Why Brands Like L’Oréal and Acura Are Betting Big on Augmented Reality

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Two weeks ago, Acura set up a racetrack in El Toro, Calif., around a former Marine base and asked four influencers to drive a car as quickly and safely as possible down the course. The catch? All of the drivers were wearing augmented reality-equipped helmets that overlaid HD graphics on top of the real world to make it look like they were driving through a jungle and snowstorm, making it difficult to stay on course. Meanwhile, footage from the race was livestreamed across Facebook, Twitter and YouTube.

An impressive 500,000 people tuned in to watch the elaborate hourlong broadcast on Facebook and Twitter, reaching a total of 3.58 million people after the stream ended. All told, more than 115,000 minutes of content have been watched on Facebook alone and the livestream collected nearly 44,000 reactions. The campaign was Acura’s first significant work with augmented reality and underscores how far the technology has come in the past year in moving from gimmicky branded apps to informing broader social and digital campaigns.

“We have dabbled in marketing technology in the past six months, which is an area we [find] interesting and a space where we can explain our high-tech features—this is the first time that we have used augmented reality,” said Jessica Fini, social media manager of American Honda. “Augmented reality is a couple of years old but nobody had put in the experience where you’re driving a car or doing something that’s paired with the virtual world.”

While marketers have experimented with augmented reality for a few years (practical uses of the technology actually date back to the 1990s) AR has recently gained more steam as companies like Apple, Snapchat and Facebook build their own slick versions that work particularly well on mobile. Savvy brands like L’Oréal and Estée Lauder are even incorporating AR into stores and ecommerce sites.

Apple’s bite
Later this year, Apple will roll out the new iPhone with its ARkit platform that allows developers and brands like Ikea and Nike to create branded AR apps. Ikea has an innovation team of 150 people who work on new platforms including AR and the brand plans to launch an app this fall that lets consumers virtually place furniture around their homes to see what it looks like before they buy, said a spokeswoman.

“A lot of the recent activity has been fueled by advancements in things like facial recognition and computer vision in general and that technology becoming more precise,” explained Jeff Danley, channel director of mobility at VML. “These are real-world tools that will be commonplace—similar to having a flashlight on your phone.”

After seeing an uptick in brands asking for AR work, Danley is currently pulling together a team of seven staffers that will focus on augmented reality out of the agency’s Kansas City headquarters.

But as more tech companies like Microsoft and Sony work on their own versions of AR, expect for the space to get more complicated and fragmented. Just like how brands had to pick between building apps for either iPhones or Android devices a few years ago, marketers will soon have to develop specific AR strategies for individual platforms.

“We still struggle with scale on applications,” Danley said. “The challenges with the different platforms and fragmentations are similar to brands coming up with a mobile strategy in 2009, 2010.”

Snap reality
Then there’s the social platforms, namely Snapchat, which has pioneered face-swapping lenses and most recently “world lenses” that puts characters into the real world like the dancing hot dog that’s become an internet obsession in recent weeks.

Snapchat works closely with marketers to design lenses with best practices that mimic some of the app’s most popular features—think vomiting rainbows and zombies—that can cost hundreds of thousands of dollars for one-day takeovers. Ultimately, the final version of a sponsored lens is vetted and approved by Snap.

“They’ve got a big library of ways to do lenses right and wrong and they’re starting to get better insights by vertical,” commented Mike Dossett, associate director of digital strategy at RPA. “They are using the insights from a lot of their previously run brand lenses to help us determine what our creative approach should be.”

That said, Dossett noted that photorealism is still a bit of a challenge for advertisers, particularly marketers like automakers that love to put stylized, perfect pictures of cars in ad campaigns.

“There’s limited value in doing things that don’t allow us to show off the things that people love us for,” Dossett said. “For Snapchat, a platform that doesn’t allow us to do that in a paid capacity is a big roadblock.”

Augmented bots
Facebook and Instagram are investing in similar types of augmented reality, with Facebook recently opening a set of tools called AR Studio that agencies like VML are participating in. However, VML’s Danley stressed that Facebook is not opening the AR floodgates to brands—yet.

“A lot of that technology is similar to Snapchat filters,” he said. “Facebook has not been interested in having brands integrated into that AR environment and their work has been more similar to Snapchat.”

Brands are using Facebook in other ways to tie into AR, too. After testing an augmented reality tool on the product pages of its website and mobile site that lets consumers test makeup shades, Estée Lauder is now using a Facebook Messenger bot called Lip Artist that recommends a lipstick shade by asking consumers to upload a photo of themselves. From there, AR applies the shade of lipstick to a photo. The beauty brand is also looking at foundation as a way to let users experiment with augmented reality and finding the right product for their skin tone.

According to Jon Roman, vp of Estée Lauder Companies online, the average consumer tries on 10-15 shades per visit to the site. He declined to say how much revenue AR has brought in, but said, “We’re seeing that consumers who are doing it and trying the lipsticks on are much more engaged, much more likely to convert and we’re seeing a direct link to sales.”

As opposed to using a type of AR that forces consumers to download a mobile app, Estée Lauder is working with a company called ModiFace that powers web-based AR.

“It’s exciting that there is no barrier to the consumer—she doesn’t need to download an app, she doesn’t need to worry if her phone is ready. She can just go to the website wherever she is,” Roman said. “That omnichannel experience and the ability to service the customer in a really high-touch way wherever is one of the driving reasons to try it.”

Going offline
For L’Oréal, AR is also a trove of data. The beauty giant has several branded AR apps like Makeup Genius and Style My Hair that let users apply makeup and hair looks to their selfies before trying a product.

“It’s an immense source of data in terms of understanding what consumers like, what they like less in terms of colors, looks, textures,” said Lubomira Rochet, L’Oréal’s chief digital officer. “For our marketing and our labs, it’s a great source of insight in terms of trends and it helps us deliver makeup collections.”

The brand recently inked a deal with AR beauty app YouCam that Rochet referred to as “the Facebook of beauty” that will integrate the brand’s products into YouCam’s ecommerce and livestreaming features.

L’Oréal is also experimenting with installing augmented reality at beauty counters in retail stores in Japan and Paris and is running attribution models that analyze if someone bought a product after playing with the app.

“It has impacted our sales significantly,” said Rochet. “It’s more of an offline play than an online play—we don’t see million of people buying from the app but we see it having an impact in what people buy offline.”

Expect those kinds of offline-online use cases to grow as more retailers look to make physical spaces more digital, said VML’s Danley.

“I think probably in the next 12 to 18 months you’ll see more advancements in hardware beyond the phone,” he said. “You’ll really start to see branded retail experiences—physical spaces that become augmented with digital signage or experiences. You could walk into your local coffee shop and have this digital interaction with virtual characters or people whether it’s in your glasses or on your mobile device.”

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