April 4, 2023
AREYES analysis behind ROI of AR integration process and reasons why AR works 10x times better than traditional media advertising
One of the most common methods of measuring the value of advertising is by using various metrics such as CPM, CPV, and many others. This article will discuss these metrics and explain how approaches from traditional advertising can be used in calulating the value of AR integrated into marketing campaigns in dollar terms.
Firstly, in the Social-AR industry, the same laws apply as in traditional advertising. However, there is one significant advantage: one effect can combine several types of integrations at once: static, video, immersive, as well as user-generated content.
We’ve noticed that no one is highlighting the effectiveness of AR advertising across the internet, so we at AREYES wanted to offer our framework for evaluating the value campaign that includes AR experience.
Many metrics are used in the advertising industry to measure the effectiveness of advertising campaigns. Here are some of the most common:
These metrics help advertisers and marketers evaluate their advertising effectiveness and determine what changes are necessary to improve their strategy.
To calculate the value of AR integrations in dollar terms, we need to understand how to calculate these parameters.
Since AR integration is a unique phenomenon that includes both views and interaction with the user, we will evaluate these indicators separately and then sum up the effect.
To calculate the dollar equivalent, we are interested in:
The remaining metrics help analyze the depth and quality of interaction and, thus, require close attention. However, their detailed analysis should be done in a separate article.
The average CPM for Instagram Stories in 2022-2023, according to adsuremarket.com is $5 per 1000 views or $6.7 per 1000 views, according to k6agency.com.
The average UGC for Instagram in 2022-2023, according to brandsmeetcreators.com is $150-$512, depending on the number of followers of the person reposting (1k – +100k).
The median is $150.
Let’s try to estimate the value based on the most modest parameters for one of the AR effects, which, in our subjective opinion, has quite average indicators:
Number of followers on the account: 10k+
CPM = 507.6 * 6.7 = $3400
UGC = $150 x 3500 = $525,000
Total = $528,400
The ROI of such advertising integration exceeds 15000%.
And this is a rather conservative estimate. The effectiveness of well-organized AR creatives can reach 10000%-30000% relative to the investment.
This is achieved by using a well-thought-out strategy for integrating AR effects, involving influencers in spreading the effect and turn on additional AR advertising support. Reach can grow by 3x or even 10x, while additional costs will be no more than 25-30% of the effect development budget.
To better understand the value of AR integration, let’s compare this statistic with Super Bowl advertising. The Super Bowl is the largest platform for advertising, reaching 200 million people, but it can cost up to 7 million dollars for a 30-second ad in 2022 according to public data.
The average time a user spends on a story is 15-30 seconds, and a well-executed AR effect can reach millions or in some cases, tens of millions of people. Based on this model, such coverage is equivalent to an investment of $200,000 – $400,000 in advertising.
Moreover, Zac Fields, SVP, graphic technology and integration, Fox Sports said that augmented reality will also be a big part of the Super Bowl LVII pregame.
One of the main rules of marketing is to give the user what they want. What do brands and their marketing departments want? Quality integrations and large audience reach.
But what does the end user want?
This is the most important point – the user wants two things:
Social approval (views, likes, comments)
A well thought-out creative solution satisfies at least one of these needs. Thus, we have a connection: the user satisfies their need -> gets engaged, and spreads the experience through reposts -> creates reach for the brand.
This mechanism leads to the desired result, and we have a win-win situation! At AREYES we want to draw the attention of brands, agencies and developers to this thesis, as it forms the value of efficient AR integration.
Currently, the integration with advanced AR experience in Social Media are mainly used by large brands with large advertising budgets. But there are several reasons why this has happened and several things that will change quite soon:
What should change:
The trend curve is in front of you: all technological innovations develop along this curve.
To understand it is pretty simple:
The social-AR slowly but surely moving to the fifth, final stage threshold. What does this mean? Meaning social-AR will soon be firmly established as a communication method and will become a standard tool for marketers alongside photo/video/text ads and social media communication.