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"I know! Let's launch an augmented reality app. It's cheap and our customers will think we're really cool." This is the type of conversation that has been going on within marketing departments across the UK ever since AR started to take off earlier this year.

To some extent it's easy to see why. AR is a concept that could come straight from the pages of a sci-fi novel. Using a range of technologies that sit beneath the umbrella of AR you take the physical world and mix it with a digitally generated layer of information or imagery. In this computer-enhanced environment, you can watch a pixelated dinosaur dance on the palm of your hand or walk through a city street where well-known landmarks are annotated with information. The real world and the boundless universe of the computer programmer become one - at least on the screens of PCs or mobile devices.

It's heady stuff. Hardly surprising then that brands and their agencies have been rushing to explore the possibilities of AR in a bid to catch the eye of the online public.

For brands seeking to reach consumers via the PC, the AR experience requires a webcam and some clever rendering software. It works like this: The consumer's own image is rendered on screen by means of the webcam. The AR software is triggered by a symbol or logo, and when this happens, a second - usually 3D - image is added. By moving the symbol the consumer can manipulate the CGI projection.

It's a tool that has been used by a range of brands to promote their products. Some simply revel in the ability of AR software to create engaging and entertaining imagery, but others aspire to genuine utility. Take the 'virtual mirror', recently launched by online optician Glasses Direct. It provides customers - or, to be more precise, their on-screen image - with the ability to try on different frames.

Brands have also been reaching out to mobile users. Typically, mobile AR apps take advantage of the mapping, GPS and compass functionality that is increasingly built into mobile phones. Thus when a consumer arrives at a location, real-world objects can be rendered on screen along with lots of useful information.

Witness the celebrated Nearest Tube app, downloadable to the iPhone. Point your video camera at a street and it will tell you where to find the nearest Tube stations, along with all you need to know about how to get where you want to go on the underground network.

Hip or hype?

AR is undoubtedly a sexy technology and programmers and designers can have a huge amount of fun with it, but the jury is still out on whether or not it is adding anything significant to the online marketer's toolkit. No one would deny that the first-generation AR experiments have generated a buzz, but there are plenty of sceptics who question whether the technology can deliver anything other than bragging rights within the industry.

"If you do AR now, you can certainly get a real PR buzz," says Gregoire Assemat-Tessandier, global head of digital at Bacardi Global Brands. "But there is a difference between PR that impresses your peers in the industry and PR that reaches the consumer."

It's a distinction that Tony Effik, chief strategy officer at Publicis Modem, is also anxious to stress. "At the moment, a lot of augmented reality is still at the gimmick phase," he says. "It generates a lot of interest, but the truth is that the people who are most interested tend to work in the business."

The PC end of the AR universe is probably most exposed to accusations of gimmickry, with little in the way of substance to back it up. Indeed, Geoff Gower, digital creative director at Archibald Ingall Stretton, argues that PC-based AR has yet to demonstrate that it is capable of anything except attention-grabbing stunts. "I'm yet to see an example using a webcam that was anything but a gimmick," he says. "It tends to be at the level of 'lift this bit of paper up and pretend you're holding the FA Cup', which is underwhelming."

In the short term, 3D graphics blended with real-world images do have a certain wow factor, but AR designers are faced with the law of diminishing returns. The consumer who is captivated by, say, a cartoon image dancing on their hand today will surely be bored by something similar tomorrow. If simple spectacle is the selling point of AR, the novelty will surely wear thin, and quickly.

More importantly, allowing someone to hold a virtual FA Cup may be engaging for a few seconds, but it doesn't necessarily add very much to the conversation between the brand and the consumer. There is not necessarily any deep engagement going on.

To date, mobile apps seem to offer more scope to capture and retain the interest of the consumer. Crucially, they tend to emphasise marrying useful information to geographic locations. As the Nearest Tube app has demonstrated, the result can be an intuitive tool that provides consumers with localised intelligence when and where they want it. It's not a technique that is limited to tourist, restaurant or transport information. Earlier this year, IBM turned the Wimbledon Championships into an AR playground by enabling iPhone users to access scores and stats simply by pointing their handsets.

Beyond the wow factor

There is, however, a major 'but'. Any brand seeking to use an app as the basis of a mass-market campaign can't help but be deterred by the maths. "No matter what anyone tells you, there are not enough phones out there that can handle AR well enough for it to be a sensible marketing tool," says Gower.

Assemat-Tessandier agrees. "At the moment, the penetration of mobile devices that can handle AR just isn't high enough to justify investment in the technology," he says.

And while the world is full of PCs that are more than capable of rendering AR images, not all of them have webcams attached. That is changing, but while most new laptops and netbooks tend to have cameras on board, there is a certain amount of resistance to using them. "We tried a campaign based on webcams in Italy," recalls Assemat-Tessandier. "It wasn't as successful as we had hoped."

So the prognosis for AR as a mainstream marketing tool doesn't appear to be that promising, unless brands and agencies begin to look beyond the wow factor and come up with strategies for apps that engage consumers and begin to deliver on key campaign objectives, such as raising sales.

As Effik puts it: "Being cool for the sake of being cool is no longer enough."

Lynne Murray, head of design and marketing at software developer Holition, is convinced that AR has the potential to play an increasingly important role in generating sales. The company - a joint venture between 3D technology developer Inition and jeweller Holts Lapidary - specialises in virtual mirror software. Unsurprisingly, the company's initial focus has been the jewellery market and it is already providing sophisticated software that allows consumers to try on watches and bracelets in a virtual environment.

"It's a driver for people to buy online and offline," says Murray. "Consumers will be able to see how the item will look when they put it on. That will encourage them to either go to a physical shop and make a purchase or buy from the website. It will also help to develop a positive relationship with the brand."

Extra uses

The Holition system has been developed specifically for products worn on the body, but there is plenty of scope for giving consumers a real sense of the look and feel of products of all types.

Car companies such as Mini have used AR to allow potential buyers to manipulate and view 3D images from all angles. And AR has been embraced by mail-order seller Best Buy, with flyers from the company triggering product images on screen.

All of these strategies are designed to shift units rather than simply amuse. And as Jon Slade, global online and advertising sales director for the Financial Times, which recently launched its first AR app, observes, the technology provides an ideal way to link print and online content. "If someone is interested in the message of a print ad, you can provide more content online through the use of AR," he says. Slade doesn't believe that AR campaigning need be limited to products.

"A lot of advertising in the Financial Times relates to issues such as the environment and the future of cities," he says. "AR can be used to illustrate the points that advertisers want to make."

Meanwhile, the high-spec phone market is growing. Russell Townsend, managing director of Clusta, observes that while iPhones and Android-enabled devices may still be a small part of the overall handset market, their numbers are on the rise.

"There are 10 million iPhones out there now," he says. "It is becoming perfectly possible for certain brands to use mobile-based AR for mainstream campaigns."

The key to success lies in creating AR apps that are genuinely useful or compelling to consumers. Despite all the hype, slowly but surely brands appear to be rising to the challenge.

SMART THINKING AR: BEYOND THE HYPE

1. Think of the consumer. Clever AR generates publicity but often the PR is most closely read by those within the industry. Focus on strategies that will capture consumers' imagination
   
2. Harness AR to your brand objectives. If the aim is to increase sales, employ strategies that will drive consumers to onor offline stores
   
3. Think utility. AR has the potential to be an incredibly useful tool for consumers. Useful services will survive when gimmicky AR tricks are long forgotten
   
4. Educate the consumer. There is a certain amount of resistance to using the full functionality of mobile phones or webcams. Compelling apps will help overcome that resistance
   
5. Don't be over-ambitious. ±±¾©Èü³µpk10s that require a lot of processing power and high-quality webcams will limit their audience