Publish your content on The Drum

As cookies crumble, AR-based advertising has new opportunities baked in

Following the acquisition of Verizon Media — now known as Yahoo — by Apollo Funds, the company’s chief business officer Iván Markman suggests that investing more deeply in AR experiences can help brands secure a competitive advantage.

Advertisers and publishers are coming to terms with the end of third-party cookies. Cookies are already restricted in Safari and Firefox, which represent around 40% of market share, and Google’s phase-out in Chrome will arrive before we know it. While these changes certainly benefit tech giants, we can all agree that having control over one’s data ultimately increases consumer trust for all digital engagement, including advertising. And that’s good for everyone.

But advertisers can feel good about dialing back their reliance on third-party cookies for another reason — there are a growing number of channels and formats that can deliver standout, personalized and engaging experiences without depending on cookies. Augmented reality is a great means by which to do so.

The AR market is growing rapidly, spurred in part by the Covid pandemic, where consumers began conducting more of their “real lives” online, en masse. The market is continuing to grow because consumers like what they’re getting from these experiences. According to data from Allied Market Research, there are 1.5 billion frequent users of AR today, and that number is forecasted to reach 4.3 billion by 2025. AR has truly entered the mainstream.

We’re already seeing brands take advantage. Consider the scale and speed of adoption — Snapchat research suggests that over 100 million consumers today use AR to shop, whether online or in brick-and-mortar stores. That appetite for AR is only growing. Nearly three in four of those consumers say they would pay more if they could make an AR-enabled, transparency-assuring purchase decision. And, according to a Google survey conducted in conjunction with Ipsos, around 60% of smartphone-using consumers now expect AR shopping experiences. One recent survey even found that 70% of consumers want to see more AR ads — significant, since consumers rarely invite more ads into their lives.

For brands, AR represents a valuable opportunity. It allows personalization and immersive experience to come together in a way that consumers value and want to engage with. Start imagining experiences for your brand now: shoppable video; 3D product visualizations; the option to “try on” an article of clothing; personalized “digital mall” experiences; or even a full view of a restaurant’s dishes from the street outside the restaurant. The convenience is also striking — there’s the opportunity for service from a virtual assistant, or the ability to browse local stores’ deals and save them to a shopping list straight from an email inbox.

Moreover, AR enables personalization without relying on probabilistic tracking tools that will soon be off the table for advertising. The format has evolved to allow for more first-party data targeting, which is a game-changer as cookies deprecate. AR can make use of first-party data from a brand or trusted partner — always more reliable and controlled than third-party data — to truly personalize the message and to launch consumers into new, more dynamic, more engaging experiences.

Compared to what the industry previously imagined for advertising creative, it’s a revolutionary development, and it earns impressive ROI. Pottery Barn, for example, says shoppers spend an average of 2.4 minutes engaging with an AR ad unit. We’re seeing so many new use cases from innovative brands, demonstrating how they’ve used AR successfully at all points along the funnel, driving brand awareness, ad engagement and re-engagement as well as conversions. Indeed, AR empowers the consumer to move through the entire buyer’s journey on their own time, progressing all the way through more quickly than ever.

These experiences will only become more valuable to the consumer as they become more portable, through advancements in hardware, software and mobile connectivity. 5G is a great example, because it ensures faster speeds and a smoother, buffer-free user experience. Thanks to 5G, consumers will be able to experience AR advertising as the brand intended and in real time.

Brands need to think about how they can leverage AR for their goals now. Think about possible campaigns as well as distribution — where your brand will want to advertise with AR. AR has become more programmatic, allowing for greater omnichannel, targeted delivery — on mobile, at home, in the store and through digital out-of-home. The experience needs to fit the channel and suit the consumer’s mindset and behavior in that moment and place, but the possibilities are exciting.

As the digital landscape evolves and privacy remains center stage, AR is the format around which advertisers can build. It blends privacy-minded personalization with powerful creative, helping brands cut through the noise and deliver great value to their consumers.

Iván Markman is chief business officer at Yahoo.

By continuing to use The Drum, I accept the use of cookies as per The Drum's privacy policy