Latest / Marketing Made Simple with Fexingo: Branding, SEO, and Digital Strategy for Beginners / Why Brands Are Betting on Augmented Reality in Marketing
Transcript
- Lucas: So we talk a lot on this show about brands trying to capture attention in a crowded feed. But what if the ad could literally jump out of the screen and sit on your coffee table? Luna: You're talking augmented reality. And I have to admit, my first thought is still the Snapchat dog filter. Lucas: Right, that's the curse of AR — it got associated with silly face swaps early on. But look at the numbers now. IKEA released their Place app back in 2017, and it's become one of the most cited case studies in retail AR. Users who placed a virtual sofa in their living room converted at a rate 11 percent higher than those who didn't. Luna: Eleven percent is significant, especially for a big-ticket item like furniture. Returns are a huge cost in that category — I've read that furniture return rates can hit 30 percent for online orders. Lucas: Exactly. AR directly attacks that pain point. When you can see exactly how that Ektorp sofa fits in your space, you're less likely to send it back. IKEA hasn't published updated return figures specifically, but the logic is sound. And they've kept investing — the app now has AR for thousands of products, not just a handful. Luna: Sephora took a similar bet with their Virtual Artist. You point your phone at your face, and it maps on lipstick or eyeshadow in real time. Lucas: And the data there is even more striking. Sephora reported that Virtual Artist users were 31 percent more likely to convert on lip products. Think about that — nearly a third uplift in conversion from a single AR feature. Plus, average basket size increased by 11 percent for users who engaged with the tool. Luna: So AR isn't just a gimmick that gets press. It's actually moving the needle on core ecommerce metrics. But those examples are both app-based. Doesn't that limit reach? You have to download an app to use it. Lucas: That's the big friction point, and brands have been wrestling with it. IKEA Place had something like 2 million downloads in its first year. But that's a drop in the bucket compared to IKEA's total customer base. The shift now is toward web-based AR — no app required. Apple's ARKit and Google's ARCore have made it possible to run AR experiences directly in mobile Safari or Chrome. Luna: So someone browsing on their phone clicks a 'view in your room' button, and boom — AR loads in the browser. Lucas: Exactly. Amazon has been rolling this out for furniture and electronics. Nike did it with sneakers. The user doesn't need to download anything. The technology is good enough now that the experience is nearly as smooth as a native app. And the drop-off rate is way lower because you skip the install. Luna: But let's talk about the cost. For a small or mid-size brand, building a custom AR experience sounds expensive. Lucas: It used to be. Five years ago you'd need a dedicated development team and months of work. Now there are platforms like Zappar, Blippar, and 8th Wall that let you create AR campaigns with drag and drop tools. A basic web AR experience can cost anywhere from five thousand to thirty thousand dollars, depending on complexity. Compare that to producing a TV commercial, and it's a fraction. Luna: And the ROI can be enormous if the campaign goes viral. Pepsi's AR bus shelter campaign in London is still the gold standard in my mind. Lucas: Oh, that was brilliant. They turned a bus shelter screen into a live window showing augmented scenarios — a giant robot walking down the street, a meteor crashing, a tiger escaping. It was pure entertainment. And it generated six million organic impressions in one week. No paid media behind it. Just people filming the screen and sharing it. Luna: That's the sweet spot: AR that's inherently shareable. Because the experience itself is the content. You don't need to create a separate ad about the AR — the AR is the ad. Lucas: And that's where a lot of brands still miss the point. They build AR that's functional but boring — like a 3D product viewer that doesn't add any delight. The best AR campaigns blend utility with surprise. Pepsi's bus shelter was pure surprise. But Sephora's Virtual Artist is pure utility — and it works because it solves a real problem. Luna: So what about the risks? I've seen some AR campaigns that just feel like a tech demo rather than marketing. Lucas: That's the biggest danger. If the AR experience doesn't connect to a genuine customer need or brand story, it's a waste. I remember a luxury watch brand that created an AR try-on but the watch floated two inches above your wrist — terrible tracking. That kind of execution does more harm than good. It makes the brand look out of touch. Luna: And there's the privacy angle. AR uses your camera, which makes people nervous. Brands have to be transparent about what data they're collecting and that they're not storing images. Lucas: Absolutely. Sephora explicitly states that they use facial mapping in real time and don't save the images. That trust is crucial. For web AR, the processing happens on the device — no video is sent to the cloud. Brands need to communicate that clearly. Luna: We've been talking about AR in ecommerce and out-of-home. But what about AR in social media? Brands are already using Instagram and Snapchat AR filters for product launches. Lucas: Social AR is huge because the distribution is built in. A user tries on a filter and shares it with their friends. Gucci did a filter that let you 'try on' sneakers on Instagram, and it generated over 20 million impressions in a week. The cost to create that filter was probably under 50 thousand dollars. That's a cost per impression that most media buyers would kill for. Luna: And the filter stays live. It's not a campaign that runs for a week and disappears. People can keep finding it and using it. Lucas: That's the long tail advantage. A well-designed social AR filter can be discovered for months. Brands like Taco Bell and Kylie Cosmetics have had filters that resurface years later. It's like a piece of content that keeps working. Luna: So if a small business wanted to get started with AR today, what would you recommend? Lucas: I'd start with a simple web AR experience that solves one specific problem. If you sell furniture, build a 'view in your room' for your top three products. If you sell cosmetics, a virtual try-on for your best-selling lipstick. Use a platform like 8th Wall or Zappar — they have templates. Test it with a small ad budget on social media. Measure conversion rate lift and return rate. That's a low-risk way to validate whether AR works for your category. Luna: And what's the outlook? Is AR going to become standard for ecommerce, or will it remain a novelty for big brands? Lucas: I think it's going to become standard, but slowly. Apple and Google are baking AR deeper into their operating systems. The hardware is getting better — phones have LiDAR scanners now. And consumer comfort is increasing. A survey last year found that 67 percent of smartphone users had used AR in some form. That number will only go up. Luna: It reminds me of how people thought QR codes were dead — until the pandemic made them essential. AR might have a similar moment where it crosses from optional to expected. Lucas: That's a great comparison. And speaking of essential tools, this podcast is ad-free and listener-supported — and if these marketing conversations have sparked something you've actually used in your own work, that's exactly the kind of value we hope to deliver. We keep the show free of sponsors and interruptions, and the way that works is through listeners who decide to support it directly. Luna: Yeah, it's a simple model. If you've gotten something useful out of episodes like this one on AR, or the earlier ones on audio branding or referral programs, a small contribution at buy me a coffee dot com slash fexingo goes a long way. It helps us keep doing the research and keep the episodes ad-free. Lucas: Exactly. No pressure, no perks, just a way to keep this resource available to everyone. Now, back to where we were — I want to talk about one more case that I think shows where AR is headed next. Luna: Lay it on me. Lucas: Porsche recently launched an AR owner's manual. You point your phone at the engine bay, and it overlays labels on all the components — here's the oil dipstick, here's the coolant reservoir. It's not a marketing campaign; it's a utility. But it builds incredible brand loyalty. When you make a customer's life easier with a piece of tech, that association sticks. Luna: That's smart. It's AR that adds value after the purchase, not just during the decision phase. Most brands focus on the top of the funnel — awareness and consideration. Porsche is using AR to improve ownership experience. Lucas: And that's where I think the next wave of AR marketing will go. Not just helping people decide what to buy, but helping them use what they already own. Furnace filters, home appliances, even furniture assembly — imagine pointing your phone at a flat-pack box and seeing step-by-step instructions projected onto your floor. Luna: IKEA actually did that with their assembly instructions app. But it's still not mainstream. Lucas: It will be. The technology is ready. The consumer behavior is catching up. And brands that start experimenting now will have a huge advantage when AR becomes table stakes. It's not about being a pioneer for the sake of it — it's about learning what works in your category before your competitors do. Luna: So the takeaway: don't think of AR as a gimmick. Think of it as a tool that can reduce friction at multiple points in the customer journey — discovery, consideration, purchase, and even post-purchase. Lucas: Exactly. And start small, test fast, and let the data tell you whether to double down. That's the marketing approach for any channel, AR included.