Augmented reality, or AR, may finally be coming of age. Particularly for Millennials, defined as those born in the 1980s and whose lives revolve around being constantly connected to technology (Blackberries, iPhones, Facebook, Twitter, video games, and more), AR offers a serious opportunity for marketers to reach these important consumers. With augmented reality, marketers can take the physical world and combine it with the digital world, giving both users and brands the ability to connect even further with a product before, during and after making a purchase. 

"In its simplest form," says Vivian Rosenthal, founder of New York City-based AR start-up GoldRun, "Augmented Reality is a digital layer over the real world that you can't see with the naked eye but you can see with the camera on your smartphone or computer."

But why and how should your company use augmented reality? Aside from the simple benefit of reaching Millennials, we'll delve into a few well-done campaigns in this guide to explain further.

How to Use Augmented Reality in Advertising:  The Prevalence of Augmented Reality

Augmented Reality is nothing new. It's been around officially since 1990, when Boeing researcher Tom Caudell coined the term to describe a digital display used by aircraft electricians that blended virtual graphics onto a physical reality. In other words, augmented reality combines two very different dynamics: the perception of personal exclusivity and a multi-dimensional, sensory experience.

We're all familiar with AR, even if we don't realize it.  One of the most common AR uses is the yellow first down line we've all grown accustomed to on football broadcasts. Contrary to what some may think, those yellow lines are not actually painted on the field, but inserted in your television viewing experience.

In March, the German film The Witness let users become a part of the film for the first time via AR and determine the outcome of the movie based on their own actions on their smartphones. And it will only continue to grow in advertising. According to 2009 figures from ABI Research, the market for augmented reality (AR) in the US alone is expected to hit $350 million in 2014, up from about $6 million in 2008, or, around 50 times more from 2008 to 2014.

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How to Use Augmented Reality in Advertising: Using AR for a Competitive Advantage

For the marketing folks associated with Visit St. Petersburg/Clearwater, they've been thinking innovatively in terms of technology all year. They're faced with an understandable problem: so many destinations in Florida can offer beaches and entertainment, but how do you appeal to that younger demographic in a creative manner?

The Florida-based organization targeted New York City residents in the doldrums of winter with quick response, or QR, codes in partnership with JetBlue Airways on city subways. In the campaign, users snapped photos of the QR code and entered a co-branded contest to win a trip to the beaches. In March, they launched the first true augmented reality campaign in their industry, allowing users to picture themselves in the many local attractions (from beaches to the brand new Dali museum and more), accessible on their computers and shareable on social networks.

"For whatever reason, the travel industry has been a bit slow to adapt to a lot of these technologies," says Nate Huff, the vice president of publishing at Miles Media, who worked on the VSPC campaign in conjunction with Digital Frontiers Media. "With travel-based marketing, it's so driven by ROI, particularly because many of those organizations are run by the government. But this was a risk-taking group, and they realized that implanting an AR campaign is really going to get far more buzz than it's probably going to get in terms of actual consumer usage, but it's something that sets the brand apart and shows innovative thinking."

But augmented reality doesn't exist just in the online and television/film world. As smartphones continue to proliferate our daily lives (passing PCs in overall sales in February), offering these experiences in a mobile setting becomes increasingly important. And in the future, it will likely be the main way to reach consumers via augmented reality.

Enter GoldRun. Founder Vivian Rosenthal received a master's from Columbia University's Graduate School of Architecture and her joint thesis, way back in 2001, dealt with the intersection of the digital and physical space, before she founded digital media studio Tronic. She saw the language of the future as very visual, and thus created an opportunity for brands to offer AR experiences on their mobile phone via the GoldRun application about 18 months ago. To this point, their best campaigns have been with Airwalk (see slideshow) and an Esquire Magazine cover with Brooklyn Decker that allowed users to take their virtual photo with the supermodel upon checking in to certain Barnes and Noble locations.

"When it comes to measuring the success," says Rosenthal, "it's often about visibility, where it was shown, who shared them, and more. For the Airwalk project, it was about generating revenue by selling product? And they sold out 600 pairs of limited edition shoes in a weekend and had the most traffic in terms of their e-commerce site in the history of the company."

But why use AR, and how can your brand pull it off?

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How to Use Augmented Reality in Advertising: Why Use Augmented Reality?

It's important to think about augmented reality as an additional form of advertising (in other words, it shouldn't be your only strategy). But based on its newness, if you're able to pull it off correctly, your company is seen as innovative.

Beyond that, the expense of pulling off an AR campaign pales in comparison to traditional print or broadcast advertising and establishes a longer-lasting, deeper connection with your consumers via an emotional connection, which in the end turns to more repeat business and sales. Here are the real reasons to think hard about utilizing an AR campaign.

Innovation: It's always good to be first to market, particularly when it comes to technology. In social networking, is no longer around, but their work inspired sites like Facebook, Twitter and more and their employees have moved on to impressive roles elsewhere. "This (AR offering) isn't just a one-off ad campaign," notes Huff. "This is an innovative approach by a destination marketing group (VSPC), the first of its kind, to use augmented reality to change their perception. Whenever the (travel) industry catches on, nobody else will have been first, and VSPC will be looked at as innovators."

What added value does AR offer for businesses? "It's really quite simple," says Rosenthal. "You are connecting further with customers and you're seeing your content as a brand in the real world with unbelievable visibility and scale."

Inexpensive: Print advertising in magazines tends to be significantly more expensive than online or digital ads. Many large monthly magazines charge upwards of $100,000 for a four-color, full-page print ad (one time), a cost determined by CPM (or cost per thousand readers). For example, Sports Illustrated's 2011 Swimsuit Issue (albeit a once-a-year publication) charged a base rate of $405,300 for a one-page, four-color full-page ad.

When creating an AR campaign, you often have more brand interactivity than the one-page ad at a significantly lower cost. "It honestly depends on the scope of the project, but AR campaigns can be as inexpensive as $5,000 and ax high as $100,000," according to Rosenthal. "That's nothing compared to print, and in many ways it's worth the risk in my eyes."

Emotional Connection: AR takes marketing strategies to a more immediate and sensory level with customers, allowing greater interactivity in the selling and buying process.  AR can create an emotional connection between what the buyer is searching for and what the product can offer. In short, it gives the product a personal feel when consumers can picture it in their own world.

"It's not just a matter of taking photos and sharing, which is what we're building," says Rosenthal. "But what really matters to us is the ability to take photos with virtual characters, products and environments, which is where it will resonate most and develop that deep brand connection."

Repeat Engagement: For most brands, engaging customers must come before, during and after you've created a dialogue with them, and with AR, brands engage with consumers, both cognitively and through their senses. For Millennials, it is rather simple: if the messaging and the experience are not engaging, and do not create brand desire, then customers may just move on to a competitor. Companies simply cannot afford that when you consider the Customer Lifetime Value (CLV) of Millennials, who have upwards of 60 years in their buying future.

"From a very simple perspective," says Huff, "and this is a buzz word, but it's all about engagement and allowing companies to think up new ways to connect people with products. When they have a good experience, they're more likely to come back."

Geo-Targeting: With AR, not only can you determine what people's buying patterns are like via pre-existing data, but you can utilize GPS data (from smartphones, namely) to immerse users in a brand experience no matter where they are in the world. For a brand like Stella Artois, their augmented reality iPhone app Le Bar instantly locks onto your location and lets you find a local bar serving the popular Belgian beer by populating your smartphone with directional arrows pointing you to the nearest Stella taps.

Hyper-local advertising will continue to be an important strategy for marketers, as spending money to reach the right customers (or what your brand perceives as the right customer) is debatably worth more than overspending on a large-scale, national campaign that may or may not hit your intended demographic.

Mobile: With applications like GoldRun, advertising via augmented reality on mobile could very well be the future. Even Huff admits that the VSPC campaign, while innovative for the travel/destination-marketing sector, is only a step in the right direction toward mobile adoption, where he also sees the future of AR campaigns.

"If I'm a brand or ad agency, it behooves me to be marketing to the consumer in the mobile space," says Rosenthal. "Otherwise, I've lost an opportunity to connect from a brand perspective and sell a product or service. What we're noticing is that companies are literally lining up to work with us and use the technology because from a business perspective, it's a really exciting, new and fun medium to play with, and mobile is how you reach customers today."

Driving Offline Sales: At the end of the day, it comes down to ROI on any campaign. The key to developing successful AR campaigns that provide customer engagement as well as translate to sales will be ensuring that they support the local communities they're used in while creating unforgettable experiences for the customers using them. In many ways, AR brings offline experiences to online sales by enhancing the experience and driving brand visibility.

"It's going to be exciting. I see AR as where we were 10 years ago or 15 years ago with the web," says Rosenthal. "Brands at first didn't understand that they needed a presence online and a website. That's now their e-commerce platform, which is as important as almost any brick and mortar. And that's where we're going with AR. It's becoming a virtual goods economy out there, and GoldRun is positioned well in that market."

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