Augmented Reality & Location Based Mobile Marketing

Problem Definition

Augmented Reality and Location Based Marketing is the combination of two extremely interactive and engaging solutions, AR and LBS.

The use of Augmented Reality (AR) applications or Location Based Service (LBS) is not new to the mobile industry. Both services were introduced way back in late 90’s beginning of 20’s when the mobile internet was rising and mobile data consumption was becoming more affordable by the user. Since then the world of mobile has experienced numerous augmented reality applications that promise to take retail to the next level but they never really took off.

The way mobile phone users vigorously engage with locations is changing the corporate marketing and advertising. LBS has proven to be more reliable and heavily used and since its introduction we come across it on a daily basis with store locators, reviews, product lookups and more, proving to be an important aspect of the mobile marketing mix. A recent study showed that 55% of smartphone owners use their devices for “a location-specific task.” More than that, LBS are perceived to rise up over $10 million within the next 3 years.

The real opportunity arises when you combine the two services and create a new momentum and seamless experience that can be incorporated in various mobile marketing activities and campaigns, named Augmented Reality & Location Based Marketing. The new arena now incorporates graphic location content related to the position and orientation of the user being overlaid in real-time onto camera phones. This video see-through interface allows the user to discover what’s nearby by simply pointing the phone at any scene, while moving around and looking through the camera lens while interacting in real time with elements of the “virtual world”. It has been forecasted that by 2015 more than 1.5 billion LBS Augmented Reality enabled applications will be downloaded.

AR and Location Based Marketing on mobile phones also create a significant new opportunity for both advertisers and brands through Ad displaying and hosting respectively. Not only are smartphones always with the user, always on, and always connected, they also provide location and interfere with the real world the moment you request them to. Being able to engage their audience utilizing their knowledge of what they are doing and the location they are doing it is a powerful innovation. Brands can redirect their consumers towards a targeted special offer, advertisement, or a virtual store with their products or an offer to sign up for further information.

Augmented Reality & Location Based Marketing in Action

There has been a constant increase of local business and large companies taking advantage of the possibilities and capabilities AR& LBS marketing enabled campaigns incorporating it on their mobile strategy in terms of location based marketing. On the other hand there are a significant number of companies that utilize and provide those two technologies in the form of mobile applications for smartphones allowing brands to create virtual scavenger hunts.

One of the most known apps who gained publicity with their latest campaign with various retailers lately is GoldRun. When consumers download the free GoldRun app and sign up to follow a campaign or “run,” they can collect virtual goods from physical locations using their phone’s camera.

During the H&M campaign, for instance, Users get to interact with and capture pictures of virtual H&M apparel and accessories from the brand’s fall/winter collection in front of any of the 10 retail stores in Manhattan. Through AR, users simply pick the items they want to view and collect & download them in their phones to receive an instant 10% discount on any H&M purchase.

Another great example and innovative campaign that uses GoldRun’s platform is AirWalk. AirWalk used the platform to build virtual pop-up stores in locations in Washington Square Park and Venice Beach at which users could purchase a special edition shoe. AirWick has created an additional channel of revenue by implementing Augmented Reality & LBS by setting up virtual stores anywhere they wish ultimately incentivizing their sales.

Given how eager brands and retailers have been to adopt location-based marketing through check-in apps, it’s not a surprise that many are eager to run campaigns on applications such as GoldRun. On the other hand and given the potential revenue for a brand and a retailer and the opportunity to set up stores where users could purchase products does not come without limitations.

As with the Location Based Services, the number one concern of users who is privacy and safety. In a study where over 1000 US consumers were surveyed, and are on social networks and are familiar with location-based marketing activities, 48% cited privacy concerns as their number one reason for not doing so.

Augmented reality and LBS could be used for delivering coupons and storing them to mobile devices, full product (vehicle) catalogues, store (dealer) locators and video advertising. The message can be customized based on the location the device is, creating a seamless user experience that opens the door to a paper-less future.

Additionally, since AR technology is implemented through mobile applications, mobile media distribution will be a big trend and influence in the way we make purchases, changing dramatically our shopping experience. Mobile sites will be able to load through the AR app, redirecting the users to a dealer store based on the device location.

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