Augmented Reality: What Should Businesses Expect From This New Tech?

The concept of Augmented Reality, or overlaying the real world with text or images seen via a mobile phone’s camera or a Web cam on a PC, has gained a lot of attention in recent months. Big tech companies, from IBM to Microsoft to Nokia are developing mobile-phone software and services in this space. Major retailers from Best Buy to Wal-Mart are using AR tech for the PC in their marketing campaigns. And numerous start-ups are developing cool applications that allow anyone to create tags for the real world. Yes: anyone can tag physical buildings or landmarks with informative text, like that found on a traditional Web page. The idea is to allow people to point their phones at, say, the Eiffel Tower, and see stats on when it was built or how tall it is, on their phone’s camera, in real time, instantly.

The promise of Augmented Reality has been documented recently in The New York Times and The Economist, but coverage has mainly looked at AR as a cool new phenomenon and not at the benefits and costs to businesses. Is this more than a fad that companies might waste money on? Is jumping on the AR bandwagon now good for positioning a brand as forward thinking or at the very least trendy? How much does it cost a business to create an AR marketing campaign or service?

For insight, I called Claire Boonstra, co-founder of Amsterdam-based Layar, a start-up that created an AR campaign for ING this summer. It allowed users to find ATMs in Amsterdam by searching through their phone camera lenses and pointing at the flesh-and-blood around them. Bank info would pop up.

"ING told us they were very happy with it,” Boonstra told me.

“But there were some lessons learned. Some people said they thought it was really cool, but were surprised all it could do was just ask for an ATM,” she continued. “Some users said it’s just not a natural behavior to grab your phone and look for something around you to get information.”

I asked her how expensive it is to create an AR world-browser via Layar. The software app is free. And the expense is basically hiring people to plug in their database of information into the app, which will use a phone's GPS system to locate the user and then coordinate the info with what he or she sees on a phone's camera screen.

“It’s relatively inexpensive, and we’ve had some people tell us they’ve created a layar [as the browser information is called] in only an hour, ” Boonstra said.

The company can also create custom layars for companies, as they did for ING. “We’re talking thousands of euros, into the ten thousands," Boonstra said, in terms of their fees. "It’s nowhere where near the price of a TV advertising campaign.”

Google’s Android operating system -- getting attention today because of the Motorola Cliq announcement, which runs on Android -- supports AR, although the iPhone does not…yet. But with Nokia, Microsoft, and IBM working on their own AR software and services, AR seems to be closer to widespread adoption than merely a blue-sky, sci-fi concept. As for Layar's new clients, Boonstra wouldn’t name names, but said that “Big agencies, mobile-phone operators, manufacturers, VCs, very many brands, communities, and software developers have been calling” in recent weeks to partner with the start-up. “We don’t need to do any cold calls,” she said.

To see Layar's AR technology in action, check out the video below.

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