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Marketing Frontiers is a new series from Stagwell exploring the methods, mediums, and messes modern marketers will grapple with over the next decade as they chart transformation in the discipline. This March, Stagwell is exploring Audio.

TL;DR:

Consumers desire a single platform to satisfy all their listening needs, making the audio streaming wars a hotter competition for attention than video and TV. 

The success of global entertainment content in recent years  presents a clear opportunity for content development in audio.   

Audio streaming is still a nascent space – so prioritize identifying early gaps or “deserts” that can become substantial growth opportunities 

The audio streaming wars have been back in the spotlight in recent weeks following a high-profile boycott of Spotify launched by rock legend Neil Young in protest over COVID misinformation on the platform. Across social media, there has been fierce debate about how much responsibility streaming services should take for the content they host—and what ethical and financial obligations these platforms have to the creators who depend on them. 

There’s a reason that these debates attract so much media and consumer interest. It’s becoming increasingly clear that the audio wars are a zero-sum game—much more so than TV and film. As a result, it’s impossible to separate the fate of giants like Spotify from the fate of the audio streaming industry at large. 

Why is it zero-sum game?  

Unlike video streaming, where the average consumer has a subscription to five different services, 83% of Americans prefer to turn to a single audio app to satisfy all their listening needs. And 86% of consumers say that they’re unlikely to start paying for a new audio streaming service within the next six months. 

The barriers to entry in this market are exceptionally high. Most consumers simply aren’t willing to use multiple services to track down all the music and podcasts they want to listen to. And once they’ve found a service they like, they’re unlikely to jump ship—especially since doing so usually means abandoning the playlists they’ve lovingly curated over time. 

So, what can brands do to attract new users with audio content such a cut-throat and competitive environment? Here are three recommendations from our research: 

Find ways to make your users feel closer to the creators they love 

Consumers don’t want to be passive listeners anymore; they want to immerse themselves in the creator economy and feel like part of an active, thriving community. 69% of listeners say that they want to do more to support their favorite creators—for example, by buying merch, attending live events, or engaging in micro-payments. And two thirds of them are interested in one day learning how to create audio content themselves. 

Focus on creating a truly global content library 

The success of overseas streaming content like Squid Game and Money Heist demonstrates that Americans are increasingly willing to engage with media from outside their own country. And the data suggests that this is just as true for audio content. 7 in 10 Gen Zs and Millennials use podcasts as a way of virtually travelling to new places and hearing new perspectives, and 42% of consumers say they’ve started listening to cross-cultural podcasts within the past year. 

Identify “audio deserts” and create content to fill those gaps  

Despite the boom in audio content over the last few years, not all audiences have been equally well-served by the content on offer. For example, Black and low-income consumers are more likely than other groups to say that they’re not interested in the audio content currently available on the market. Identifying and targeting these audiences that have, so far, been left behind by the streaming boom can help your platform create a resilient niche for itself. And as evidenced by the strong mix of more diverse content dominating the entertainment wars on social and streaming properties, engaging with these audiences can be great for driving growth.  

For more on the listening habits of consumers, and what they mean for streaming services, see our full report: Welcome to the Future of Digital Audio. 

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Virtual worlds are on the rise – and the time people spend in them is only going to increase. With popular artists such as Justin Bieber, Travis Scott and Ariana Grande having already performed in the metaverse, brands know that the future is virtual and that the possibilities of marketing in the metaverse are seemingly endless. In the last few months, we’ve seen an explosion of brands using NFTs to connect with and engage their consumers.

As AOR for Budweiser, Allison+Partners supported the brand’s entry into the metaverse with the launch of the Budverse Heritage Collection on Cyber Monday 2021. The brand’s first-ever NFTs are a curated set of unique digital cans representing 1936, the year the first Budweiser can was created. This launch marked the brand’s first foray into the world of unique digital assets on the blockchain and represented Anheuser-Busch InBev’s first owned NFT marketplace, Budwesier.com/NFT.  Each Heritage Collection token is a one-of-a-kind digital asset generated using designs from throughout Budweiser’s history and was available to consumers of legal drinking age via two different token types at launch – Core Heritage Cans and Gold Heritage Cans. The Gold Heritage Cans are rarer, with only 36 in existence and included access to and/or exclusives for future Budweiser in-person events and early access to future brand NFT launches. There were 1900 Core Heritage cans released.  

The launch was incredibly successful, with the collection selling out within an hour, a fact the team quickly added to media follow ups, with efforts resulting in 243 million impressions, including coverage in Entrepreneur, Decrypt, and multiple stories in AdAge.

For an iconic brand like Budweiser, there are numerous benefits to being seen as an early adopter in this space. The brand has been a major influencer and contributor in sports and entertainment and NFTs represent the future of where consumers are going to socialize and be entertained. In addition, NFT marketplaces enable Budweiser to provide consumers with a richer and deeper brand experience, leveraging technology for increased engagement.

Late last month, the A+P team supported the brand’s release of its second NFT collection, The Budweiser Royalty Collection, which also quickly sold out. The brand partnered with 22 of the world’s top emerging music artists to drop their first-ever NFTs and provide them with a global platform they might not have access to otherwise. The drop also allowed fans the opportunity to support artists directly and potentially unlock exclusive experiences with them. Through the Budweiser Royalty Collection, Budweiser continues to give local artists a global platform and support their journey towards becoming the next Kings and Queens of the music industry. Coverage resulted in 144 million impressions and included stories in Benzinga, Medium, INSIDER and many more.

Earned coverage of Budweiser’s entry into NFTs successfully positioned the brand as an innovative leader in the space and demonstrated how AB InBev is leveraging technology to engage brand fans in an entirely new way. Both the Budverse Heritage Collection and the Budweiser Royalty Collection offered consumers the ability to collect and own a digital piece of the Budweiser brand, as well as gain exclusive access to brand experiences.

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Everyone is trying to figure out what to do about non-fungible tokens (NFTs). These modern tools, born out of the crypto boom, have been viewed as both a passing fad and a future tool for artistic compensation.

Recent research from The Harris Poll and R&CPMK found that about half of consumers familiar with NFTs (47%) are interested in brands offering them as a commercial product, providing new use cases for brand marketers to capitalize on the hyper-relevant digital tokens that occupy so much consumer mindshare. When leveraged correctly, NFTs offer several applications for driving increased revenue and awareness around brand products:

1. NFTs as an incentive for a larger purchase. 

Big-ticket items such as festival tickets, cars or trips can make most consumers hit pause and consider purchases. Unlike impulse buys – such as food, beverage or CPG products – these larger ticket items often require repeated exposures to creative campaigns or an extra incentive to push consumers over the line on a purchase.

Our research indicates that NFTs could offer marketers another tool for pushing customers through the funnel, with 30% of Americans stating they would like to receive an NFT as a gift with a purchase.

Indeed, the possibility of attaching an NFT to a purchase teases several value creation possibilities for brand marketers. For live events or travel, an expiring NFT offer could provide a sense of urgency to the purchase as an added incentive to buy now. NFTs could also offer a a seal of authenticity. For example, luxury brands such as Gucci are experimenting with NFTs tied to the purchase of their products. The NFT in this case serves as a luxury indicator, marking the occasion of the purchase and proving the authenticity of the brand to others or third-party buyers.

Whether driving immediacy for an upcoming purchase or as an addendum to prove the authenticity of a luxury item, incentive-based NFTs provide marketers innovative ways to leverage this new technology. By tying a unique token to a physical product or experience, it marks that purchase as special. And the specialized, unique value of NFTs can boost sales, create differentiation and ultimately increase the perceived consumer value of a product.

2. NFTs as commemorative memorabilia to deepen consumer connections

Much like apparel, figurines or trinkets, an NFT represents a myriad of options for marketers looking to create unique, commemorative items for specific events. Instead of tying an NFT to a purchase, marketers can use NFTs as a subsequent item to deepen consumer connection within a marketable moment in time as a token of appreciation.

In fact, 38% of consumers aware of NFTs in our survey stated that they prefer an NFT over physical memorabilia to commemorate their time at a sports or entertainment event. Memorable entertainment and sports events, which rank especially high on consumer passion indexes, have a unique opportunity to sell or give away NFTs to commemorate the occasion.

Sports leagues, teams and venues could distribute NFTs based on notable moments that took place during a game, such as a home run, game-winning goal or even a championship. Music venues could also craft NFTs representing the location, year and artist performing. Similarly, art festivals or exclusive cultural events could offer NFTs celebrating attendance.

Live Nation CEO Michael Rapino noted that NFTs are a major future-looking strategy for the company’s concerts and events, stating, “We envision Live Nation participating within the [NFT] marketplace by looking at some of our concert moments as magic moments that we could mint and attach to our ongoing ticketed festivals.”

Several sports teams, including Mark Cuban’s Dallas Mavericks, are also experimenting with NFTs to layer onto ticket sales. With so many moments to commemorate during an immersive live fan experience, NFTs present marketers with new ways of deepening consumer relationships by leveraging digital tokens that can capture those same moments and make them endlessly accessible to fans. In a not-too-distant future, fans may hear, “Thank you for coming, here’s an NFT.”

3. NFTs as additional revenue streams

As opposed to offering an NFT as strictly a purchase incentive or as memorabilia, they are also sellable products themselves—providing brands new ways of generating additional revenue beyond the initial purchase price. The tokens can represent almost anything, allowing brands to apply them liberally across different products.

Of consumers familiar with NFTs, 41% say they are likely to buy one, according to our research. And these potential buyers are most interested in purchasing the following types of NFTs:

34% would consider buying an NFT of a video game asset (e.g., characters, special armor)

33% would consider buying an NFT of artwork

30% would buy an NFT of a social media post

30% would buy an NFT of a video (e.g., event recording, interviews, blooper reels, etc.)

One of the most compelling applications is tying ancillary benefits to the purchase of an NFT. For example, the band Kings of Leon offered fans an NFT in exchange for a digital download and vinyl copy of its newest album, “When You See Yourself.” Taking the practice one step further, a higher value NFT gave the buyer lifetime front-row seats to Kings of Leon shows and special backstage passes. These benefits created new subproducts for the band, independent of album or ticket sales, that generated more than $2 million.

Entertainment, sports, the arts and cultural events are the industry categories where consumers are most likely to buy NFTs. For those consumers considering an NFT purchase, they were most likely to buy from a streaming platform (28%), an artist (27%), a blockchain trading platform (27%), a sports organization (19%) or at an in-person/virtual event (18%). For those innovative brands willing to experiment with ancillary NFT products, digital tokens offer fantastic ways for companies to increase their bottom lines.

As digital representations of the modern world with nearly zero creation costs, non-fungible tokens provide brand marketers limitless upside potential. They provide incentives for larger purchases by creating immediacy, additional value and marks of authenticity. And they can serve as unique memorabilia to deepen consumers’ connection to memorable moments, concerts or sporting events. Lastly, NFTs offer brands innovative ways to package digital products alongside physical ones to drive additional value. The only question that remains is, “What can you digitally dream up next?”

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Marketing Frontiers is a  series from Stagwell exploring the methods, mediums, and messes modern marketers will grapple with over the next decade as they chart transformation in the discipline. In February, Stagwell is exploring the rise of NFTs. 

NFT craze is a strong case study in three behavioral psychology concepts: Scarcity, Social Proof, and Signaling. 

Marketers who leverage these concepts to drive NFT adoption are poised for growth. 

Marketing is all about creating value above and beyond a product or services’ inherent value. How can I charge more for my bottle of water that’s basically the same as the one right next to it?  

NFTs are perfect for studying marketing. Most NFTs have no inherent physical value. Most do not ‘do’ anything in the physical world (though some do have a physical component such as restaurant reservations or social clubs). Most can be copied with a simple screenshot or screen record. Their value is predicated on someone else wanting the same NFT.  

So how do you get someone to buy something with no inherent physical value? Marketing and psychology. 

This article is going to cover some of the psychological principles behind the current explosion of NFTs and the lessons they provide for marketers.  

Scarcity

Scarcity is one of the most well-known economic and psychological principles. As supply decreases, demand increases. Humans tend to want resources that are difficult to obtain or are in short supply. 

NFTs are an interesting case of scarcity because almost all NFT scarcity is artificial. Some of the best-selling NFTs are programmatically created (such as Bored Ape Yacht Club). They’re made using a computer program that varies several factors (facial expression, facial features, clothes etc.) to create different characters. It would be simple to create more characters or more copies of the same characters. They are not constrained by raw materials, production costs or distribution.  

However, NFT producers limit their supply. In fact, their limited nature and sense of exclusivity is partly what makes them appealing despite it being entirely manufactured. NFTs have seemingly been able to avoid criticism for artificially constricting supply. This has often not been the case for brands selling physical products. Some speculated whether Nintendo’s supply problems during the launch of the Wii in 2006 were really production issues or a strategic play to drive up sales. High end fashion brands are often criticised for burning their unsold clothes to control their prevalence. Despite this, some brands, such as Supreme, have thrived by limiting stock and driving up demand. 

The current culture around NFTs seems to allow brands to artificially constrain supply without much public backlash. However, this could quickly change, especially if consumers realize they’re bidding on something where supply is being artificially constricted. 

Social Proof

More fuel to the NFT fire is social proof. Humans are social creatures. We’re heavily influenced by the behaviour of others, especially role models. NFT sellers have done a good job of breaking into celebrity culture. The list of celebrities owning NFTs is extensive (Eminem, Jimmy Fallon, Steph Curry etc.). This adds to their legitimacy (and drives up prices should they ever wish to sell their NFTs). YouTuber and boxer Logan Paul and businessman Gary Vee (9.7m and 22.1 mil Instagram followers respectively) have been extremely vocal about their NFT collections.  

Those looking up to these celebrities are more likely to follow their lead and purchase NFTs for themselves. Abercrombie and Fitch used a similar strategy. They marketed to younger people. This in turn led to older people buying their products to stay ‘trendy’. NFTs that manage to get a celebrity sale will also get sales from other people looking to ride the hype train. 

Signaling

Linked to social proof is signaling. We like to display our status. It helps us to judge ourselves and our in-group vs others. What better way to show that you’re an affluent, tech savvy, early adopter than to buy a digital image or video with no inherent value?  

Many people buy NFTs and then share them on social media to show off their purchase, proof of the power of signaling.  Signaling is the primary motivation behind many luxury goods. Further, many social acts such as voting and switching to electric vehicles are being encouraged through signaling such as ‘I voted’ stickers and green number plates respectively. As the world becomes even more digital, NFTs could become the ultimate signaling, luxury good. What’s better than a luxurious coat? A luxurious line of code.  

Ultimately, people buy NFTs because they’re scarce, new, celebrities & business leaders are buying them, and they say something about the owner. Or, like cryptocurrencies, they’re bought simply to be sold later for a profit.  

The future of NFTs is hard to predict. The housing market bubble leading up to 2008 popped partly because people realized the underlying value of the asset was far lower than was being portrayed. If everyone keeps believing in the value of NFTs, they will continue to prosper. However, even if the NFT bubble bursts, it’s been a quintessential lesson in how value can be created where there is none, with scarcity, social proof and signaling. 

Matthew Hellon is a Senior Research Executive at Northstar Research Partners, a full-service global insights agency in the Stagwell network. Hellon was named Young Researcher of the Year in 2021 by the Market Research Society for his contributions at the intersection of marketing and behavioral science. Connect with Matthew on LinkedIn.

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Marketing Frontiers is a new series from Stagwell exploring the methods, mediums, and messes modern marketers will grapple with over the next decade as they chart transformation in the discipline. This February, Stagwell is exploring NFTs.

NFTS are an opportunity brands shouldn’t pass on. 

Two strategies are driving value: incentivizing real-world action with NFTs, and using them to build loyal long-term consumer segments. 

In the old days, marketing companies incentivized consumers with free toasters. Today, they give you an NFT, a digital good that may be even more useful. It’s easy to confuse the NFT craze with other emerging new technologies but they stand apart as offering several unique areas of potential value. First, they provide individually usable coupons or discounts that can be tracked; Second, they offer permanent digital copies of paper goods; and third, they offer collectible opportunities that could soar in value,

Brands want to experiment with NFTs but are struggling to determine whether it’s a fad or an effective long-term brand strategy. They must balance wanting to be first movers on exciting new tech that is racking up serious investment while pursuing virtual items as ways to connect digital and in-person experiences. But barriers make this investment difficult, including the expensiveness inherent in producing some types of NFTs, the wild fluctuation in selling prices, and the knowledge gap among consumers who are confused or otherwise skeptical about the technology.

While it’ll be a while before we can gauge the long-term impact of the NFT activations in the market now, it’s clear from early experiments that two styles of NFT activations are proving successful: those that connect digital incentives to real-world action, and those that help build long-term, loyal consumer segments for brands – either within or beyond their usual consumer base. Sports marketers and luxury fashion brands are leading the charge on effective NFT adoption.

Incentivizing and Rewarding Real-World Action: Sports Brands

This Super Bowl, the NFL and Ticketmaster are partnering to provide in-person spectators free NFTS that commemorate their tickets and serve as digital keepsakes, giving an added boon to die-hard fans for their commitment to filling stadiums and solving for consumers who want a souvenir from the experience but are prone to losing ticket stubs. In addition to the free, wide-cast NFTs, a set of limited-edition tokens will be released to commemorate past Super Bowls hosted in the city of Los Angeles.

Giving consumers something meaningful for attending in-person events that taps into fandoms, hometown loyalty, and the desire to remember exciting experiences is one avenue of common-sense NFT adoption. These are not the flashy, expensive digital art being auctioned the NFT world is known for, but affordable, scaled and tied directly to an activity that fans have already shown engagement with: collecting stubs. These efforts teach a simple lesson about how to forge new paths with emerging technology: don’t reinvent the wheel; look for ways NFTs enhance or supplement existing real-world action.

A screenshot of the N.F.L.’s Virtual Marketplace for NFTs and other collectibles. 

Building Loyal Long-Term Consumer Segments: Luxury Fashion and Apparel Brands 

NFL/Ticketmaster’s effort doubles as a window into how NFTs are tapping into supercharged fan bases to build long-term, loyal consumer segments. Beyond sports, luxury fashion brands use NFTs to engage up-and-coming, nascent consumer segments and prime them for long-term engagement. Louis Vuitton rolled out an adventure game commemorating its founder’s 200th anniversary birthday, featuring a selection of hidden NFTs and a set of ultimate prizes tied to exclusive, real-world offerings. And this year, NYFW goes virtual – presented by Decentraland, the popular Metaverse destination. Decentraland will host a digital component to NYFW that includes runway shows and immersive experiences, branded NFT collections, and other collectibles and digital tokens. These efforts engage a younger set of consumers who may not yet have the disposable income for luxury material purchases in real-life but are attracted to the exclusiveness of the brand and excited for the digital follow-through.

We think NFT’s are too important an opportunity for today’s brands to take a pass on. We believe every brand needs to play in the space in coming years and integrate NFTs into their campaigns. Fans want digital assets of their favorite players; traceable coupons make great targeted assets to enhance customer experience; and everyone loves to collect something that could be valuable.

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By

Rico Cipriaso, SVP, Digital Strategy and Transformation
and Eric Ong, VP, Technical Director, Concentric Health Experience 

AR and mixed-reality are powerful tools for enhancing visualizations for patients and providers in healthcare marketing.

More immersive digital experiences can drive empathy, helping accurately model experiences and expected outcomes.  

Scaling AR experiences to platforms consumers actively engage with is the top executional barrier for today’s brands. 

Healthcare brands are ripe for the AR and mixed-reality revolution.

Everyone frets about their health. For someone newly diagnosed with a mispronounceable disease, picking up a prescription from the pharmacy for the first time is the culmination of multiple steps of worry, research, and grappling with challenging content. The pill or injection they receive is a reminder of hope and the possibility of a positive outcome. What if we could reinforce that hope with an experience that truly brings to life the sources of life-changing solutions?   

Imagine: a routine scan from your mobile device at the start of your treatment unlocks a window into information about the disease, expected outcomes, and the support you need to get through it. With augmented and mixed-reality, healthcare brands have an opportunity to create dynamic visualizations for patients and providers that arm them with the education to drive better experiences and empathy to drive positive outcomes. AR/VR will help enhance both B2B and B2C efforts. 

Aiding Modern Education

Precision and depth of understanding are essential for healthcare practitioners. With AR and mixed-reality, these professionals’ learning tools can be enhanced with more multi-spatial visualizations of the body, cell and chemical interactions, and more, giving providers the confidence to act decisively in treatment. 

We’ve seen that spirit extend beyond university and medical school settings; throughout the COVID-19 pandemic, public health professionals and medical influencers collaborated on mobile AR data visualization to help people better make sense of the large amounts of evolving COVID-19 data. Applying simple AR layers to social content can help bring life to flat charts with 3D animation, ultimately driving a more digestible and interactive educational experience. 

Driving Empathy Through Enhanced Experiences 

We know emotional appeal is the magic sauce of good marketing. Enabling more immersive healthcare brand experiences in B2B and B2C with mixed-reality can give brands the tools to emulate patients’ experiences, model the impact of new drugs, products, and services, and help translate patients’ lived experiences. In our award-winning work for Sunovion, we leveraged VR to bring Lonhala Magnair’s in-person, interactive “Room to Breathe” to more healthcare providers. We rendered the home of a user of the drug in VR to showcase how each room of the house reflects the product’s unique features, including nigh silent administration, quick nebulization time, and convenient audiovisual feedback. The campaign grabbed the attention of prospective targets in an eye-catching way and helped place them in the patient’s shoes. 

These mixed-reality approaches can also arm those suffering from chronic health ailments with tools for better communicating their needs and experiences. Excedrin’s 2016 Migraine Experience VR campaign used mixed-reality to model the audio, visual, and spatial effects a migraine can have on a patient, adding an experiential layer that helped drive added empathy. Their effort went beyond the VR headset experience to include a mobile app version that let anyone share the experience with loved ones. With the world returning to the office from remote work, healthcare brands will have many opportunities to generate compelling mixed-reality content about navigating and advocating for support in this evolving health environment. 

Finally, B2B healthcare marketers exhibiting at trade shows can integrate mixed-reality into their product demonstrations and showcases to enhance the persuasive element of their presentations.

What to do? 

1. Think beyond a standard deliverables list, to envision impact first. 
2. Seek partners that understand the current martech landscape wand are committed to experimenting with new storytelling methods. 
3. Always develop a plan and allocate funds for extensive testing. 

Exciting possibilities await healthcare brands with mixed-reality, but executional barriers remain, from closed Martech platforms that don’t yet allow AR or VR executions to the difficulty of getting mixed-reality experiences into the hands of target audiences. Rolling out an AR or VR experience now often means introducing a new platform to consumers – and we know consumers find difficulty in leaving an already-familiar walled garden. As a result of this, while the idea behind an experience may be great, brand efforts end up shifting from building more engaging experiences to solving the issue of sourcing new products and tech solutions to make mixed-reality. Realistically, brands will need to create these experiences on apps and platforms their consumer bases already engage with, or the bar is high for scaling adoption. 

The good news: more investment in mobile mixed-reality makes this a ripe time to experiment with these new digital marketing tools to ensure your brand is prepared to leverage emerging mediums of storytelling and consumer connections. 

Now is the time to stretch your creative possibility and think beyond a standard deliverables list to envision impact first. Being able to experience healthcare solutions is more potent than simply knowing about them – how can you use mixed-reality to drive more effective marketing? 

Second, seek partners that understand the current martech landscape and are committed to exploring how newer storytelling mediums unlocked by emerging technology integrate into omnichannel marketing efforts. Be critical about whom you work with: they should be conversant in the potential of mixed-reality while nursing a healthy skepticism for the tactics needed to scale consumer adoption.

This leads to our final advice: always ask your mixed-reality partners to develop to plan and allocate funds for extensive testing. Because of the high engagement barrier inherent in these solutions, you want to ensure your brand comes to your customers with a fine-tuned, new and expansive way of telling your story, absent any kinks in the user experience.

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Marketing Frontiers is a new series from Stagwell exploring the methods, mediums, and messes modern marketers will grapple with over the next decade as they chart transformation in the discipline. This January, Stagwell is exploring the new frontiers of Augmented Reality.

Retail happens at the convenience of the consumer. 

AR can change when and where brands build experiences, the discovery-to-purchase funnel, and how brands navigate the blended shopping experience. 

Three trends will lead retail AR: Try Before You Buy, New Discovery Dimensions, and the Gamification of Retail. 

The next decade of retail will no longer unfold on a brand’s terms. Digital transformation and the blending of in-person and physical experiences means commerce happens at the consumer’s convenience: on mobile devices, in between meetings, on the subway, and everywhere in between. This pivot will fundamentally change when and where brands build experiences, the discovery-to-purchase funnel, and the need for solutions that adopt the functional convenience of brick-and-mortar retail across any digital platform. 

This change is more of an opportunity than a challenge. Mobile AR in retail has unlocked three trends worth capitalizing on for brands seeking creative strategies for adopting AR across their retail experience. 

Try Before You Buy 

Apparel and home goods have fine-tuned the use of mobile AR to “try before you buy,” allowing consumers to scale clothing sizes to their figure using their cellphone’s cameras or gauge whether a futon will fit in their apartments. Brands that haven’t sought ways to activate mobile AR yet should jump on the trend. Those who have should look for opportunities to push beyond rendering individual products in mixed-reality to build entirely virtual closets and storefronts, in line with the experiments brands like Kohl’s, FaceCake, and Snap have pioneered.

Give consumers the ability to purchase, try on, see reviews, engage with a customer specialist, and more without leaving the comfort of their homes, and you crack the convenience code. Imagine the world of possibilities for more addressable marketing, influencer integrations, and social commerce.

AR isn’t just landscape for apparel and home goods. Food and CPG brands might foray into more AR content experiences that illuminate how their products can be blended to create exciting recipes. Picture Kraft or Nestle emblazoning their packages with QR codes that activate AR chef’s assistants on mobile to teach you the perfect way to blend pantry staples to make a complicated feast. 

New Dimension for Discovery 

The importance of convenience for consumers in the digital era doubles as an attention and discovery problem. Besieged by brand messaging, consumers have difficulty finding relevant and valuable marketing and promotions when they desire them. Those with smaller marketing budgets struggle to make noise in the din, barred from prime advertising real-estate. AR unlocks a new layer or dimension of marketing that can power intelligent, sustainable content opportunities to aid today’s brands in discovery. Location-specific AR overlays can add flair to major promotions, bring virtual participants closer to the brick-and-mortar experience, and transform common areas like subway trains or city parks into rich canvasses for marketing integrations. 

Savvy businesses might partner with regional publishers for guerilla OOH activations, placing QR codes at major city throughways that open up an AR directory of local retailers, shopping centers, and other nearby experiences. This would allow consumers to access an engaging universe of directional content while cutting expenses for regional media distribution and carving out more stages for branded placement and authentic advertising. 

Gamification of Retail 

The trend towards experiential retail underscores a key point about today’s consumers: digital experiences are never wholly individual. It’s why AR shows such promise for live events and retail. If you can add a layer of shared competition to your retail experiences, you can power deeper consumer engagement. Sporting apps that pit peers against each other to meet fitness goals could enhance that experience with an AR layer that allows for connection with nearby runners, displays local challenges like conquering a particularly steep hill, and rewards users with a coupon or digital assets.  

 In-store brands might roll out limited-time activations like scavenger hunts to encourage shoppers to engage with as many AR-powered product displays as possible to unlock additional savings at the counter. A retailer might also add an AR layer encouraging added engagement with overstocked items, bring product displays to life with virtual influencers rendered in AR, or use augmented reality content to add local color about in-store products. With experiments in NFTs and other virtual tokens and commodities, brands have an array of new tools at their disposal to encourage and reward hybrid engagement. 

What to do?

Our verdict: now is the time to experiment with and fine-tune brand-relevant strategies for working AR layers through the marketing stack. Mixed reality can be a serious investment. Brands should look for existing partners who can help deliver AR technology via platforms consumers are already engaging with to minimize the start-up costs of a new foray into AR. 

The question of budgets and investment aside, our advice about AR mirrors our advice about many new marketing frontiers: before running blindly in their pursuit, ensure the technology is additive to the digital layer of your brand. Ask yourself how AR will add dimensionality or a compelling new flavor of experience to the products and services you provide your consumers. We are bullish that AR’s value is creating shared experiences and enhancing convenience for today’s consumers. If your AR strategy doesn’t accomplish those two goals, you may be better off experimenting with other modern digital marketing tools. 

Finally, AR and the industry-wide focus on the metaverse is an opportunity to push innovation and creativity further than ever before. Don’t just replicate content and experiences in AR; redefine them. View augmented reality as an opportunity to unlock new ways to connect and communicate with your brand’s consumer base and zealously chase a more creative future. 

FEATURING

What are the forces at work reshaping the way brands and marketers connect with today’s consumers? The next decade of marketing innovation will be driven by the emerging technology piquing consumer, brand, and investor interest today: new mediums of storytelling unlocked by mixed-reality, new methods of communicating powered by social commerce, and problems to pre-empt driven by convergent social forces and the enduring digital acceleration.

Stagwell is all about transforming marketing – and we’re spending the year working with our agencies to explore how the most innovating and compelling opportunities in new frontiers will transform the way brands and marketers do business.

We’ll…

explore the practical, helping you understand things like if and how your brand should integrate virtual influencers in digital marketing efforts.

probe the conceptual…with questions like what responsibility brands have as they begin to imagine marketing and brand identity in space?

offer strategies for making sense of the monumental…with perspectives on how and when brands should get involved in the bourgeoning metaverse.

Meet Marketing Frontiers – Stagwell’s new content series that will unpack these blue-sky ideas before today’s brands, simplifying the future and helping leaders understand how these concepts will change the way we do business today and tomorrow.

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A study conducted on behalf of Protocol by the Harris Poll found that while most U.S. adults have not used augmented reality or virtual reality technology, a notable portion are interested in trying AR and VR. The study also found younger U.S. adults were more familiar with the metaverse than older U.S. adults, and that Americans are unsure about the future of the metaverse’s regulation. 

While most U.S. adults have not used AR or VR tech, many are still interested in adopting the technology. Early adopters of AR and VR tech skew younger.  

Three quarters (72%) of U.S. adults have not used any augmented reality technology. 

Currently, 16% of U.S. adults have not heard of AR technology. Part of this may be due to current product hesitancy or disinterest: only a quarter (25%) of U.S. adults have no interest in using AR technology. On the other hand, younger adults are more willing to embrace AR, especially Millennials. One in three (32%) Millennials currently uses AR technology (compared to 23% of Gen Z, 14% of Gen X, 6% of Baby Boomers). 

Although more hesitant, other “young” generations are also open to AR. 38% of Gen Z and 38% of Gen X have not used AR technology, but say they are interested in doing so.

Two-thirds (68%) of U.S. adults have not used any virtual reality technology. 

Currently, 12% of U.S. adults have not heard of VR technology. Hesitancy and disinterest in VR is similar to AR. Again, just a quarter (26%) are not at all interested in trying VR. Youth interest is also higher for VR. Three in five (61%) Gen Zers and 45% of Millennials have used VR technology at least once (compared to just 31% of Gen X and 10% of Boomers). 

Users of AR and VR technology have had enjoyable experiences with some of the more common products. The most used VR and AR technologies are: 

VR headsets (e.g., Oculus, HTC Vive) (61% used; of those, 88% had a positive experience)

Mobile VR apps (33% used; of those, 66% had a positive experience) 

AR social media tools (31% used; of those, 81% had a positive experience) 

VR motion controllers (e.g., standard hand controllers, wands, wheels) (30% used; of those, 77% had a positive experience) 

Unsurprisingly, younger people are more familiar with the metaverse than their older counterparts. Younger people also say more often that the metaverse will enrich their lives. 

Two in three (62%) U.S. adults said they were not familiar with the concept of the metaverse before taking this survey.

That said, younger generations are more familiar with the metaverse. 55% of Gen Z and 60% of Millennials are at least somewhat familiar with the concept of the metaverse (compared to just 35% of Gen Xers and 17% of Boomers).

Regardless of familiarity levels, even after reading a description defining the metaverse, 52% of U.S. adults feel overwhelmed by the concept. Similar to other new technologies – most notably NFTs – such sentiment reveals a population that needs a seemingly complex and abstract topic to become more simplified and relatable in order for adults to embrace it.

Four in ten (37%) U.S. adults agree that the metaverse would be more fun than real life, and 38% agree that the metaverse would make their life better. 

These numbers climb for Millennials. 53% agree that the metaverse would be more fun than real life, and 51% agree that the metaverse would make their lives better. These numbers also climb for people who were familiar with the metaverse before taking this survey. 54% agree that the metaverse would be more fun than real life, and 61% agree that the metaverse would make their life better. 

U.S. adults are unsure about the future regulation of the metaverse. That said, a noteworthy share agrees that no one company should own all of the metaverse. 

Overall, three in ten (27%) U.S. adults are not at all sure what group should regulate the metaverse, and another one in ten (9%) do not think the metaverse should be regulated. However, the vast majority of those previously familiar with the metaverse before taking this survey have an opinion of who should regulate the industry (92%).

Compared to just 19% of all U.S. adults, 28% of people who were familiar with the metaverse before taking this survey think metaverse and technology industry leaders should regulate the metaverse. 

Those familiar with the metaverse say more often that regulation should be in the hands of users themselves. Compared to 14% of all U.S. adults, 21% of people who are familiar with the metaverse think metaverse users should be in charge of regulation. Across awareness levels, the U.S. government (11% all adults) and independent oversight committees (14%) were less popular regulatory options.

Despite controversy around the expanding power of big tech firms, only one in three U.S. adults (37%) say the metaverse should not be owned by any one company. Perhaps surprisingly, even fewer of those familiar with the metaverse before this survey feel this way (19%). 

However, 63% of U.S. adults can see one company owning the metaverse. When asked who that one company would be, the top choices were Google (13%), Amazon (12%), Meta (11%), and Apple (10%).

For people previously familiar with the metaverse, the top choices shuffled slightly with Meta (17%) in the top spot followed by Google (16%), Amazon (15%), and Apple (13%). This could indicate a branding win for Meta among metaverse users and potential users.

The following companies had little support for ownership of the metaverse from U.S. adults:

Microsoft (7%)

Roblox (1%)

Snap Inc. (0%)

The Sandbox (0%)

Microsoft (7%)

For less established brands or brands that target younger audiences, a lack of overall brand awareness likely played a role in their lower position. 

Methodology:

This survey was conducted online by The Harris Poll on behalf of Protocol during January 14-18, 2022, among 1,060 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. Figures for age, sex, race/ethnicity, education, region, and household income were weighted where necessary to bring them into line with their actual proportions in the U.S. population. Propensity score weighting was used to adjust for respondents’ propensity to be online. For more information, please contact Madelyn Franz or Andrew Laningham.

Download the full data tables here.