Physicians Formula uses AR ads to replicate offline shopping experience

Physicians Formula is bringing an offline touch to desktop and mobile advertising by using augmented reality ads to replicate the in-store shopping experience.

The brand, founded in 1937, has been displaying these ads on lifestyle and women’s websites such as SheKnows, which allow users to see themselves in an ad and try on makeup. The augmented reality ads work by indicating to a viewer that they can either upload a photo or give the ad access to their mobile or web camera. Additionally, users can also purchase that makeup through the ad itself by adding items to a basket and then proceeding to checkout.

Physicians Formula has been using AR ads since June, though the company only recently acknowledged doing so. This comes at a time when many tech platforms and brands, such as Facebook, Snapchat, Sephora and Bobbi Brown, are experimenting with AR advertising, as the online advertising industry is seeing a higher cost and lower engagement.

Competition for web traffic has coincided with a 12 percent increase of digital advertising on average between 2013 and 2016, and is rising five times faster than inflation, according to Adobe Digital Insights. Overall, U.S. digital ad spending reached $83 billion in 2017, representing an increase of almost 16 percent, according to eMarketer. The lion’s share went to Google and Facebook, and Facebook has begun to offer AR advertising options in its News Feed, with Sephora, NYX Professional Makeup and Bobbi Brown all having begun testing it in late summer.

For makeup brands like Physicians Formula, the beauty of AR ads lies in being able to improve the shopping experience where customers cannot typically try on makeup, such as in mass retailers like Target or CVS. The brand has 35,000 points of mass distribution worldwide, including 25,000 doors across Ulta, Walmart, Target, CVS, Rite Aid and Walgreens in North America. Additionally, it can replicate the experience of stores like Sephora and even department stores, where trying on makeup is the norm, Smith said.

“Being able to drill down to the products you want goes back to the way it was in-store when you looked at a limited selection. Now, you are presented with limitless options [online],” said Linda Smith, founder and CEO of FaceCake Marketing Technologies, the company that created the AR ads. “[AR] is about making shopping easier, as customers don’t necessarily have time to shop the way it was done before.”

So far, the ads have performed within expectations, according to Smith. Although she could not speak to the brand’s specific performance, as the campaign does not end until October, she said that, overall, FaceCake AR ads experience 10 times more engagement than the average rich-media ad, which is for about 13 seconds, according to the Google Benchmark for Rich Media. Additionally, FaceCake AR ads experience seven times the click-through rate compared to the industry average of 0.80 percent for native ads, according to AppNexus and Google. Beauty brands specifically benefit from AR ads, as they see the average basket size increase by 20 percent, and even more for niche beauty brands, as people are dabbling more with discovering new products and shades, and shopping within the ad, according to Smith.

“People want this kind of experience. People seek it out. You want to see yourself in the products without going to the store,” she said.

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