The AR Economy: Building New Revenue Streams Through Augmented Layers in the Physical World

Imagine walking down a busy street and, through your smartphone or Augmented Reality (AR) glasses, interactive digital ads appear in your field of view, blending seamlessly with the physical world. As you pass a café, a virtual menu on your phone screen shows today's specials, and you can explore them with a simple tap. This is how AR works—using your device to overlay digital content onto the real world, making everyday experiences more engaging and interactive without needing special gear beyond your phone or AR-enabled device.

Now, imagine that as a business, you can use these digital layers to not only enhance customer experiences but also create new revenue streams. From personalized ads to virtual real estate, AR is opening up a wealth of business opportunities that go beyond traditional models. In this article, we'll explore how you can tap into these possibilities to drive income and stay ahead in the evolving digital economy.

AR Advertising and Personalized Experiences

AR enables businesses to create revenue by integrating digital elements like interactive ads, 3D models, virtual characters, and animations with physical locations, products, or events. Here's how it works:

Interactive Advertising:

Instead of traditional billboards or pop-up ads on websites, AR ads appear through your smartphone screen when you point it at a specific location, product, or sign. For example, as you walk past a store or product, an interactive ad might appear in your phone's camera view, showing you special offers or letting you explore the product in 3D.

Immersive Brand Experiences:

AR can bring ordinary objects to life. Imagine scanning a soda can with your phone and seeing a character pop up on your screen, interacting with you. Or think of an AR menu that can show you the chef making the dish. This transforms a simple product into an engaging brand experience that catches the consumer's attention in a way traditional advertising cannot.

Le Petit Chef creates AR projections on the table using 3D projection mapping technology.

Targeted Marketing:

AR can personalize content based on your location, interests, and past behavior. As you walk through a shopping mall, your AR app might highlight deals in stores you love or show products that match your style. This means the ads you see are relevant to you, enhancing your shopping experience.

These AR experiences appear on your device's screen when you use an AR-enabled app like Pokemon Go or IKEA Place. By pointing your camera at specific triggers like product packaging, a store sign, or even a particular location, the digital content comes to life on top of the real-world image. Some ads might require scanning a QR code or opening a specific app, while others could work with general AR platforms. For example, IKEA Place requires customers to install and use their dedicated app to visualize furniture in their space.

Virtual Real Estate and Augmented Spaces

As technology continues to blur the lines between the physical and digital worlds, real estate companies are beginning to embrace immersive technologies like Augmented Reality (AR) and Virtual Reality (VR) to create new ways of engaging with properties, potential buyers, and investors. While these technologies are still evolving, they are already opening up new revenue streams and investment opportunities. However, the full potential of virtual real estate and augmented spaces is yet to be realized, offering forward-thinking organizations a glimpse into an exciting, innovation-driven future.

The Current Reality: How Real Estate Companies Use Immersive Tech

Real estate firms have already begun exploring immersive technologies, primarily through the use of AR and VR to enhance traditional property marketing and sales efforts. From Virtual Property Tours (VR) to Augmented Reality for Property Visualization (AR) when buyers can visualize unbuilt properties by overlaying digital models onto real-world views - these tools are already improving the customer experience and helping real estate companies close deals faster.

Sales of digital property in Metaverses that can cost as much as physical property in prime locations is already a reality. The most expensive piece of digital land was sold in The Sandbox to metaverse investment company Republic Realm for $ 4.3 million.

However, as AR and VR technologies mature and become more sophisticated, we can expect the real estate industry to take things to the next level. Here are some of the upcoming trends that could redefine how virtual real estate and augmented spaces are used:

• Owning AR Real Estate: One of the most exciting developments in the future of real estate could be the ability to buy and sell AR rights to specific physical locations. Imagine owning exclusive digital real estate over prime physical locations where businesses can project digital storefronts, interactive advertisements, or branded experiences through AR lenses. Much like owning a physical plot of land, owning digital layers over popular locations could become a highly valuable asset, leading to a new kind of real estate competition.
• AR-Only Commercial Spaces: As AR technology improves, we could see businesses opting to operate in AR-only environments, where storefronts or offices exist entirely in the digital realm but are accessed at specific physical locations. For example, retailers could set up virtual stores in high-traffic areas that users access through AR devices. These virtual spaces would not require traditional overhead costs like rent and maintenance, allowing businesses to innovate with greater flexibility while reaching consumers in unique ways.
• Integration of Smart Cities and AR: As cities become smarter and more connected, the integration of AR could allow for interactive, immersive real estate experiences tied to public infrastructure. Virtual real estate could be developed within smart city ecosystems, where public spaces become canvases for AR-enhanced experiences. This could include digital art galleries overlaid onto city parks or interactive maps that provide real-time property data at key locations.

While the full potential of AR and VR is not yet realized, these technologies are evolving rapidly, and companies that invest in understanding and adopting them early will have a significant competitive advantage.

The future of real estate is not just physical—it’s digital, immersive, and interactive. Companies that are prepared to embrace this future will lead the way, creating new revenue streams and delivering more engaging experiences for their clients.

Location-Based Digital Goods and Services

Companies now use AR to offer virtual collectibles and experiences tied to specific locations. This exciting trend allows businesses to create location-based rewards and AR-enhanced services that can only be accessed in particular areas.

The Donald Trump Non-Fungible Tokens (NFT) Collection

The Donald Trump NFT collection is a perfect example of how businesses use location-based digital goods to create value in the digital world. These NFTs are much more than just images or videos. They are exclusive digital assets that can be bought, sold, and traded on digital marketplaces.

What makes them unique is their connection to real-world events or specific locations. For collectors, these NFTs carry immense worth due to their uniqueness and often their association with historical moments. But the appeal doesn't stop there—these tokens can unlock exclusive digital experiences or provide access to content that bridges the virtual and physical worlds.

By owning a Donald Trump NFT, collectors are not just purchasing a digital item but acquiring a piece of digital history that offers real-world relevance. This blend of exclusivity, historical significance, and interactive content makes NFTs like these a powerful tool for businesses to engage with their audiences in a new, innovative way. The potential for growth in this market is huge as digital ownership becomes more valuable and sought after.

Fashion Brands Leading the Way in Digital Goods

Luxury fashion brands have also entered the digital goods space, offering limited-edition digital items that can be worn or showcased only in virtual environments. These items are often as exclusive and valuable as their physical counterparts, allowing brands to extend their identity into the digital world.

Gucci’s virtual sneakers being ‘worn’ by Alyx Gorman. Photograph: Gucci

Gucci has been a pioneer in the digital fashion space. In 2021, they launched the "Gucci Virtual 25" collection, a set of virtual sneakers that could be worn in digital environments like VRChat and Roblox. Gucci also collaborated with platforms like Roblox to release limited-edition digital clothing items, allowing users to dress their avatars in Gucci's iconic designs. These digital goods represent a new way for Gucci to engage with younger, tech-savvy audiences who value fashion and digital ownership.

Businesses are taking advantage of this trend by incorporating location-based digital goods into AR experiences or trading them online. This not only creates new revenue streams but also allows companies to engage customers in fresh, innovative ways. More than just a trend, this shift is blending the physical and virtual worlds, offering exciting opportunities for business growth and deeper customer interaction.

Social Commerce and Community-Driven AR Layers

AR empowers individuals and communities to create and monetize digital experiences, transforming local spaces into interactive social and commercial engagement hubs.

Making AR Accessible to Everyone

Augmented Reality (AR) is no longer just for big companies with large budgets. AR tools are becoming more affordable and accessible, allowing individuals and small businesses to join. This shift democratizes the AR economy, meaning anyone can now create and benefit from AR, not just those with significant resources.

Artists can buy or sell digital goods or only make them viewable through AR lenses or smartphones for a fee at a public event. Digital art can also be added at a public art gallery, with the AR content being an add-on to the collection that viewers can only see for a fee. An example of this would be the Thomas Crown Gallery that opened in Birmingham, featuring authenticated AR street art bound by “smART” contracts, preventing the growing problem of forgeries.

Another example is the 2019 edition of the Coachella Music Festival, where AR was used to virtually set the stage into outer space. Those attending could use a smartphone or AR devices to see planets or spaceships hovering over the crowds, everything in tune with the music. This offered a visual spectacle that would not affect the event’s operations, but fans would pay to engage with said performance.

Challenges of AR-Based Revenue Streams

While augmented reality offers the potential to unlock new revenue streams, it’s no secret that the technology is still in its early stages. This can present a series of challenges that businesses ought to navigate through, including the following:

• Technological Limitations: Hardware constraints and software integration might create challenges, as superior AR experiences require advanced devices. The average small business might have difficulties tapping into AR layer revenues as these devices are yet to become accessible to the masses.
• High Expenses: Once the AR content is developed, the revenue potential becomes very promising. However, the creation of said content can be expensive and time-consuming, requiring specialized skills and tools. This could slow the adoption of AR and the tapping into the new revenue streams.
• Privacy Concerns: Unlike physical property that can be secured under lock and key and surveillance systems, digital property is more vulnerable. With cyberattacks increasing at a concerning rate, the interactive nature of AR could raise the complexity of securing the data. This puts personal and location data at risk if not adequately secured.

While there is little to be done about the technological limitations, investors and business owners should keep an eye out for new developments. In the meantime, the focus should remain on enhanced data security and innovation. Luckily, with the rapid advance of AI, blockchain, and AR technology, the wait will likely not be long. In the meantime, business owners could employ the following techniques to overcome these challenges:

1. Partner with AR Specialists. When technology limits your ability to effectively implement AR digital layers, the best solution is to partner with agencies or manufacturers. This way, you can leverage the expertise without investing in AR technologies you can barely use. Collaborating with the manufacturers could give you direct access to the newest technologies and hardware, so you never miss out.
2. Monetize the AR Content. The AR technology is still considered relatively new, even if it’s been around for a few years. You can start small and scale the product gradually to keep the upfront resources at a minimum, but monetizing is an excellent way to offset the development costs. This can be done through in-app purchases, premium content, or branded experiences in collaboration with other companies.
3. Regular Privacy Audits and Compliance Checks. There’s been a 72 percent increase in data breaches, and hackers are becoming more and more creative with how they do it. To overcome this, business owners should conduct regular security tests and audits on their AR platforms, ensuring compliance with regulations. AI technology can help you perform these tests effectively and keep up with the changing law, making the necessary adjustments promptly.

Conclusion

AR allows individuals, small businesses, and communities to create and profit from digital experiences. Once considered complicated, this technology is now accessible for anyone to use. It allows people to add digital elements to the real world in fun and creative ways. As AR continues to evolve, now is the time for businesses and individuals to embrace its potential. Whether your goal is to enhance customer experiences, tap into new income streams, or introduce problem-solving innovations in your industry, AR offers endless possibilities.

To explore emerging technologies like AR and artificial intelligence (AI), the Silicon Valley Innovation Center (SVIC) offers customizable, expert-led programs that focus on research and development and the responsible implementation of these technologies, including innovation in the supply chain.

At SVIC, we understand that every company has unique needs, and that’s why we offer fully customizable programs tailored specifically to your goals. Whether you want to dive deeper into emerging technologies like AI, VR, blockchain, or explore critical topics such as data security, digital transformation, or innovation strategy, we’re here to craft the perfect solution for you.

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We will help you design a program that equips your team with the knowledge and tools to lead confidently in this rapidly evolving digital world.

Submit your inquiry today and discover how we can work together to empower your organization’s future through expert-led, customized learning experiences.