Michael Kors is first to test AR ads in Facebook news feed

Brief:

Fashion brand Michael Kors is the first advertiser to test out Facebook's augmented reality (AR) ads in the news feed, according to a statement shared with Mobile Marketer. Ty Ahmad-Taylor, vice president of product marketing for Facebook's global marketing solutions, announced the news on Tuesday to highlight the social network's advertising plans for the holidays.
Users can click the ads' "tap to try it on" button to superimpose a pair of Michael Kors sunglasses on their face to see how they look, and then make a purchase directly in the app. Sephora, NYX Professional Makeup, Bobbi Brown, Pottery Barn, Wayfair and King will start testing the AR ad format later this summer.
Facebook also announced the global expansion of its Shopping on Instagram Stories feature that lets merchants transact with the platform's more than 1 billion users. Facebook-owned Instagram also added the Collection format, which mixes videos with product catalogs to all advertisers worldwide. Facebook also rolled out its Video Creation Kit to help marketers more easily create mobile-first video ads.

Insight:

Facebook's new AR ads in the news feed lay the groundwork for an expansion of advertising capabilities on its core social network as it looks to lure more brands and marketers. This builds upon the social giant's test of similar ad formats in Messenger, announced earlier this year. Businesses using Messenger's new AR features have seen favorable results, as they've let marketers provide a more engaging experience to ad-fatigued customers. Several brands have used the tool to offer virtual try-ons of makeup, clothing and accessories to give people an idea of how items may look while wearing them.

ASUS, Nike, Kia and Sephora began testing Messenger's AR ads in May. Electronics maker ASUS saw an average of more than 10 times the engagement with its AR experience in Messenger than with a previous ad that didn't include AR, per Facebook's statement. Nike used the tool to offer the Kyrie 4s model of shoe exclusively in Messenger, helping to sell out in less than an hour. To launch the new Stinger GT, carmaker Kia combined an AR experience with a click-to Messenger ad campaign that helped drive a 46% increase in daily average dealer inventory searches and a 20% increase in daily calls to dealerships directly from Kia's Messenger experience.

AR usage is growing among people and businesses, with more than 80 million Americans engaging with the tech each month, according to a Boston Consulting Group (BCG) study commissioned by Snapchat's parent company. BCG forecasts that that number will continue to surge, growing to more than 120 million U.S. users by 2021. By developing ways for this tech to be incorporated into ads, marketers can engage with consumers through immersive formats those target groups are already familiar with.

However, BCG found that advertisers are hesitant to allocate more of their marketing budgets to AR ads because of price, scalability issues and a short record of positive results of the nascent ad tech. These barriers will gradually lessen as the AR ad market matures and standard tools and platforms — such as Facebook's latest news feed ad format — become more widespread.