity to experience fit and see products in their homes before purchasing.
The tools allow brands to mix camera filters – the top-ranked usage of AR – with product marketing and education. While not necessarily commerce functions themselves, virtual try-on and real-world overlay push consumers closer to purchase.
Jim Merk, brand director for online prescription glasses retailer EyeBuyDirect, said virtual try-ons give shoppers a more accurate product fit than selecting frames based on looks alone, resulting in better shopper-retailer interactions. “If I order a pair of glasses and they seem to fit my face in virtual try-on and I get it home, and it’s too big for me, that’s a bad experience,” Merk said. “You have to think of the customer journey from beginning to end. We want to give [consumers] an accurate experience, and AR offers that. … If you get the quality experience plus the quality product, then you’re using AR and technology in the best way possible.”
While EyeBuyDirect and other companies are using AR to help shoppers understand how products will look on them physically, other brands are using real-world overlay to help consumers experience how items will fit into their homes and lifestyles. For example, IPG Media Lab used real-world overlay in a recent campaign for BMW’s Mini Cooper to give consumers an understanding of the car’s dimensions.
“There’s a lot of confusion over [size],” said Adam Simon, executive director at IPG Media Lab. “[Mini Cooper] wanted people to be able to customize the car and use AR to see it in their driveway or garage, so they could get a better sense of [it]. We had a first-to-market opportunity with an AR experience inside of Google search results. You could search for Mini Cooper, configure it and change features like the color and model, right inside of your Google search results.”
He said real-world overlay gives consumers the opportunity to factor not only aesthetic appeal, but also practical considerations like product proportions, into their decision-making process.
Meta-owned platforms currently dominate the AR landscape
AR platform deployment for marketers has shifted massively since 2017, and mostly in one direction. Meta-owned platforms dethroned Snapchat to top the list of platforms that host AR content among all survey respondents — a distinction Meta also holds among VR host platforms. Owned-and-operated platforms, which were by far the primary AR hosts in 2017, have fallen down the list to third place, giving way to third-party platforms.
Meta’s Instagram is the leading AR host platform (and the leading third-party platform), taking the No. 1 spot with 64% of survey respondents saying they produce AR content for Instagram. Facebook, also owned by Meta, came in second at 44%. Snapchat, which previously held the first-place spot among third-party platforms (and was second overall), fell to fifth overall, with 30% of marketers using the platform in 2022. In Digiday’s 2017 survey, Snapchat was considered to have the most AR potential by 29% of media and marketing professionals, but TikTok overtook Snapchat in 2022, with 36% of marketers saying they produce content for TikTok. Amazon, Google’s YouTube and Google’s ARCore rounded out the list.
Despite Snapchat’s fifth-place ranking this year, some marketers, like jewelry company Brilliant Earth, are still experimenting with the platform. “We’ve been doing a lot of testing in our digital advertising side,” said Lisa Perlmutter, svp of marketing and e-commerce at Brilliant Earth. “Something we’ve been excited about, and where we see opportunity for our customer base, is virtual try-on in Snapchat. Adding that virtual try-on element, that’s native within Snapchat, has been really effective. We have found that our customers are having fun with it.”
Notably, owned-and-operated platforms shrank as the primary host space for AR technology, dropping from the No. 1 slot in 2017, with 76% of respondents using them at the time, to third place in 2022 at 39%. One reason for the drop may be that, as AR technology becomes more widely available and third-party platforms build out their offerings, respondents need to rely less on their own first-party capabilities – as they may have for early experiments. And compared to VR, which depends on potentially cost-prohibitive headsets, AR offers ease of consumer access through ubiquitous smartphone cameras, reachable by scores of apps.
“We do not have mainstream augmented headsets yet,” said IPG Media Lab’s Simon. “We have [Microsoft] HoloLens, which are high-end and enterprise-focused. But we can get a really good AR experience for bite-sized pieces of content on our phones.”
This shift in technology accessibility is also reflected in how respondents said they are building their AR applications. In Digiday’s survey, the majority of respondents said they favor working with a third-party vendor (48%) or a mix of third-party vendors and in-house offerings (31%) to build AR apps. Only 21% of respondents said they favor building AR apps in-house.
Steve Croll, general vp of technology at Huge, a digital agency focused on design and innovation, said one of the obstacles marketers face is finding staff to build in-house apps. “You could have this great idea for an experience, but you need to be able to actually develop the 3D world, whether it’s AR or VR, to be able to create the actual assets,” he said. “That is a tremendous challenge for a lot of companies because that talent pool is right now squirreled away inside gaming primarily … or in the freelance market.”
There are tradeoffs to both approaches: For brands that build in-house AR experiences, the brands own the entire customer experience and the resulting consumer data – so long as they’ve asked for consent, of course. On third-party platforms like Instagram, brands are subject to sharing space, possibly with competitors. But those platforms offer advantages like lower production costs and enhanced audience building to compensate.
Still, marketers who work with items that need to be virtually tried on for fit, like jewelry maker Brilliant Earth, may find it more practical to build in-house apps. “Within our images or photography, it would get too complicated with a third party,” said Brilliant Earth’s Perlmutter. “The sizing, the ratio and shapes and sizes are very complicated to show on a person [virtually]. … On our website, we use a rendering model to populate rings. … We’ve already invested so much in [tools] that are proprietary that we didn’t want to look at a third party. We wanted to make sure we kept it all in-house.”
Marketers attract consumers with VR-based brand interactions
While AR technology lends itself more readily to marketer applications, VR – which includes 360-degree video and allows for an immersive storytelling experience – can be harder for marketers to apply. Both marketers and publishers have decreased their overall use of VR technology in the five years since Digiday last surveyed them. Marketers, with a current VR adoption rate still higher than publishers, dropped usage from 33% in 2017 to just 28% in 2022.
When Digiday queried marketers in 2017, 81% of respondents said their main VR strategy was to design VR experiences around a brand, like the Chevrolet driving experience previously mentioned. “The experiments we’re creating are more narrative-based, in close alignment with the brand,” said Derek Fridman, who at the time was the global executive experience director at Huge and is now design partner at digital agency Work & Co. “But it’s not like you’re landing in the branded environment with the logo everywhere, and you get to play with the products. It’s usually about, ‘Here’s what our brand is about, here’s the narrative that revolves around our brand: Now go experience something tied to that.’”
Five years ago, marketers were much less likely to integrate their brands into existing VR experiences — usually offered by publishers — but as Digiday noted “it’s only a matter of time before branded products become a usual part of the user experience.”
That expectation seems to be coming to fruition. Marketers who have adopted VR in 2022 say they are investing in the technology primarily to create immersive virtual events (72%), with the core goals of creating entertaining experiences (63%) and acquiring new customers (61%). They hope to attract those customers by placing their products in existing VR experiences, or creating their own environments where consumers can interact with a brand directly and organically, much like a pop-up store with an added in-person experience.
In 2022, Head & Shoulders activated its brand in ComplexLand, a virtual fashion and music festival hosted by Complex Networks (owned by BuzzFeed). It created branded headwear for users’ avatars. “When you come into the virtual environment, you choose your headwear, and they were very elaborate styles you normally would be limited by in real life,” said Neil Wright, head of experiential for Complex Networks. “That was a great brand engagement play to show up in a credible way.”
Established virtual events like ComplexLand offer brands a more turnkey partnership in which they can offload the cost and outsource technical skills required to build a VR environment to a third-party partner. The strategy is similar to partnering with a multi-brand retailer in that all brands compete for consumer attention in the same environment, and the retailer has most of the control over how branding is placed within an event. And generally, most brands are better off inserting into existing virtual environments because of the cost savings.
However, with publishers decreasing their overall use of VR, there are fewer environments where brands can organically activate — outside of gaming, that is. Some marketers like Molson Coors Beverage Co. (formerly MillerCoors) are building their own virtual settings to showcase their brands. The strategy is akin to a brand building its own brick-and-mortar store devoted to its products, rather than distributing through a retailer or, in this case, an existing publisher environment. Costs tend to be higher and more technical knowledge is required to employ this approach, but brands face no competition and have full control over the environment. These settings tend to work well for larger marketers who have access to expansive budgets.
“We helped create a VR app [for MillerCoors] that was a collection of minigames set inside a bar,” said IPG Media Lab’s Simon. “It was perfect to add MillerCoors brands, and it was organic because it was a natural setting for that branding.”
IPG Media Lab was able to track how much time each logo was in a player’s field of view. “We’ve seen in gaming in general that users and gamers don’t mind when there’s branding in places where there would be branding in the real world,” he said. “It’s totally normal, and they’re totally fine with that.”
More recently, to coincide with Super Bowl LVI, Miller Lite opened its “Meta Lite Bar,” a brand-hosted bar set in the metaverse. We’ll talk more about the metaverse below.
Entertainment brands find a virtual sweet spot in gaming and fan-focused events
In the case of entertainment marketers, video games and virtual fan experiences are natural settings for showcasing their brands. Video game development company Gamefam has been working with companies like The Walt Disney Co. and Sony Corp. to place brands within virtual gaming or concert environments with the goal of providing a holistic experience that isn’t jarring to users.
In May, Gamefam helped Disney’s Marvel Studios create a Doctor Strange brand experience within its Tower of Misery game to promote the studio’s newly released “Doctor Strange in the Multiverse of Madness” movie. Players met Doctor Strange at the base of the tower where he told them they needed to find misplaced artifacts as they climbed up through the themed environment. Gamefam’s CEO Joe Ferencz said the company was able to appraise brand engagement throughout the game.
“We measure how many players enter the Doctor Strange tower, immediately getting a full dose of the Doctor Strange IP, how many players walk up and engage with the character and receive the dialogue, how far up the tower players go and how many artifacts they find,” he said. “We’re not only registering these deep, immersive impressions of the IP, but we’re able to see how much the content engages the audience and how much value we’re able to deliver both to the audience — because if they’re engaging, they’re having fun — and back to the brand partner who wants the audience to become familiar with and interested in their movie property.”
Gamefam also partnered with Sony to create the 24kGoldn El Dorado Concert Experience, a virtual concert event to promote rapper 24kGoldn’s new songs. Ferencz said one goal was to help brands connect with players through diverse messaging. “We are looking at a variety of different ways from classic American Idol style and signage near the stage, to the opportunity to receive a special avatar item brought to you courtesy of the brand partner,” he said. “In order to receive it, you may have to sit through a five-second message from that brand partner or have the virtual performer call out the brand.”
Virtual gaming environments and concert events offer glimpses of what the future might hold within the metaverse. The metaverse is defined as a “successor state” to the modern internet that will allow users — and marketers — to generate and own content and assets that can be distributed freely across the touchpoints and platforms that will compose a widely accessible and connected digital world. Many of the nodes composing this digital world will be virtual – or at least that’s the current plan.
NASCAR and esports entertainment holding company Subnation are taking exploratory steps into the metaverse. They partnered last year with plans to offer ongoing digital fan experiences that will include activations in both pre-existing metaverse platforms and custom-built virtual spaces. Potential manifestations of NASCAR in the metaverse include an AR space at Daytona International Speedway and virtual watch parties.
Turner Sports’ Adija said he sees the potential for increased fan-brand interaction within virtual environments. “We’ve [experimented with seeing] the percentage of a basketball player hitting a shot, without interrupting the gameplay and the interaction,” he said. “The immersion of it is where we start to see people talk about engaging for a longer period of time and having a community within VR, and really creating a world – the overused metaverse – in which people are spending more time and engaging and even gameplay within that space.” But, he noted that it might take a while until “both the equipment and the experience are ones in which people would want to spend longer periods of time.”
For now, the metaverse is an abstract potential hovering over an emerging set of siloed virtual islands. Current online platforms allow users to move about somewhat freely within the confines of specific services, but limit interoperability between platforms. Even so-called metaverse precursors such as video game Fortnite don’t allow players to recreate their own user-generated content or carry over collected assets to many other platforms.
Five years later, the VR platform landscape remains largely unchanged
As marketers are experimenting with how best to use VR, the platforms that host their VR experiences haven’t shifted much from 2017 to 2022. Owned-and-operated platforms, Meta-owned platforms and Google’s YouTube continue to be the main VR hosts among marketer respondents.
That’s notable when compared to AR, which had greater changes in host platforms from 2017 to 2022, with novel players like TikTok overtaking legacy platforms. Competition and innovation among AR platforms may have contributed to increased marketer use of AR versus VR as well.
While VR hasn’t seen an influx of new host platforms, existing platforms have been investing in the technology. Those investments just haven’t paid off yet. Google and Steam both have their own in-house labs devoted to developing VR and AR experiences and tools. Meta is also betting big – including with the name change – by essentially subsidizing technologies to encourage their adoption. Meta’s first-quarter 2022 earnings report showed that the company spent $3.7 billion on its VR and AR division, Reality Labs – though it took in only $700 million in revenue.
It’s not surprising then that Meta-owned platforms overtook owned-and-operated platforms to establish a VR hegemony. Quest (formerly Oculus) took the first-place spot, with 48% of marketer respondents saying they use the platform to reach VR consumers, and Facebook retained its second-place spot with 46%. Unlike AR, which has more viable platforms, VR’s clear main player is Meta, with fewer disruptors in the space.
Despite investments in VR tools by companies like Meta, VR apps and services still struggle to reach consumers. “When you look at [Facebook’s] engagement on owned-and-operated apps like Horizon Worlds, they only have about 300,000 people on a regular basis,” said IPG Media Lab’s Simon. “Facebook is buying up a lot of companies to try to jumpstart [the gaming market]. But the thing that will start to expand that is when we see companies like Apple moving into the space and bringing a pathway to bring some of the smartphone apps into the headset space.”
Owned-and-operated platforms fell to third place at 42% and also had the greatest overall decrease, down from 71% percent in 2017. YouTube retained a healthy rate of usage at fourth place, with 34% of respondents saying they use the platform for VR in 2022 versus 40% in 2017. YouTube primarily offers marketers a host environment for 360-degree videos. Similarly, Facebook provides 360-degree videos, but it also offers aforementioned features like gaming.
Lack of business relevance keeps marketers from investing further in AR and VR
Although the U.S. market size for AR and VR is expected to increase by a compound annual growth rate of 41.6% from 2021 to 2030, according to Allied Market Research, many marketers thus far have been slow to implement the technologies. VR faces challenges to widespread adoption as marketers struggle to find effective ways to use the technology for brand engagement and sales, preferring to create entertaining events instead. AR fares somewhat better with widespread consumer access to the technology on smartphones and marketer-friendly uses like virtual try-ons and real-world overlay.
Marketer respondents who are not currently using AR and VR found lack of business relevance to be the biggest reason not to invest both in AR (47%) and VR (46%). When considering AR, real-world overlay works well to showcase products like artwork and furniture that can be effectively placed into consumers’ living spaces. However, products like skincare that provide long-term benefits not readily visible to the naked eye are harder to showcase via AR – not to mention Food and Drug Administration restrictions on claims those filters might implicitly make. Additionally, multi-brand retailers might not have the time or bandwidth to load numerous products into an AR tool.
In terms of VR, much of the technology is currently used to create entertainment experiences. While gaming and virtual events create opportunities for consumers to organically engage with brands, they do not always drive sales. Because marketers ultimately want to sell products, an inability to do that may lessen their drive to invest in new VR technology.
General Mills’ Jensen said that a major hurdle companies need to overcome when it comes to both AR and VR is how to move beyond entertainment and realize their potential as e-commerce vehicles. “No one chooses to scroll through their favorite retailer’s e-commerce site for fun,” he said. “For AR and VR, we have the opportunity to ask how we integrate commerce or integrate brand engagement into platforms where people hang out. How do we provide enough value to intersect that consumer and allow them to stop and move through with a purchase, so it’s not just a brand awareness campaign?”
EyeBuyDirect’s Merk said consumers’ tendencies to switch between devices during shopping experiences adds another layer of complexity. “We like to think technology is smoothed down and fixed, but it’s frustrating,” he said. “The simplest things can still be complicated and things don’t work the way you expect them to.”
“It’s constantly trying to stay ahead of the technology and offer it on different platforms,” Merk added. “What works well on a desktop may not work so well on your iPhone or iPad, or vice versa. We focus very hard on making sure that virtual try-on works extremely well on mobile and when [consumers] transfer back [to a computer]. People still like to complete their orders on the desktop, so making sure that [we’re] smooth backwards and forwards on all platforms.”
While many marketers not currently using the technologies struggle to find a business case for AR and VR, 34% of marketers not currently using AR said they plan to invest in it in the future, and 37% not currently using VR have plans to invest down the line.
Native AR and VR audiences skew younger, but will mature with time
Another hurdle marketers are facing is consumer indifference toward AR and VR technologies. Marketer respondents cited lack of customer interest or adoption as the No. 2 reason after relevance for not investing in either technology — 25% for AR and 23% for VR.
Both AR and VR are strongly associated with gaming, which, as Gamefam’s Ferencz pointed out, is often dominated by younger generations. He noted, for example, that Roblox’s main demographic is children through young adults who are about 6 to 19 years old.
“This is analogous to what we’re seeing with Facebook, where people who were 20 years old 15 years ago were on Facebook,” he said. “People who are 20 years old now are looking for other platforms that they feel are more in line with the way they use social media and the way they use the internet. [Engaging older audiences] is going to have to come through gaming, changing individual applications and massive entertainment experiences. … That is what opens up the tent.”
FGX International’s Gerantabee said that although traditionally AR has been used by those under 35, his company has seen an increase in virtual try-ons among all consumers as the technology becomes more available. “Historically AR has been for a select few,” he said. “It’s always been the 18-to-34 [demographic]. But in a category like ours that sells across all age groups, we’re glad to see that it has become more available. … In certain parts of our category like reading glasses, which tend to skew older, we’re still seeing uptake in that technology.”
But Gerantabee said the key to more widespread consumer adoption is providing users with an easy learning curve. “The one thing that always is at the center of any technology – AR, VR or any digital platform — is it has to be intuitive,” he said. “If you have to teach somebody a little bit too much how to use it, you’ve already lost. So, you have to be very thoughtful about design, simplicity, availability, and connection capabilities and speed. … The big takeaway is that now that the issue of scale is starting to dissipate, there’s a lot of playing field out there for all categories to really participate.”
Ease of use will determine the future of AR and VR
As the technology behind VR grows, and companies like Meta continue to spend to create more accessible options for users and marketers, adoption may increase. Still, VR will likely need to achieve the same ease of access that AR has attained, particularly through the release of new, less obtrusive hardware, before there can be widespread marketer adoption.
And AR will have to move beyond app interfaces and merge with real life in new ways to meet consumers where they are. “We’re trying to figure out how to add value, whether it’s entertainment or education, and how to drive accessibility for our consumers — what is easy for them regardless of technology and time,” said General Mills’ Jensen.
But the draw of potential revenue can move mountains, and with the U.S. market for AR and VR projected to reach $134.76 billion by 2030, according to Allied Market Research, marketers may find themselves drawn to both technologies in the not-too-distant future.