Augmented Reality and Marketing: Definition and Business Benefits

November 28, 2022

Business success is for the bold — the entrepreneurs who are unafraid to explore new ways of growing their bottom lines. They must catch the attention of technology-enabled and visually-oriented audiences with short attention spans. 

One of the newest innovations that tick these boxes is the use of augmented reality in marketing. Through it, audiences can view digital versions of the real world that are enhanced by digital content.

Probably the most successful and popular application of augmented reality is Pokémon Go, a mobile game that encourages users to capture its characters by exploring the real world with their smartphone cameras. The innovative and engaging app has been pegged as one of the most successful phone-based games in history, earning nearly $2 billion in revenue just two years after its release.

As an industry, the augmented reality market was worth $28 billion in 2021 and is expected to grow to over $250 billion by 2028. Indeed, major performance metrics indicate that augmented reality in marketing is not only here to stay but is projected to flourish exponentially as more businesses and the public continue to embrace it.

What is augmented reality? What are its applications in marketing? How can it benefit your business? This article explains it all and will ensure that you don’t get left behind.

Augmented Reality and Virtual Reality: Their Definitions and Relationship With Each Other

Virtual reality (VR) is an immersive experience where sights and sounds of the real world are cut off and replaced by a computer-generated, virtual environment that is experienced through a VR device.

It offers a 360-degree view of a digital environment. VR allows users to immerse themselves in a virtual universe where they can navigate digital spaces, interact with objects, and view their surroundings as though they are in it.

Augmented reality (AR) is a blend of virtual and physical reality which means that it integrates digital information with the real world. While virtual reality fully transports a user to a digital world, augmented reality blends virtual reality elements with the physical world.

It utilizes technology to augment or overlay different texts, sounds, or graphics over the real world which users can experience through their devices. AR doesn’t transport users to another realm entirely; it merely alters what their surroundings look or feel like through their AR-enabled devices. 

Even if you don’t have any AR apps for your company, you’re probably using the technology already. Filters on Instagram, Facebook, Snapchat, TikTok, and other social media platforms use AR to generate images that layer digitally produced visual elements on top of real-world images.

Though most people think of games when they hear VR and AR, these technologies can have a massive impact on the marketing, advertising, and PR industries as well. Businesses must thus explore their potential, especially if they want to remain relevant in 2023 and the years to come.

Business Cases of Augmented Reality In Marketing

Though augmented reality in marketing is still a relatively new technology, it’s already being used by several clever and innovative organizations.


Netflix launched an in-person AR-enabled adventure where fans of the series could explore the laboratory that was featured in the show. Referred to as “The Stranger Things Experience,” visitors could navigate their surroundings and enjoy special effects with augmented reality. 


Most of us may have only heard of AR in recent years but Pepsi has been using it in its marketing as far back as 2014. The soft drink company installed special windows in London bus stops that seemed to reflect the real world, however, commuters did a double-take when they saw a rampaging robot, flying saucers, and a tiger on the loose (all computer-generated of course) through it. It got people talking and certainly made waiting for a bus a lot more interesting!

Try Before You Buy Apps

Several companies have used augmented reality for marketing by allowing potential buyers to see what they would look like once they’re in use.

  • Home Depot lets customers see what their paint colors, furniture, and other items would look like in their living spaces through their mobile devices.
  • IKEA has adopted the same principle by letting buyers digitally superimpose IKEA merchandise in users’ homes through the IKEA Place app.
  • Sephora’s Virtual Artist app lets shoppers test products on themselves digitally before making an actual purchase.

Through such AR experiences, companies have been able to increase their subscribers and sales but more on that in the next section.

Benefits of Augmented Reality in Marketing

Augmented reality allows customers to enjoy an in-store experience from anywhere they like. It can also be used to make shopping more enjoyable, unique, immersive, and experimental. Information published by Google revealed that up to 66% of customers prefer using AR while shopping. 

Augmented reality in marketing can help brands stand out from their competitors while facilitating better relationships with customers. The interaction that AR enables can lead to conversation and sales, thereby helping a company grow.

AR offers several key benefits that can benefit any marketing strategy. These advantages include:

Brand Promotion

Promoting a brand or a company’s products or services through AR enables companies to create immersive, innovative, and interesting ads that are highly effective in driving sales and generating revenue by boosting brand awareness.

Generate Word-of-mouth Marketing

Word-of-mouth marketing, or “generating a buzz” is a highly effective way for a brand to grow its sales and boost revenue.

AR advertisements are a unique feature and therefore extremely appealing and memorable for customers. They’re thus more likely to talk about the experience with other people. 

Uber’s AR campaign in Zurich got people talking by offering virtual adventures at the Central Station. They generated over a million views on YouTube!

Broaden Market Reach and Audience Base

AR advertisements help brands reach larger audiences as they create unique experiences that customers are enthusiastic to share with others. This allows brands to tap new buyers.

Guide Purchasing Decisions

Interesting content and interactive, immersive AR ads boost engagement which can make savvy companies the preferred brands in the minds of shoppers.

Additionally, customers may be hesitant to purchase certain products without trying them out first. By offering them the opportunity to use AR to visualize products, companies can guide them on their decisions, which can lead to higher conversion rates.

Enhanced B2B

The business-to-business (B2B) sales process is fraught with customer expectations and vendor limitations. AR can significantly improve sales by creating dynamic material for sales presentations. It enables brands to present customers with a 360-degree view of their products, giving businesses the upper hand.

More Personalized and Effective Ads

AR allows companies to create engaging experiences that are highly personalized. Companies can leverage personal AR marketing by creating programmatic ads, messaging, and advertisements. Personalized ads can even be used to connect with potential customers on a more emotional level, making the experience more meaningful and memorable for those who are exposed to it.

Despite its many benefits and the fact that 32% of consumers already use AR while shopping, the technology is only being used by 1% of companies. 

How You Can Leverage Augmented Reality in Marketing

Whether you’re an old established company or a budding up-and-comer, AR is an exciting and promising way to market products. Here are some ideas on how you can make it work for you:

Allow Customers To Try Before They Buy

IKEA, Sephora, Home Depot, and many others are doing it so why shouldn’t you? Companies are using AR to transform the buying experience and make it more novel by allowing customers to see its benefits and features before paying a single cent. In return, businesses are seeing remarkably higher conversion rates and highly engaged customers.

Augmented Assistance and Touring

Augmented reality can be used to enhance the assistance you provide customers by adding a digital component on top of the physical product or location. You can use AR to offer a tailored experience to customers with additional information about the product or create a supplemental experience related to the brand.

In terms of real estate or interior decor, companies can enhance their tours by incorporating an AR experience within their in-person tours. This can allow customers to envision what an empty space could look like once the interior decoration is completed.

Experiential Marketing

Short attention spans often act as major barriers and make it difficult for brands to appeal to their target audiences. Since AR is a novel and immersive experience that is combined with computer-generated content, AR can help build traction by giving customers a memorable AR experience that helps you stand out from your competitors. 

Before You Go: Augmented Reality is the Future of Marketing

Smart companies know that they should embrace innovation and not shy away from it. With its many applications in marketing, AR presents businesses with many ways to catch their customers’ attention, engage with them, and encourage them to buy. 

Though it may seem too new for many, now is the perfect time to explore AR’s potential and what it can do for your business. Kala can help you navigate this largely unchartered terrain and help you make AR work for you. As a digital agency with extensive industry experience and a long list of satisfied clients, Kala is your ideal partner for augmented reality and digital marketing.

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