Macy's tests Verizon Media's new immersive AR ads

Brief:

Verizon Media, the advertising and content unit of the phone company, signed up Macy's for its latest augmented reality (AR) ad formats, per an announcement shared with Mobile Marketer. Verizon expanded its full-screen ad format, Moments, with AR technology that overlays digital imagery on the real surroundings seen through a smartphone camera.
Verizon's new AR features let advertisers create immersive interactive content for customers who want to evaluate and test virtual versions of products before buying them. Moments also now supports the front-facing camera to show AR imagery like face filters, a popular feature among cosmetics marketers that offer virtual try-on's of makeup.
The rollout follows Verizon Media's debut of AR on Yahoo Mail, which boosted engagement metrics such as dwell times that average more than 60 seconds, per the company's internal data. Verizon Media in 2017 introduced Moments as a full-screen native ad format among its mobile apps and web properties, which include Yahoo, AOL, HuffPost and TechCrunch.

Insight:

Verizon Media and Macy's haven't said how the department store chain will use the updated Moments format to showcase AR experiences on mobile devices. However, the telecom company is introducing AR as U.S. advertisers are forecast to spend $44 billion among the broader category of native advertising this year, per eMarketer data cited by Verizon Media. Its AR formats include extended reality (XR) experiences — in AR and virtual reality (VR) — that combine 3D artistry from its in-house creative shop RYOT Studio and the reach of its content platforms.

Macy's has made mobile and digital campaigns a key part of its marketing strategy at a time when its physical retail is struggling. The chain's back-to-school promotion included its first shoppable commercials on Snapchat and a video-sharing challenge on TikTok. The department store's "All Brand New" campaign included digital and TV spots aimed at celebrating kids' individuality and self-expression. In May, Macy's launched a mobile-based experiential campaign that urged people to use their phones at summer gathering places across the country. Pop-up stations featured Pinterest Pincodes that visitors could scan to unlock to a board featuring outfits curated for each location.

The retail giant reported a dip in Q2 revenue from a year earlier, blaming a fashion miss in women's apparel, slow sales of warm-weather clothing and a decline in international tourism that forced markdowns. These digital efforts look to engage with mobile-first consumers on the platforms they use to push back against headwinds that it faces as a retailer.

AR is a popular features on social media apps like Snapchat, which claims that 70% of its users play with its AR Lenses every day. AR technology is still in the early stages of being integrated with shopping, with 5% of people saying they have used AR to shop, per a survey by researcher GfK. However, 25% of surveyed consumers said they'll likely use the technology for shopping in the next year, which may give Macy's an opportunity to integrate AR ads with direct sales.