3 reasons why mobile AR developers should focus on ads and not in-app purchases

Apple ARKit and Google’s ARCore apps have access to hundreds of millions of consumers since both platforms offer high-end AR experiences with hardware that’s already in most people’s pockets. Roughly 2K apps already support ARKit, and the number of unique users across ARKit apps has reached over 59M. Developers are seeing potential in the space after watching the groundbreaking success of Pokémon GO, which has generated over $2B worth of in-app purchases since its launch in July 2016. And there certainly is potential: AR mobile games are on track to earn $1.7B this year.

 

This does not mean AR app developers can expect to make money hand over fist via in-app purchases. In the games space, the winners we see emerging are titles with major marketing budgets and recognizable brands like The Walking Dead and Harry Potter. Furthermore, spending on non-game apps will be only a quarter of spending on games this year. Despite these barriers, here is why developers should not write off mobile AR but instead harness ads and branded content.

Pokémon GO earned the lion’s share of mobile AR revenue in 2017.

 

  1. AR developers will have trouble engaging consumers for long enough to get them to pay.

People do not want to spend an hour holding a phone at arm’s length. When using mobile AR apps, 35% of the audience has average sessions shorter than 10 minutes compared to only 9% of VR users. Users will not want to pay for content like lengthy AR videos. Pokémon GO works because it is ‘glanceable’ — players do not use the AR feature for more than a few seconds at a time.

 

  1. Software developers can capitalize on the fact that brands are itching to create mobile AR content.

Branded AR apps are novel enough to generate press and grab consumers’ attention. IKEA was one of the notable companies to jump into mobile AR when it released IKEA Place on iOS in 2017. The app allows users to place virtual furniture in real-life spaces. Similarly, Sony recently launched the God of War | Mimir’s Vision app, giving fans of the God of War titles the ability to lay out a version of an in-game map on top of real-world surfaces. In the near future, AR developers can count on brands needing their expertise to launch AR apps.

 

  1. Mobile AR ads will become ubiquitous in top apps.

The novelty of standalone AR apps is bound to wear off, but as this happens, mobile AR ads will come to full-featured apps and mobile web browsers. Facebook already tested out a feature that lets users see AR images by pointing their phone’s camera at a poster for the movie Ready Player One. In April, Snapchat unveiled ‘shoppable AR’, which creates the potential for users to try on clothing in AR and then go directly to a website to make a purchase. Content like this strikes a balance of having a low barrier to entry while still being more appealing than a standard display ad.

 

AR has the potential to make mobile ads much more eye-catching. To differentiate themselves, smaller developers will need to showcase their creativity and build experiences that go beyond simply placing virtual objects in the real world. It’s a win-win for consumers (who would rather experience interesting ads than boring ones) and brands (whose content will get noticed).