Mixed reality is the next shiny thing for marketers, but some remain cautious

Fifteen years ago, few people could have predicted the change smartphones would bring to advertising — going from novelty to necessity and hastening the decline of PCs and linear TV while sparking the rise of social media and streaming entertainment.

Now, as smartphone sales plateau, a new crop of augmented and mixed-reality (AR and MR) devices could once again revolutionize how we experience technology and reach engaged audiences. Some top marketers, however, are not quite convinced — at least, not yet.

Apple announced last week that it will begin selling the Vision Pro headset at the start of February, and the device is already predicted to sell out. During the 2024 Consumer Electronics Showcase (CES), Sony announced it’s building an MR headset slated to launch later this year — as is, reportedly, Samsung and Google’s.

Early adopters can already choose from AR and MR devices from Meta and buzzy upstarts like XREAL, Rabbit, and Humane. Speaking of the Meta Ray-Ban smart glasses, Niantic CEO John Hanke told the Financial Times, “I think it surprised a lot of people in terms of how well that was received. I think this version is the right device at the right time.”

These devices enable “ambient” or “spatial” computing, whereby physical and digital worlds converge and our surroundings become our screens. AR glasses, for example, overlay digital content on the real world, and MR devices let users interact with content as if it were part of their surroundings.

For all the promise of AR and MR, marketers who spoke to The Current remained skeptical. “For me, it’s very much ‘wait and see.’ I’m not sold that it is quite where it needs to be for consumers to buy into it,” Josh Campo, CEO at Razorfish, told The Current during CES 2024. “We need to see some kind of adoption rates before we can say that this is a channel we should be doubling down on.”

From curiosities to critical strategies

Lingering economic uncertainty may play a role in marketers’ hesitancy toward MR, unlike the excitement that the industry bestowed upon the metaverse two years ago.

“Right now, marketers are all playing it very safe because of what’s going on in the world,” Maggie Malek, president of North America at Crispin Porter + Bogusky, tells The Current. “If this stuff starts to ramp up more, we [will have] more conversations with clients about advertising in these spaces [and] partnering with these organizations.”

But just as mobile, social media, and location-based ads went from mere curiosities to critical strategies in marketers’ toolkits, the implications of this new crop of gadgets could be profound. Marketers can now tap in to MR experiences with haptic feedback and create hyper-personalized, hyper-local contextual ads.

“The post-smartphone era of advertising, where our surroundings effectively become interactive screens, could lead to a transformative shift in how ads are created, distributed, and interacted with,” says Ellie Bamford, chief strategy officer at Wunderman Thompson North America.

“One significant opportunity lies in transforming the pure ‘spectator’ role of the ad viewer into highly engaging and interactive ad experiences,” adds Jaime Gonzalo, vice president of Huawei Mobile Services Europe. “MR allows for storytelling and brand interaction in three-dimensional spaces, offering a more compelling narrative than traditional ‘flat’ ads.”

As tech firms big and small race to make these next-gen devices appealing and affordable to the masses, we could soon witness advertising experiences like walking through a shopping mall and seeing personalized ads or having a virtual shopping assistant in our living room.

“With advancements in location-based services, ads could become even more hyper-local,” says Bamford. “Walking past a store in the real or digital world could trigger personalized discounts or offers directly to your wearable device, depending on your shopping history or preferences.”

Less screen time, more quality experiences

At CES this year, the flurry of MR product launches and commitment from big tech names like Sony has made some technologists more optimistic than marketers about the direction of the space.

“It’s further evidence that the entire industry is moving in the direction of spatial computing, giving resources to creators to create things in this virtual space,” Michael Miraflor, chief brand officer at venture capital firm Hannah Grey, told The Current during CES 2024.

“Developers are [...] eventually going to want to create things that people want, and people want to be entertained,” continued Miraflor. “They want to be productive. And they want to experience things that they couldn’t experience on devices before.”

Amid this uncertainty, some companies are already preparing for the future by tapping in to technology that’s already here and working. Walmart and Qualcomm are reimagining the retail experience with smart shopping carts, video rails on shelves, and biometrics at checkout. This could further boost the retail media segment of the industry, projected to surpass TV spend by 2028, by providing yet more opportunities to engage with shoppers.

Sensory advertising, like Starbucks’ activation in London last year that featured sound effects of ice shaking and scent dispensers, could also be amplified by the rise of wearable tech — from smartwatches to fitness rings — which is projected to see double-digit growth for the next five years.

“The focus should be on creating meaningful interactions that respect the user’s desire for less screen time and more quality experiences,” says Gonzalo. “This could involve more contextual and situational advertising that feels like a natural part of the user’s environment, rather than an interruption.”