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The State of Extended Reality in Advertising

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It’s difficult to ignore the rising presence of XR (Extended Reality) in advertising right now. As headsets for VR, and applications for AR have grown more pervasive, countless companies have begun investing in more immersive marketing experiences for their audience.

Currently, the global extended reality market size is accelerating at a rate of around 24.5%. According to one report, 84.2% of respondents said sales, marketing, and external communications represent some of the most valuable areas of XR implementation.

XR has provided companies with a better way of connecting emotionally with their audience in a post-pandemic landscape, where face-to-face interactions are less common. At the same time, the technology is also paving the way for a different kind of marketing economy, in the new universe promised by the “Metaverse”.

Let’s explore how XR is influencing the advertising sphere.

The Potential of XR in Advertising

For decades, marketing teams have experimented with countless tools and experiences to help connect brands with customers, and encourage consumer loyalty. We’ve seen endless different trends emerge over the years, from guerrilla marketing and experiential events to the rise of influencer advertising.

XR in advertising represents an entirely new dimension of brand/consumer interaction. With this technology, companies can essentially take their products to customers wherever they are, allowing them to experience what a piece of furniture might look like in their house, or how well they’d suit a certain shade of lipstick.

At the same time, XR also allows companies to create new environments for their customers to explore, in the form of virtual reality experiences which enhance the impact of a campaign. For instance, Diego gave customers a way to explore their distillery in VR when sampling whiskey, and found 85% of people experienced a more “enhanced” interaction as a result.

Just some of the potential use cases for XR in advertising could include:

  • Enhancing real-world advertising: XR provides companies with a more immersive way to reach their customers in-person. Companies can create mixed-reality pop-up experiences where customers can interact with the organization like never before. Rekorderlig accomplished this when making the world’s first MR bar. Alternatively, companies can bring QR codes and AR apps into stores to give customers more information as they browse.
  • Try before you buy: The “try before you buy” XR experience is one of the most common in the advertising landscape. Countless companies, from furniture brands like IKEA, to cosmetics groups have allowed customers to use AR apps to test what a product might look like in their home, or on their body, before making a purchase.
  • Immersive outreach: Advertising companies using extended reality can reach out to journalists and PR companies, or even influencers, with more immersive experiences. This allows for a better level of collaboration between advertising teams and other groups, which could lead to enhanced promotion opportunities for brands.
  • Interactivity in Ads: XR allows companies to “immerse” their customers in the advertising experience from an entirely different perspective. For instance, Topshop used VR to allow customers to step into a virtual world and check out their latest collection as though they were sitting beside celebrities next to the runway.

Trends Driving XR in Advertising

For the advertising industry, XR represents an exceptional opportunity to reconnect with clients who are bored of old-fashioned marketing efforts. Today’s consumers are numb to dime-a-dozen banner ads and cold calls, but they’re always keen to engage in an experience that feels new or novel.

Extended Reality allows companies to build more of a focus on great customer experience into their advertising strategy, which can lead to better engagement and sales. Some of the major trends we’re starting to see in the XR landscape for advertising include:

  • The merge of AI, and XR: AI and XR often have a strong connection in any industry, but the two solutions are working together more closely than ever in the marketing landscape. Artificial Intelligence allows advertising professionals to deliver more personalized experiences to customers. For instance, with AI, a company can build an AR app which recognises a person’s face and allows them to apply makeup to see what it might look like before making a purchase.
  • The Metaverse: The Metaverse represents an incredible opportunity for XR in advertising. As we move ahead to the age of the “embodied” internet, we’ll see a lot more people engaging in digital experiences through XR technology. This will mean companies will be investing more frequently in programmatic advertising experiences which can allow them to interact with customers in their favorite apps or Metaverse communities.
  • Hybrid experiences: The concept of the Metaverse has also given rise to an increased adoption of “hybrid” experiences. For instance, we’re increasingly seeing companies throughout the world advertise new products and experiences within their store through AR apps and exclusive XR experiences. The XR world also allows for more immersive “hybrid events”, allowing people to attend conferences both in-person, or in a virtual environment.
  • Improved connectivity: The rise of better connectivity delivered through solutions like 5G will make it easier for companies to create more immersive mixed reality and XR experiences within a real-world environment. These connections could help to create a new generation of stores and shopping experiences, where people can see holograms of the products they want and purchase them in real-time to be delivered straight to their door.

Exploring the Future of XR in Advertising

As we accelerate towards an increasingly digitized future, where more people are spending increasing amounts of time in the virtual and augmented landscapes available to them, XR in advertising will only grow more popular. Already, we’re seeing an increase in the number of tools available to help advertisers take advantage of XR in their industries.

Simple low-code solutions like ARKit allow anyone to create their own AR application for advertising purposes, and any company can create their own AR filter for apps like Snapchat. At the same time, companies like Admix are launching programmatic advertising solutions specifically for the XR world.

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