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S3 E4: AR Ads and the Experience Economy
– With Tom Emrich

Jake talks with Tom Emrich, 8th Wall.

We’re entering a creative renaissance in the advertising industry. An era in which experiential creative and attention metrics are playing an increasingly essential role and new, measurable, experiential ad formats, like Augmented Reality, are taking off.

There are several key advances that will define this new era including renewed focus on attention, and the growing importance of branded experiences, especially for younger Gen Z consumers.

Tom Emrich has been in the augmented reality business for 13 years. He’s invested in AR, covered the space as a journalist and is now in charge of AR products at 8th Wall, a leading AR platform that, together with the team at Emodo, has brought AR into mainstream advertising with ads that have the AR experience embedded in the creative.

The topic of AR brings up a lot of questions. Jake zeroes in the top five:

Jake’s FIVE List:

  1. What is AR? What isn’t AR? – There are lots of misconceptions out there   
  2. The role of augmented reality ads in this new marketing environment that’s increasingly being referred to as The Experience Economy
  3. The measurability of AR ads, including attention and experiential metrics
  4. “Self-Personalization” and the types of experiences advertisers can enable directly within AR
  5. How to execute an AR campaign and where AR fits within your marketing plans

“I think this is fundamental with augmented reality advertising. It really enables that personal connection to happen very quickly with your brand and essentially moves that user through the funnel very quickly as well.”

Host Jake Moskowitz and guest Tom Emrich go deep on Augmented Reality and its impact as an advertising format. Along the way, Tom debunks some of the misconceptions about AR, describes success stories and simplifies execution, touches on the power of embedded AR ads and personalized ad experiences and muses about playing Pacman on the top of a Pizza Hut box with AR.

Additionally, Tom talks about how AR fits in with current advertising strategies, the use of today’s advertising metrics and the future of experiential metrics.

Some other stuff Tom says about AR during the conversation:

“This is the opportunity that is at hand – to move from 2D technologies like video, photos and gifs to 3D mediums and really allow for us to be present and experience technology in a brand new way.”

“It’s kind of built off of the sharing economy and in many ways where there’s less of a prioritization on having to own things and more of a prioritization on experiencing things at mass.”

Tom Emrich on the “Experience Economy”

“Before, you may have spent a lot of budget and time creating an installation at a mall and then maybe touring that installation to different malls getting. thousands of people at a time. Now you can create a digitized experience using augmented reality and you can advertise that via embeddable AR ads – and reach millions of people in that experience.” 

“If you have a specific analytics system that you’re using for your non-augmented reality branded experiences, for branded AR ads you can engage with that same system and incorporate those metrics into those dashboards.”

“I Think it’s also coming at the right time with the sea change in advertising especially with changes in cookies and user Identification.”

Tom Emrich on the virtues of AR in today’s advertising environment

“I love that term self-personalization. That’s exactly what’s happening and frankly, it’s going to get more and more robust and contextual.”


Transcript of S3 E4: AR Ads and the Experience Economy – With Tom Emrich

Tom:

I think this is like fundamental with augmented reality advertising that really enables that personal connection to happen very quickly with your brand and essentially moves that user through the funnel very quickly as well.

Jake:

Let’s talk innovation. Welcome to FIVE, the podcast that goes deep into marketing innovation, the big ideas in marketing and the marketing of big ideas. This is Episode Four, AR advertising and the experience economy. I’m Jake Moskowitz.

Voice Over:

Ladies and gentlemen, may I have your attention, please? I’d like to have your full attention. So can I have your attention?

Jake:

Yeah, attention. It’s really become the currency of our craft. It’s what all marketers want consumers to pay or give. Its value depends on supply and demand. It has its own p&l. And while we might call that a media plan, or a marketing budget, attention is what we’re basically buying and selling and every media transaction. We talk about grabbing it, like it’s getting away, and capturing it like it’s elusive for fleeting, because in advertising, it is. It’s getting harder to find the right audience, let alone capture their attention. But what marketers really need to do is catch it and hold it, hold it so the brand can engage those consumers with unique, memorable, compelling experiences.

When we last got together in episode three, we took a revealing look at the challenges facing some of the most beloved consumer brands, and of course, some really innovative ideas for addressing them. Among other themes, my guests candidly shared the importance of brand experiences. That’s what we’re diving into this time. Before we go there, I want to take a slight detour. Since Apple shifted their device tracking model from opt out to opt in and Google announced plans to do the same, many media and ad tech companies are downplaying the enormity of that shift. Nothing to look at here. While around the corner that train is speeding off the tracks. And spoiler alert, that train’s never running again.

Addressability with cookies and device IDs is a rapidly dying model. It served us well for decades, but it’s time to move on. So what’s the new frontier? Well, there are several key advances that will define this new era. But two of the headliners are one, a renewed focus on attention and two the growing importance of branded experiences, especially for younger Gen Z consumers. We’re entering a creative renaissance in the advertising industry, an era in which experiential, creative and attention metrics are playing an increasingly essential role, and new measurable experiential formats like augmented reality are taking off.

My guest this time has been shaping and enabling immersive augmented reality experiences for well over a decade. Today, it’s not unusual to discover engaging AR experiences on websites in apps and within e-commerce. That in itself is a compelling innovation story. But last year, AR took a giant innovative leap forward. AR crossed over from branded experiences solely available on a brand’s owned media to broad reaching experiences presented to millions of consumers across multiple media in highly immersive advertising. Thanks to visionaries like my guest, Tom Emrich and 8th Wall, the company he works for, the innovation of augmented reality ads brings a whole new dimension of experiential and engagement to the ad industry. And the timing couldn’t be better. If you’re an advertiser, you should definitely know a thing or two about AR. So you’re in luck.

Today we’re going to talk about five. Here’s where we’re going. We’ll talk about the role of augmented reality ads in this new marketing environment, a new era that’s increasingly being referred to as the experience economy. We’re talking about advertising here. So AR experiences have to be measurable. We’ll talk about attention and experiential metrics. We’ll discuss personalization and actual experiences advertisers can enable directly within AR and we’ll get into the how. How do you execute an AR campaign? And where does AR fit within your marketing plans? But since AR is relatively new in advertising, we probably need to start with a brief primer. What is AR? What isn’t AR? There are lots of misconceptions out there.

Tom Emrich, VP of product at 8th Wall. Thank you for joining us today.

Tom:

Thanks for having me.

Jake:

Tom, why don’t you tell us a little bit about you and your company and your role there?

Tom:

Sure, I’ve been working in augmented reality since 2009. I am Canadian. And back then I was a product manager working in media and publishing and attempting to use augmented reality to bridge the gap between digital and physical. In that case, it was paper, magazines, and newspapers. And I’ve been dedicated to the augmented reality space ever since then, I’ve  worn a couple of different hats. I’ve been a journalist, I’ve been an investor, and I’ve returned back to product here at 8th Wall. And at 8th Wall, we’re very passionate about making augmented reality for everyone. And we’re doing this by harnessing the power and freedom and flexibility of the web. And so 8th Wall has a leading web development, augmented reality platform, which enables agencies, brands and developers to create what’s known as web AR, and web AR allows for this augmented reality experience to be accessed and engaged in the browser, which means that there’s no app required to download.

Jake:

Excellent. Tom, tell me a little bit about 8th Wall, when did it get started? And what are some of the hurdles that have faced 8th Wall along the way?

Tom:

So the 8th Wall web product, which we’re most known for launched in late 2018. And since our first full year in 2019, we’ve now had over 1000 commercial experiences been built, using our platform, the web development platform that 8th Wall has, leverages our own proprietary augmented reality technology that is hyper optimized for the browser. And this allows for what we call worlf effects, which is placing augmented reality in the world in front of you using the rear facing camera of your smartphone, face effects, which many are familiar with, which uses your face using the front facing camera of the smartphone, as well as image target technology, which essentially brings to light posters or pages of a magazine.

I would say some of the biggest hurdles or obstacles that we have been taking on as opportunities here at 8th Wall really come down to removing that friction for augmented reality for brands and marketers in particular. You know, brands and marketers are excited about augmented reality, it’s a great way to engage users in a very new and immersive experience, a branded experience, but having the need to download an app to do that, it really is a huge barrier. And we’ve really worked very hard to remove that friction by dedicating our technology efforts to be focused on the browser.

Jake:

So why don’t we talk about AR? First of all, augmented reality gets conflated with several other things in my view. So why don’t we talk for a moment about what AR is and what AR isn’t? Let’s start off with what AR is, what do you think counts as augmented reality?

Tom:

That’s a really good question. So augmented reality, or AR is a technology that lets you experience digital content in the real world. And it does that by making use of the real world. So the technology senses the real world, you know, the environment, the objects, the people in the world, and then it overlays digital content onto the real world. And you experience that through a hardware device, like a smartphone. And so the blending of the digital world with the physical world is very unique to augmented reality. And the routing these experiences in our real world and enhancing it making it extraordinary with digital content is the right definition, in my opinion, for augmented reality, the technology and this differs from you know, what is often grouped with it, which is virtual reality, in that virtual reality is a complete simulated environment. It’s a virtual environment where you’re not seeing the real world. That’s the big difference.

Jake:

So I want to touch on a couple of different areas and understand how they relate to augmented reality. First of all holograms, a hologram AR can it be AR?

Tom:

Yeah, a hologram can be AR or it can be VR, depending on where it’s experienced. If you are holding up a smartphone and tapping on the ground via your smartphone screen and placing a hologram, let’s say of me and I’m doing this interview as a hologram. It will look as though I am there in your physical space.

Jake:

And how about 3D?

Tom:

3D content is fundamental to build AR and VR. And this does not mean that you can’t have 2D content within augmented reality and virtual reality. But these are spatial computing technologies. And so the key word there is space and we live in three dimensions. And this is the fundamental shift: this is the opportunity that is at hand to move from 2D technologies like video, photos and gifs to 3D mediums that really allow for us to be present and experience technology in a brand new way.

Jake:

So there’s one buzzword that we can avoid, and that’s metaverse. So there’s a lot of talk about metaverse today. Why don’t we talk for a moment about how AR relates to metaverse?

Tom:

Sure. Yeah, that’s a huge word. So for me, metaverse is like an aha moment. It’s a realization by industry, the tech industry organizations brands that the next iteration of the internet is coming and that it is made up of a full stack of emerging technologies, Blockchain, AI, AR and VR are some of them. And so AR and VR play a role in this grander vision of the metaverse where the internet is changing, and essentially becoming more spatial in nature because of AR and VR in particular. And so for me, this is really a grander vision of us moving towards this next wave of computing. And we’re making some great headway, but there’s going to be a while for us to get to that final destination of the metaverse. In the meantime, we’re going to have metaversal like experiences I think along the way. And we’re seeing this today with you know, a lot of brands focusing on building virtual worlds or building in virtual worlds. So augmented reality and virtual reality play a role in this grander vision of metaverse.

Jake:

That’s interesting. When I think of metaverse, I think of virtual reality. And you just mentioned yourself like brands building virtual worlds, things like that. But you’re saying it’s not really associated with any particular technology or experience. It’s really just a whole slew of technologies and experiences that are different from current internet, am I summarizing correctly what you said?

Tom:

That’s right. But I think like the fundamental shift is your ability to be in technology, rather than be here looking at a screen and engaging with technology. And so in this way, the digital content is more a part of our world rather than the separation that we currently have. That’s really the fundamental shift. And it’s going to need a number of technologies to be able to do this, it’s going to need you know better connectivity. This is where 5G, 6G, Wifi 6C, WiFi 7 come into play. You know, the blockchain plays a major role in identity, and also the handling of virtual assets, avatars, and then AR and VR rely on AI for the computer to sense the environment, sense the people, sense the objects. The AR VR part that we focus on is a little bit more like the GUI of the experience, you know, and how we interact with this next wave of computing, and what we see.

So this is how they all fit together. And what’s great about that is many companies are focusing on web three, NFT’s, blockchain, crypto, AR, VR, 3D. And these are all fundamental pieces of what will come together. And that again, is that vision of the metaverse.

Jake:

GUI, graphical user interface, or UI, just want to clarify that, UI. So you mentioned you started in AI in 2009. I believe. Shockingly, 13 years ago. So AR is not a new concept or new technology. So tell me a little bit about the history of how it’s gotten here. Did it flounder for a while? Is it turning that around? Has it turned it around? What has turned it around?

Tom:

Yeah, I mean, I’m relatively new 13 years, and I would consider knowing that augmented reality has been around I think, for 50 years, really coming out of the military in some ways. In 2009, you got to understand what was happening, just putting it into context wise, many of us focused on augmented reality around that time, the smartphone was now in many people’s hands. And this was a powerful computer that had a camera. And those are ingredients of augmented reality. Tablets were also coming into play, you know, the iPad was something that was debuting. And also you could do augmented reality with desktop computers as well. So the fact that there were more cameras attached to powerful computers really gave, you know, the ingredients necessary to do things in augmented reality, but there was just a lot of friction. And obviously, we’ve grown significantly in processing power displays, cameras, and especially connectivity.

You know fast forward to today, you know, and we’ve now been carrying around the smartphone in our pocket for over a decade and we’re ready to do new things for it. In fact, we’re so ready that just a few years ago, people were putting it in a cardboard box and putting it on their face because they were wanting to do new things with their phone. And so I think the consumer space is ready. Certainly the smartphone has become a more powerful augmented reality machine, which is really great because using a smartphone you can place augmented reality anywhere and the development platforms, the developer community, the designer community, they’re all ramped up and ready to go to create content. So it’s definitely the right time to be engaging and working within augmented reality and utilizing these platforms to create content for your brand.

Jake:

So speaking of the right time, you wrote an excellent piece on LinkedIn recently, which was sort of an annual update on the AR space. And in it, you mentioned that e-marketers states that in 2021, 93.3 million people in the US will have used AR at least once a month. That was a shockingly high number for me, it makes me think that people are using AR and not even realizing they’re doing it. So what’s making up that 93.3 million?

Tom:

I really like what you said about people using AR and not realizing that they’re doing and I think that’s key. I mean, we’re speaking about the industry, we’re using this term augmented reality, for many people are not caught up on the technology or the lingo, they’re caught up in the value, they’re looking for the value from that technology. I think that this is a very realistic number, if you consider that augmented reality can be experienced a number of major ways. Now the first off is in social. So social augmented reality has been in our lives for a couple of years now. And I’m speaking specifically about filters or lenses or effects within Tik Tok, Facebook Messenger, Instagram, Snapchat. And so there’s significant scale within these social networks. And these lenses and filters and effects are front and center.

And here in this sphere, you know, the user is very excited about creating social content, they’re storytelling, and we’re all telling our stories, because of the democratization of the camera and video tools. And what augmented reality is doing within these social spheres is that it is really democratizing special effects. So we’re now able to take all of that storytelling to the next level, just in that sphere alone. I think it’s realistic to understand that there’s a lot of users around the world. But beyond that we have on the web, augmented reality experiences in marketing, advertising, and E commerce. So a lot of virtual try on, a lot of virtual try out. And of course, we also have native applications that are available, especially in gaming. So I think the combination of those three, definitely a great foundation. And we’re just getting started, I think in the use of augmented reality across the board.

Jake:

So you mentioned earlier that AR is becoming exciting for marketers, and I want to go more into that. But as we do that, I want us to touch on misconceptions about AR. I think there’s a lot of misconceptions about AR and I wanted to ask you about a couple of them. One of them is the concept of AR glasses. When a lot of people think of AR I think they’ll think of glasses, because we’ve been presented with glasses as a great way to see AR for many years. Maybe you started with Google Glass. Tell me about that. Is that true? Do you need glasses to experience AR?

Tom:

No, you don’t need glasses to experience AR. I mean, you can experience face effects on the web, just with your desktop computer, for example. But the majority of people in the consumer space are engaging with augmented reality on their smartphone. 3.5 billion iOS and Android smartphones is the estimated reach. And so I think that that’s a great myth to debunk. This is not to say that headsets are not on the horizon. And certainly in the virtual reality space. Unlike AR you do need a headset, because you need to block out reality. Although, you know, in looking at the rumors and the reports from the larger tech giants, it definitely feels as though you know headsets are going to be making their way to the consumer that enable both augmented reality and virtual reality. But for the time being, and for the time moving forward the next couple years the smartphone will be the biggest opportunity for augmented reality. It’s definitely the right time to work within the AR space.

Jake:

So let’s go back to misconceptions. Couple more I want to touch on, number one, Snapchat is often intertwined with the concept of AR. And perhaps when a lot of marketers think about AR they think of Snapchat and if they’re doing AR on Snapchat they’ve got AR covered or doing AR advertising essentially means focusing on your Snapchat strategy. Do you think that’s true? You know how much truth is there to that?

Tom:

I think that social AR is very important within any marketing and advertising strategy. And certainly snap has done a really great job at providing really meaningful augmented reality opportunities for advertisers that they are a camera first company. Certainly social AR is a big opportunity because that is where augmented reality can meet an immediate network. That being said, there are opportunities outside of social AR that also give you you know more freedom more flexibility and allow for you to reach more people outside of those, you know, dedicated social networks.

These opportunities are native app augmented reality and web based augmented reality. And the major difference between those two is one requires the app to be downloaded. The other is just a click of a link away to be able to engage with it. And so if an agency or brand is listening, I think it’s important for them to understand that there are different opportunities within the augmented reality space that are now available to them for advertising and marketing. And certainly, you know, on the 8th Wall side being a web based augmented reality development platform, we’ve already seen over 1000 commercial web AR experiences for blue chip brands across industry verticals, these are top brands, many of them coming back with multiple campaigns, or you know, evergreen integrations on the web, leveraging the browser for augmented reality. And so I would urge folks to really consider expanding their view and expanding the initiatives that they’re doing in AR, if they have not yet doubled in that.

Jake:

I want to get back to those thousand experiences and ask you about some of your favorites. But I just want to close the loop here. And one other misconception. I fear that marketers think of AR as a very expensive thing to get into, in the sense that assets are very expensive to create. Can you talk about that for a moment?

Tom:

Yeah, I understand that. Again, going back to some of the conversation that we had around social and web in particular, this is not app development. So I think that’s the first thing. So you do not need a game budget, you know, to be able to get into augmented reality is certainly augmented reality sings when you use 3D content. And so engaging 3D designers and engaging developers that understand how to work with 3D is something that really can take an augmented reality experience to the next level. Often brands have 3D, whether it’s through the creation of their product, and they have 3D inventory of their product. I’ve been hearing quite pleasantly that brands have been growing their 3D inventory. And that I think, is like really critical for the use in spatial computing AR and VR and 3D across the board.

But with augmented reality, you can also use 2D elements as well. And so for example, Image Target technology, where you point your phone at an image in let’s say, a magazine, can allow for the user while looking through the phone to see that page come to life with video. And so that has been done time and time again. And it feels very magical in many ways. In addition, there are 3D marketplaces that could allow for you to very cost effectively grab the assets that you need in order to create, you know, 3D scenes. So yeah, I think this is a good myth to debunk. It certainly is not cost prohibitive to get into augmented reality.

Jake:

I want to get a little bit more into advertising using AR. First of all, how did we get to the point where AR is right for advertising today? How has AR been used in the past? And how is that evolving to the point where it’s relevant for advertising today?

Tom:

Well, I think advertisers and marketers are always some of the first to use emerging technology, because, you know, we’re looking for ways to be able to cut through the noise and engage users in brand new ways. And so if you look back at previous waves with social and mobile, and local. And so I’m not surprised that advertisers are marketers are also some of the first to really pick up augmented reality tools. I would say that advertisers and marketers have been seeing ROI on the use of augmented reality in social, on the web. And these proof points have caused them to come back.

Users are engaging, they’re spending significant dwell time in particular, which is very intrinsic to an augmented reality experience where a user is expected to become a participant with your branded experience, or your branded content very different than watching a video or seeing a photo or reading an article. Instead, they are in the experience, they are an active participant. So that’s a big shift there. And consumers are also today, you know, demanding these types of experiences. I think the combination of that is why the advertisers are on board and they’re coming back for more.

Jake:

You mentioned that AR is about being part of the experience. So it makes me think we should talk a little bit about what things are like from the perspective of a consumer, let’s say you are within media, whether it’s an app or a website or a mobile website, and you’re scrolling down to see an ad like what does that experience like, as a consumer to be part of an ARF?

Tom:

Well, you know, thanks to our partnership between 8th Wall and Ericsson Emodo. We now have embeddable AR ad units that can run through your publisher network. And so as a user, as I scroll down, I am engaged with an ad that possibly could start with 3D. So let’s say it’s like a chair and this is all about selling that chair, just to keep things simple. So as I’m scrolling down in the ad unit, I’m able to customize that chair by using buttons, you know, changing the color of the chair, swivel it around, see it from different angles. And then I’m given an option to tap on a button in order to put that chair into my room so that I can see it beside other furniture, I can walk around it again, I can still configure that chair, maybe change the legs, change the color of the chair, take a picture of it beside my couch.

And so in this way, I’m immediately engaged, I’m able to see product from a different perspective. Again, I’m an active participant, which is really critical, I think here. And then what’s really great is when the 3D object gets put into the space, and intrinsically becomes personal, because now you’re using my space. And I’m seeing my couch beside this chair. And I think this is like fundamental with augmented reality advertising is that it really enables that personal connection to happen very quickly with your brand, and essentially moves that user through the funnel very quickly as well, because it’s as if they have that chair in their room already. And so with web based augmented reality technology, you can also overlay 2D elements like buttons, call to actions, for example. And so once you’re in that air experience, and you’re seeing that chair in your space, you’re tapped by, and you’re brought to the product page, and then we see that lift in sales.

Jake:

That’s really interesting to me, I’d love to touch on that for a moment about what we mean by the experience economy and how it’s different from maybe what the economy was before.

Tom:

Well, for me, my understanding of the experience economy is that there is a prioritization on consumer spend on experiences over physical goods. So being very comfortable with leasing things, it’s kind of built off of the sharing economy, and in many ways where there’s less of a prioritization on having to own things and more of a prioritization on experiencing things at mass. So remote work, allowing for you to work in different destinations. And working in Bali, working in Europe, if you’re from the US being able to rent out different homes and different areas as part of your vacation. All of this is bottled up and mixed in with the experience economy, again, by consumer prioritizing their spend on experiences over you know, actually, the physical consumption of goods.

Jake:

So the experience economy is really something that’s happening throughout the economy with perhaps the millennial generation prioritizing experiences. And AR is a good match for that. Because it’s not just about learning about a product, for instance, it’s about personally experiencing it in your own world.

Tom:

That’s dead on. I mean, you often cannot use any other word to describe augmented reality content, than experience, just as it is the word that we use to describe augmented reality content. And I think, again, that really makes this the medium for the experience economy, right time, right technology.

Jake:

Also, the fact that you use the word experience made me think about, do we need to think about AR advertising in a different way? Maybe conflating it with a word advertising is limiting, in what AR can mean for marketers.

Tom:

Yeah, I think that sounds right to me, certainly, this is a fundamental shift in how you can engage with a user. Again, you’re making use of space, you’re making use of people’s faces in some ways. And so there’s a relationship here, that’s very different than, you know, typical photos, GIFs, videos, or even playable content, like games, it again, makes the user a very active participant. And if we think about the types of marketing where those ingredients are also at play, it is experiential marketing.

The big key thing here is with technology, as always, it really allows for the acceleration and distribution of those experiences where you know before you may have spent a lot of budget and time in creating an installation at a mall, one mall, and then you know, maybe touring that installation to different malls and getting, you know, thousands of people at a time where now you can create a digitized experience using augmented reality. And you can advertise that via embeddable AR ads. And you can reach millions of people in that experience. And you know that I think is like a real big opportunity.

Jake:

And so if AR advertising is like half experiential marketing and half advertising, then it also makes me wonder how we measure AR advertising. And you started to touch on this when you were describing the experience of AR advertising, things like remembering experiences and how important it is for particularly millennials to remember experiences that they’ve invested in. And are the metrics that we should use different from what we do with typical advertising, and maybe borrow some from experiential marketing.

Tom:

Yeah, those are really good questions. I think today we use the metrics that we’re using today, because that is going to allow for us to better understand the value of augmented reality. So with ads, you know, that is the click in, and also the dwell time and you know, the conversion rate, the demonstrable lift in sales. And, you know, we have on the 8th Wall side, thanks to our amazing, you know, agency and creative development studio partners, a wealth of case studies and proof points along that marketing funnel. So certainly, I love for the listeners to know that you can use the metrics and the measurement that you’re using today to really demonstrate value in your augmented reality campaigns.

But I think, you know, as more and more advertisers and marketers continue to use and succeed with augmented reality, and as these new embeddable AR ad formats and display ads shift from 2D to 3D, I think we’re going to find ourselves in need, as you pointed out of new, you know, metrics. And certainly right now, some of those metrics that we’re seeing as hero metrics revolve around engagement time, or dwell time, and are really rooted in the experience. And I wouldn’t be surprised if you know, in a couple of years, maybe a new ad metric appears around experience, like cost per experience in some way. And the great thing on the web in particular, is that you can use your existing analytics system. And so if you have a specific analytics system that you’re using for your non augmented reality, branded experiences, and branded AR ads, you can engage with that same system and incorporate those metrics into the dashboards and reports that you’re providing to your client.

Jake:

I love that, by the way, the cost per experience, I love that. Also, I wonder about traditional brand metrics, things like recall, ad recall and message association, particularly if you’ve personally experienced a product, how much do you associate a message about that product with that product after experiencing it?

Tom:

Yeah, I love all those. I think all those apply. You know, I wrote a blog post not too long ago around, you know, some of the things that advertisers and marketers may want to consider when they are launching an augmented reality campaign. And those were certainly some of the things that I raised up again, just like thinking about what would be some of the questions that someone would ask of you when you returned from a trip, when you returned from an experience, you know, and that really is and where did you go? How long were you there? What did you see? What did you do? What do you remember? Like all of these things apply. And I think that these are really compelling, measurable opportunities for advertisers, when this is all centered around branded IP.

Jake:

So we talked about what the consumer experience is with AR advertising, particularly embedded AR, as you mentioned earlier, we also talked about how to measure AR advertising when you run it. So it feels to me like now would be a great time to dive into some of those thousand branded experiences that you’ve been through in your time at 8th Wall. Can you maybe point us out to a few of them? What are your favorite marketing executions? And can you talk about the success of those marketing executions?

Tom:

Sure, I’d love to raise up some examples. I would say they’re all my favorite, but I’m going to talk about ones that I have some data for. So I can sprinkle that in along the way. I’m going to start at the bottom of funnel first, which is all around, you know lift in sales. And we talked a lot about advertising and marketing. But web based augmented reality is also being integrated in e-commerce to facilitate try before you buy. And this is a really compelling augmented reality use case, I suspect that all e-commerce will be making use of this in the next couple of years. What’s great about web based augmented reality is that you can integrate this technology into your existing e-commerce site that’s already online, including integrating you know existing CMS and payment systems. And so saatchiart.com which is a leading online art retailer worked with Rock Paper Reality, and what they did was integrate web AR powered by 8th Wall to allow for this view in my room experience for you know, the consumers could select a piece of art, and it is powering over a million works of art on the site. And they’re able to place this in their space, place it on the wall in order to help with their buying decision.

So this really is very assistive in the buying decision, increases confidence in buying. And in fact, saatchi art reported that when consumers used the web AR feature, they were four times more likely to purchase. And when they did use the Web AR view in my room feature they actually purchased on average 17% more than those that did not so very demonstrably results in the use of augmented reality. And we’ve also heard stories in the use of augmented reality with e-commerce and in the reduction of returns as well. So another really great reason to include this. So that’s a really good bottom of funnel, you know.

Jake:

I want to touch on that just for a moment. That potting down on returns strikes me as interesting so maybe it’s like the more somebody has engaged with a product ahead of time the less likely there is of a negative surprise when they have the product.

Tom:

Listen, that’s absolutely right. I think what augmented reality facilitates is getting that product in the house for a lot of E-commerce experiences, or getting that product on my face for others, or on my body with body tracking. And so this really allows for that fitting room experience of its fashion or that mirror experience of its beauty. Or for the case of saatchi art, which is art. It’s like you brought that art home and you’re able to place it in different places in your home. But you’re actually using augmented reality, and you’re still on that online destination. And so this is what’s happening here is that we’re really like closing that gap and digitizing those experiences and integrating web based augmented reality into e-commerce sites facilitates that.

Jake:

So you started off at the bottom of the funnel, sounded like you were gonna move towards the top of the funnel.

Tom:

Yeah, I was gonna move into the middle of funnel and talk a little bit about conversion, moving into a different type of augmented reality experience, which is face effects. And so, Dodgers Pale Ale from Golden Road brewing created a Dodgers base effect for the 2020 Dodgers win. If you recall, the LA Dodgers win. And this was created by Aircar.

Jake:

I’m actually a lifelong LA Dodgers fan.

Tom:

Oh great! Well look, I picked the right one for us here to talk. You know what’s interesting here talking about how users or consumers find AR, they took out a full page ad in the LA Times and this full page ad had a QR code, this QR code could be scanned, which brought the consumer to the experience in the browser, again, they were able to see, you know, the Dodgers base effect that celebrated the Dodgers when there was virtual confetti. But the big thing that I want to focus on here is while that consumer is having fun, they can take pictures for social for example, there was at the top right hand of the screen in the corner, a call to action for a rebate. And the Golden Road brewing company reported that that button had an 18% conversion rate within that experience to that rebate, which is quite significant.

It was distributed both on social and through that large print ad. And it led to just demonstrable results and middle of funnel, which you know, eventually, you know, leads to sales. And so I think that’s another good example. And then, you know, we talked a lot about dwell time and reach when it comes to augmented reality. And certainly we’re seeing that across the board. In fact, for Sony Pictures, the Jumanji movie launch, you know, trigger works with Sony Pictures to create this 3D experience in the world where you can place a map of the world in your space is the Jumanji world in your space, they integrated voice into this experience, you could talk to the map, tell the map where you want to go. And consumers spend on average five minutes in that experience, which is, you know, phenomenal. And just like the Dodgers example I gave there were no inexperienced calls to action to purchase movies from that time. And so these are just like a few of the thousand plus experiences that brands again, across industry verticals are using augmented reality with.

Jake:

You mentioned the term dwell time. I think that’s an important one to dwell on, shall we say? Because I think another way to think about that is attention. And these days in the marketing industry is a lot of attention, shall we say, on the concept of attention and attention metrics. There’s a lot of focus on paying attention to attention metrics, and tracking that as a key performance indicator for marketing. And dwell time is an excellent form of attention metric. And we at Emodo ourselves one of the first campaigns that we ran with AR generated over three minutes dwell time. So people who went into the AR experience they stayed an average of over three minutes which is just completely unheard of, in any other form of advertising. I think it’s an excellent way to drive to these attention metrics that we talked about.

Tom:

Yeah, I think that’s a good point. And again, we’re seeing time and time again, that brands and partners like yourself are raising dwell time, sometimes called engagement time, but that attention metric up as a hero for augmented reality. And this is really important for all those reasons that you mentioned. So the combination of getting people’s attention, but not just getting their attention, but also personalizing the experience by placing it on their face or in their space, really, you know, results in a very interactive, meaningful branded experience.

Jake:

Do you talk just then about putting it on your face or in your space, I believe, and that’s all about personalization. And personalization is really important today and I know earlier you mentioned that AR ads can use a lot of the same metrics that traditional ads but the reality is in advertising measurement is getting harder because of changes in the privacy world and in identity. And one of the things that I think is powerful about AR advertising is it allows for tremendous level of personalization, even without the traditional forms of data that we’ve used as marketers to personalize ads, because it leverages what I call self personalization. It works well in an environment in which there’s less data to personalize ads ahead of time.

Tom:

Yeah, I agree. Just like how augmented reality is coming at the right time for the experience economy, I think it’s also coming at the right time with a see change in advertiser, and advertisements, especially with you know changes in cookies and user identification. And I love that term self personalization, it’s exactly what’s happening. And frankly, it’s going to get more and more robust and contextual. You know, augmented reality is just getting started. And as sensor data gets more complex, and spatial data becomes more available, we’re going to see even more personal meaningful, using kind of air quotes, it will feel more real AR. And that’s exciting.

Jake:

So if you’re a marketer, and you want to get into AR, what do you need to do from a concrete steps basis? Like what do I need to do today to get started with AR?

Tom:

Well, the first thing you do is you should understand like what goal you’re trying to achieve with augmented reality, because by having that clear in your mind, you’re going to be able to measure it and find that augmented reality is going to help you succeed within that campaign. So I think that is, first and foremost, the first step. But the good news is that once you’ve done that, I think looking at your demographic, you have a wealth of opportunities out there to engage developers, creators and platforms. Certainly the web offers the widest reach without friction of having to download an app or use an app entirely. And as we pointed out, in other places in the podcast, the tools are there, the creator developer community is there so that talent is there, you may already have the content to make a meaningful augmented reality experience. But if not, you know, 3D content creation, it has changed dramatically. And then knowing your goals and understanding that the consumer is very acclimated and eager to engage with augmented reality, you’re well set up for success.

Jake:

Tom, are there any innovations that are happening in the marketplace these days to drive down the cost of creating assets for AR, or increase the accessibility for marketers?

Tom:

Sure, a lot of augmented reality experiences use 3D content. And the good news is that there are a wealth of new opportunities to either create or purchase 3D content, there are a number of 3D content marketplaces out there. And as well, your smartphone now has a LIDAR sensor, which is a depth sensor. And it’s become an extremely powerful way to be able to create 3D content with objects and even people in your space. And there’s a number of applications that help facilitate that. So I think we’re just getting started with both really make 3D content availability a lot easier. And therefore, you know you can use that 3D content in augmented reality experiences.

Jake:

That’s amazing to me to think that there are millions of people right now with 3D cameras in their pockets. And they may not even realize it. I didn’t realize it, I want to try that, I want to try to create a 3D object with my phone.

Tom:

You can do it today, if you have a newer iPhone, although I will say I’ve been very impressed with some of the applications making use of machine learning and artificial intelligence to enable scanning with mobile RGB cameras, which just means regular cameras.

Jake:

So it sounds like maybe as a first step is just for fun, like use your phone, use one of these apps or if you’ve got an iPhone Pro 13, use the LIDAR capabilities of that phone just to create some 3D objects and just get a sense for what they look and feel like and feel powerful that it’s pretty easy to do.

Tom:

Exactly, exactly.

Jake:

So I want to ask you a quick, fast five, which is how we end every episode. What’s the best depiction and the worst depiction of AR in movies or pop culture?

Tom:

I really like the depiction of augmented reality and Ryan Reynolds new movie, which does use a pair of glasses where when you put that pair of glasses on, you’re able to see digital content in the real world. Ironically enough, I know that minority report comes up a lot when augmented reality is a point of conversation. And I love Minority Report. It was ahead of its time and a lot of the user experience and thinking has actually been put into place in many ways and wearable technology. But for me, Minority Report was more about a wearable technology than it was about augmented reality and the use of augmented reality to put digital content in your space.

Jake:

Awesome. You mentioned earlier, we talked about the metaverse. Do you have a metaverse avatar?

Tom:

I have avatars. I have a Bitmoji avatar. I have a ready player me avatar, which is a really great startup to keep an eye on. Their avatars are said to be your passport to the metaverse.

Jake:

Do you have AR glasses? And how often or how do you use them?

Tom:

I have a lot of augmented reality and virtual reality devices. And just a lot of wearables, I’ve been purchasing wearables, you know, since 2013. I have two pairs of Google Glass. I have you know, other devices that are maybe not around anymore. I use my virtual reality headset, my quest two quite often.

Jake:

I have to ask, what do you use the quest two for most often? What’s your favorite use case?

Tom:

Oh my gosh, my favorite game right now is Clash With a Chef where I’m literally just like getting orders of food, and I have to satisfy those orders of food as a lined chef. I spend hours in it, I don’t know, I find it meditative to like make sushi and flip burgers.

Jake:

What’s your favorite AR experience that you’ve had?

Tom:

One of my favorite experiences has been the Pizza Hut experience. That troll of North America built which turned the top of the pizza box into a 3D playable game of Pac Man. You know, I was born in 1978. I remember when you would go to Pizza Hut and play Pac Man on those game consoles. And so it was really cool to see my smartphone turn that pizza box that came to my door into a Pac Man console. So that one stuck.

Jake:

Do you ever see that documentary on Netflix about the history of classic computer games? There was an episode they went to the history of Pac Man and I was shocked and I’ll never forget to learn that Miss Pac Man was not a offshoot of Batman, it was a complete rip off by a different company that was just their way to get around the trademark.

Tom:

I remember seeing that one, that was a really cool documentary.

Jake:

And where’s AR going next, like what’s the trajectory and other uses of AR in the future?

Tom:

AR is starting to become just as common of a technology that you interact with as the technologies that you’re used to today. And you know, the smartphone plays a major role in augmented reality today, will continue to play a major role in the years to come. But I fully expect that we will also be engaging with augmented reality with headsets, whether they’re just dedicated to your living room, or you’re engaging with them as tools at work, or eventually, you know, pair of glasses or even contact lenses in the far future that allow for you to enhance your world and make it extremely extraordinary.

Jake:

So you mentioned this earlier, we have a partnership between Emodo and 8th Wall. With it we make available to marketers scalable AR advertising campaigns, including the first embeddable AR ads, in which the AR experience is within the ad unit. So we’re really excited to be working with 8th Wall, and Tom Emrich VP product at 8th Wall. Thank you for joining us today.

Tom:

Thanks for having me. Here we go.

Jake:

Augmented reality ads bring a whole new dimension of experiential engagement to advertising. And as the industry is looking for fresh, compelling, engaging, creative, the timing couldn’t be better. If you’re looking for ways to personalize ad experiences in this age of privacy, AR ads may offer the most personalized and measurable experiences of all. Oh, and there’s one other thing that makes AR ad creative, pretty unique. Consumers really like AR ads. Last year, the team here at Emodo conducted a pretty in depth study about consumer perspectives on augmented reality advertising. And we introduced consumers to augmented reality ads. 70% of the participants said they’d like to see more AR ads, even more said AR ads would be more likely to capture their attention than other ad formats. I mean, what was the last time consumer said yeah, give me more of those ads.

You know, how we are always talking about the big ideas in marketing and the marketing of big ideas. Well on the next episode of FIVE, we’re going to be looking at the marketing of the big idea, a campaign so impactful, it’s breathed new life into an entire island and changed the lives of its residents. I’d like to thank my guest Tom Emrich, VP of product at 8th Wall. Great guest, great conversation. Thank you, Tom. A quick shout out here, shortly after Tom and I met for this interview, 8th Wall had a pretty big announcement. They’re being acquired by Niantic, the augmented reality platform behind Pokemon Go. So I wanted to take a second here to congratulate Tom and the great team over there at 8th Wall. It’s a pretty big deal. If you’d like to learn more about 8th Wall, visit their site at 8thwall.com with the numeral eight.

If you’d like to know more about Emodo or the Emodo Institute or the FIVE podcast, visit our site at emodo.com/five or check out the show notes for this episode. And if you like the show, please write us a comment and give us a rating on your favorite podcast listening platform. Especially if you listen on Apple podcasts or Spotify. We’d appreciate that very much it helps more people discover the podcast. For now I gotta confess for some reason I can’t stop thinking about pizza and Pac Man. Way to capture my attention, Tom. Thanks for joining us. The FIVE podcast is presented by Ericsson Emodo and the Emodo Institute and features original music by Dyaphonic and the Small Town Symphonette. Original episode art is by Chris Kosek. This episode was edited by Justin Newton and produced by Robert Haskitt, Liz Wynnemer and me, I’m Jake Moskowitz.

Additional episode resources:

  • Shortly after this episode was produced, 8th Wall was acquired by Niantic.
  • Learn more about Emodo and the Emodo Institute: EmodoInc.com
  • Guest Tom Emrich’s profile
  • Guest company: 8th Wall
  • Guest company’s parent company: Niantic

These AR experiences were described in the episode. All three were Powered by 8th Wall: