Is AR Cheaper Than VR? Exploring the Cost Differences and Value

The Out-of-Home advertising industry has reached a pivotal point, with augmented reality technologies driving engagement surges of 300% , while the U.S. market exceeds the historic $10 billion mark for the first time. As traditional billboards become interactive experiences and measurement capabilities match digital advertising precision, Fortune 1000 brands are reimagining how they connect with consumers in physical spaces. Digital transformation has surged past expectations, with programmatic OOH projected to exceed $1 billion by 2025, while AR-enhanced campaigns see interaction rates over 30% in prime locations. The merging of 5G networks, AI-driven personalization, and privacy-focused measurement solutions is shaping an advertising medium that blends the trusted presence of traditional OOH with the accountability and targeting accuracy of digital platforms. Record-breaking market growth signals industry maturation The OOH advertising landscape has reached unprecedented scale and sophistication in 2024, setting the stage for explosive growth in 2025. Total U.S. OOH revenue hit $9.1 billion in 2024 , a 4.5% increase and the first time the industry has exceeded the $9 billion mark. This momentum continues with Q1 2025 already showing $1.98 billion in revenue, maintaining the industry's impressive streak of 16 straight quarters of growth . Global markets are expanding rapidly, with the worldwide OOH market projected to reach $50.52 billion in 2025 , fueled by a strong 4.84% compound annual growth rate. Digital OOH is growing even faster at 15.2% annually , expected to reach $26.57 billion globally as traditional static displays shift to dynamic, programmable formats. The spending patterns show a major shift in advertiser priorities. Digital OOH now makes up 34% of total U.S. spending , with annual growth of 7.5%, significantly surpassing traditional formats. This digital shift highlights brands' need for measurable, adaptable, and interactive advertising experiences that static billboards simply cannot offer. Fortune 1000 brands are leading this transformation , with tech giants like Apple, Amazon, and Google joining traditional OOH leaders such as McDonald's and Coca-Cola as major spenders. Notably, 25% of the top 100 OOH advertisers are now tech or direct-to-consumer brands , reflecting the medium's shift from broad-reach branding to performance-focused marketing.

Executive Summary Snapchat Spectacles AR glasses represent a $353 billion market opportunity projected by 2030, with Fortune 500 companies already achieving 20-40% conversion rate increases through AR implementations. The 2024 developer program launch positions forward-thinking marketing organizations to build competitive advantages ahead of the 2026 consumer release. Key findings : 91% of tech enterprises are adopting AR/VR, with proven ROI across retail (resulting in 31% sales boosts), training (yielding 40% productivity improvements), and experiential marketing. Early adopters, such as Sephora, Walmart, and Boeing, demonstrate that AR investments yield measurable returns when used strategically. For Fortune 1000 marketing leaders, the key opportunity to build AR capabilities is now—before widespread adoption commoditizes these advantages. The core technology is solid: current Spectacles offer a 46° field of view, 45-minute battery life, and comprehensive developer tools for $99 per month. Although hardware limitations exist, the platform's social-first focus and AI integration offer unique opportunities for brand storytelling, customer engagement, and immersive experiences that traditional marketing channels cannot match. The technology behind next-generation marketing Snapchat's fifth-generation Spectacles are the most advanced consumer AR glasses available, boasting technical specs that enable enterprise marketing applications previously unattainable with mobile AR. Core technical capabilities position these glasses for professional use, featuring dual Qualcomm Snapdragon processors with titanium vapor chamber cooling, proprietary Liquid Crystal on Silicon micro-projectors, and comprehensive sensor suites that include four cameras, six-microphone arrays, and 6-axis IMUs. The 13-millisecond motion-to-photon latency ensures seamless AR integration that doesn't break immersion, critical for customer-facing applications. The platform's AI integration sets it apart from competitors . Native support for both OpenAI GPT and Google Gemini models allows real-time contextual understanding, while over 40 language transcription capabilities facilitate global marketing opportunities. The spatial engine offers persistent 3D object placement, enabling brands to develop location-specific experiences that remain consistent across multiple user sessions. Current limitations require strategic planning . The 45-minute battery life restricts extended use, while the 46° field of view creates a "box effect" instead of full peripheral vision. The 226-gram weight, although much lighter than VR headsets, still feels heavy during long customer interactions. However, these issues can be addressed through creative campaign design and will improve with the introduction of the lighter, more advanced "Specs" in 2026. Developer ecosystem maturity delivers immediate value. Over 4 million existing Snapchat Lenses are compatible with the new hardware, while partnerships with LEGO, Lucasfilm, and enterprise training companies demonstrate B2B potential. The $99 monthly subscription with no revenue sharing offers favorable economics for Fortune 1000 companies developing proprietary experiences. 

The artificial intelligence glasses market has reached its inflection point in 2025, with Meta's Ray-Ban collaboration demonstrating consumer demand and driving 210% year-over-year growth. The market is projected to expand from $1.93 billion in 2024 to $8.26 billion by 2030, representing a 27.3% compound annual growth rate. Industry analysts anticipate over 25 million AR glasses shipments by 2030 with 67% CAGR growth, while Meta currently dominates with over 60% market share and 2 million units sold. For Fortune 1000 marketing executives, AI glasses represent a transformative technology that enables contextual advertising, immersive brand experiences, and unprecedented first-party data collection. Apple's Vision Pro sparked enterprise pilots in 50% of Fortune 100 companies within three months of its launch , while early AR advertising implementations demonstrate engagement increases of 30-40% over static ads and 67%+ social sharing rates for AR-enhanced attractions. The convergence of computer vision, natural language processing, and augmented reality creates opportunities for revolutionary customer engagement strategies that build on proven advances in out-of-home advertising technology . The competitive landscape will intensify dramatically over the next 18 months , with Apple's late-2026 launch targeting Meta's dominance, Google's Android XR platform enabling multiple hardware partners, and Johnny Ive's $6.5 billion OpenAI collaboration promising breakthrough design innovation. Marketing leaders must evaluate platform strategies now to take advantage of this emerging category before market consolidation occurs. Ray-Ban Meta leads through proven AI integration and consumer adoption Meta's Ray-Ban Smart Glasses have established the AI glasses category through advanced artificial intelligence capabilities instead of basic smart features. With more than 2 million units sold since October 2023 and sales tripling year-over-year in Q1 2025 , the partnership with EssilorLuxottica shows that consumers will embrace AI wearables when they provide real utility. The device's 12MP ultra-wide camera, equipped with 1080p video recording at 30fps, enables Meta AI's "Look and Ask" feature, allowing users to receive contextual information about their environment through computer vision analysis. The Snapdragon AR1 Gen1 processor, featuring dedicated AI processing units, manages on-device inference, while five built-in microphones and open-ear speakers ensure clear audio quality. Real-time language translation supports English, French, Italian, and Spanish; Shazam integration offers instant music identification. Technical specifications highlight consumer-ready design priorities : a 50-gram weight ensures all-day comfort, 4 hours of active usage with a 32-hour charging case capacity, and LED recording indicators address privacy concerns. The audio-focused approach without visual displays allows for immediate market deployment while Meta develops true AR capabilities for future generations. Meta AI integration marks the first successful deployment of multimodal AI in consumer wearables , simultaneously processing visual, audio, and contextual data. Users can capture hands-free photos and videos, live-stream directly to Facebook and Instagram with one-touch broadcasting, and access voice-activated calling and messaging. First-person perspective content creation removes filming friction , enabling authentic "through the eyes" experiences perfect for influencer marketing and experiential campaigns. Pricing accessibility drives mainstream adoption , with base models starting at $299 for clear lenses, $329 for polarized, and $379 for Transitions technology. The integration of prescription lenses adds $160-$300, positioning the product competitively against premium sunglasses while delivering advanced AI capabilities. Availability in over 15 countries, including the United States, Canada, the European Union, the United Kingdom, Australia, and India, demonstrates Meta's commitment to global scale. Expanding production capacity to 10 million units annually by 2026 demonstrates Meta's confidence in ongoing demand growth. EssilorLuxottica's manufacturing expertise, combined with Meta's software platform, creates significant barriers to entry for competitors without similar partnerships.

The merging of physical and digital retail experiences through augmented reality has reached a pivotal point, with Fortune 1000 companies reporting 20-40% increases in conversion rates and the AR retail market growing from $2.3 billion in 2024 to an estimated $6.7 billion by 2030. This thorough analysis shows that early adopters of AR storefronts, murals, billboards, and mirrors are enhancing customer engagement and fundamentally changing retail profitability. With 91.75% of Generation Z showing strong interest in AR shopping experiences and 61% of consumers preferring stores with AR features , the chance to lead the market is quickly slipping away. The evidence is clear: Sephora's AR mirrors result in a 31% boost in sales and 90% higher conversion rates , while furniture retailers using AR visualization see a 22-40% reduction in return rates . These are not just experimental numbers—they are proven business outcomes from cosmetics, fashion, furniture, and out-of-home advertising applications. The main message is this: organizations that excel in phygital experiences over the next 18 months will gain significant competitive advantages as consumer expectations increase around interactive, immersive shopping. Quantified market opportunity validates strategic urgency The phygital retail market is one of modern commerce's most exciting growth stories. The global AR shopping market is projected to reach $54.7 billion by 2033 , with a remarkable 29.9% compound annual growth rate from $4.0 billion in 2023. This growth is driven by both technological advances and fundamental shifts in consumer behavior, particularly among digital-native demographics who will have purchasing power over the next decade. Consumer demand has hit a turning point : 91.75% of Generation Z shoppers actively seek AR-enabled experiences, and 65% of all consumers now prefer phygital shopping over traditional methods. Perhaps most notably, 40% of consumers are willing to pay premium prices for products they can experience through AR, demonstrating that this technology increases engagement and revenue. The mobile AR retail market alone is expected to hit $8.6 billion by 2025, with 1.73 billion AR-enabled devices worldwide by the end of 2024. This infrastructure removes previous barriers to AR adoption, allowing mass-market consumers to access sophisticated retail experiences via existing smartphone hardware. BrandXR's detailed analysis of AR in retail emphasizes this transformation across various industry sectors. Enterprise adoption is quickly rising : 35% of business leaders have adopted AR/VR technology in at least one business unit, with 13% implementing it across multiple divisions. Among Fortune 500 retailers, 70% actively integrate phygital technologies, while 57% plan to increase software spending in 2024 specifically for marketing and IT initiatives supporting these experiences.

Stop Buying Billboards. Start Building Experiences. 

The Middle East's out-of-home advertising market is experiencing a dramatic transformation as traditional billboards give way to digital displays and augmented reality experiences. Saudi Arabia and the UAE are leading this revolution with combined OOH investments exceeding $380 million annually and DOOH growth rates of 16-23% , which far surpass global averages. This shift represents more than just technological evolution—it signals a fundamental reimagining of how brands connect with consumers in the world's most digitally advanced region. These Middle Eastern innovations build upon global augmented reality advertising frameworks and accelerate trends documented in our business case for augmented reality advertising in 2025 . The regional success patterns provide valuable insights for brands implementing AR billboard campaigns and AR mural installations in markets worldwide, demonstrating scalable approaches to location-based immersive advertising. Government mega-projects like Saudi Vision 2030 and the UAE's smart city initiatives are driving unprecedented infrastructure investments, creating prime advertising opportunities that attract global attention. The region's unique mix of high smartphone penetration (99%), massive public infrastructure projects, and culturally sophisticated audiences is boosting advertiser ROI metrics that consistently surpass traditional media channels. Digital OOH campaigns now achieve engagement rates six times higher than static billboards, while AR-enhanced experiences are elevating interaction rates beyond 30% in premium locations. The economic significance extends far beyond advertising spending. These markets are establishing new global benchmarks for location-based advertising effectiveness, with Dubai and Riyadh emerging as testbeds for next-generation advertising technologies. Marketing executives can quantify the business impact of these regional innovations using our AR advertising ROI calculator , which models how Middle Eastern engagement improvements translate to revenue growth in other markets. The strategic implications extend to 2025 metaverse marketing strategies for Fortune 500 brands , where location-based AR serves as a foundation for comprehensive digital engagement ecosystems.

Executive Summary Mixed Reality and Spatial Computing represent the most significant opportunity for marketing transformation since the digital revolution, with Fortune 500 companies already achieving 94% higher conversion rates and 460% return on ad spend through immersive experiences. The global MR marketing market, valued at $4.5 billion in 2023, is projected to reach $342 billion by 2037—a 39.7% compound annual growth rate that surpasses traditional digital marketing channels. The strategic window for competitive advantage is now. With only 30% of Fortune 1000 companies actively piloting MR marketing and the Apple Vision Pro driving enterprise adoption across 50% of Fortune 100 companies within three months of launch, early adopters are establishing decisive market positions. Companies like IKEA, Mercedes-Benz, and Sephora are demonstrating measurable ROI through immersive experiences that fundamentally reshape customer engagement. These success patterns are documented in our comprehensive case studies and build upon strategic frameworks outlined in our business case for augmented reality advertising in 2025 . Marketing executives can model potential ROI using our AR advertising calculator , which incorporates performance benchmarks from Fortune 500 implementations. Three critical factors converge in 2025: maturing hardware capabilities, proven enterprise ROI models, and accelerating consumer adoption among Gen Z (89% interested in AR/VR shopping experiences). This confluence creates an unprecedented opportunity for marketing leaders to build sustainable competitive advantages through spatial computing before market saturation occurs in 2026-2027.

The “metaverse” has emerged as a new arena for brand innovation and customer engagement, blending virtual and physical experiences. While a fully realized metaverse is still evolving, leading companies are already experimenting with immersive marketing strategies to gain an early edge. McKinsey estimates the metaverse could generate up to $5 trillion in economic value by 2030 , and many Fortune 500 brands are investing now to build their presence and connect with the next generation of consumers. From augmented reality (AR) activations in the real world to persistent virtual venues on gaming platforms, Fortune 500 companies are leveraging a spectrum of metaverse marketing strategies . Below, we explore key strategies – including NFTs, AR filters, immersive out-of-home ads, AR-enhanced events, and branded virtual worlds – and how they are being used to engage audiences in new ways. NFTs and Digital Collectibles  One entry point for brands into the metaverse has been through non-fungible tokens (NFTs) and digital collectibles. NFTs are unique digital assets on the blockchain that allow brands to offer limited-edition virtual goods, artworks, or experiences to fans. Major companies have launched NFT collections as a marketing strategy – for example, Coca-Cola’s first NFT auction in 2021 garnered over $575,000 in bids, with proceeds going to charity. The NFTs (packaged as a “loot box” of digital Coca-Cola memorabilia) tapped into the brand’s heritage while engaging crypto communities, illustrating how digital collectibles can generate buzz and fan involvement in the metaverse . However, NFTs do not have to consist solely of static images or virtual items. Brands are currently exploring ways to enhance NFTs with interactive and augmented reality elements. Augmented reality NFTs merge NFT ownership with immersive experiences: by using AR filters and apps, users can project their NFT content into the real world or share it on social media. This adds both utility and entertainment value to the digital collectible. For instance, AR can “bring NFTs to life” through interactive 3D filters that users share on Instagram, Snapchat, or TikTok . By incorporating AR with NFTs, brands can enable gamification (e.g., unlocking hidden features when scanning an NFT in AR) and create more socially engaging experiences that transcend static images. Essentially, AR provides brands a way to elevate their NFT offerings into memorable, shareable moments . An NFT of a branded character, for example, can come with an AR lens that places that 3D character in a fan’s room or allows the fan to “wear” the character as an avatar filter – merging the digital collectible with real-world interaction. This strategy not only increases the utility of NFTs for the holder but also amplifies organic marketing as fans create user-generated content using the AR features. By leveraging NFTs (and perhaps pairing them with AR), Fortune 500 brands can create digital collectibles that serve as marketing assets, driving demand based on scarcity, fostering community, and encouraging viral sharing. As consumers devote more time to digital spaces, status symbols and brand memorabilia are increasingly moving virtual. From fashion companies launching NFT apparel to sports franchises offering highlight clips as NFTs, this strategy enables brands to monetize digital fandom and maintain their presence in metaverse culture. The key is to ensure these offerings provide genuine engagement or value. Augmented reality serves as one tool to achieve that, transforming a simple NFT into a gateway for an interactive brand experience .

Executive Summary Augmented Reality (AR) has transitioned from a novelty to a necessity in the retail and e-commerce landscape as we approach 2025. Consumer adoption has reached a tipping point, prompting brands to rapidly integrate AR into shopping experiences to enhance engagement, confidence, and sales. This report offers a data-driven analysis of AR trends in U.S. retail and e-commerce, featuring Fortune 500 case studies and expert insights that illustrate AR’s increasing impact. Key findings: AR adoption is mainstream in 2025, with nearly 60% of the U.S. population— and almost all users of social and messaging apps—expected to be frequent AR users by then. Over 90% of American shoppers already use AR or are open to using it for shopping, and 98% of those who have tried AR found it helpful in making purchase decisions . Younger consumers are leading the way: 92% of Gen Z say they want to use AR tools for e-commerce. Retailers are investing in AR at scale: Research from Gartner shows that 80% of retailers will deploy AR as part of their customer experience strategy by 2025. A 2023 survey found that over half of retailers planned new AR/VR investments within two years. This reflects AR’s proven ability to bridge online and offline shopping—a critical advantage, as brands offering AR shopping features attract 71% of consumers who prefer interactive, “try-before-you-buy” experiences. AR drives conversion and reduces returns: By allowing shoppers to visualize products realistically, AR boosts purchase confidence. Shopify’s data reveals that products featuring 3D/AR content see an average of 94% higher conversion rates than those without it. Retail studies indicate that consumers engaging with AR are significantly more likely to convert – in fact, one report noted a 90% lift in conversion rates among AR users compared to non-AR users. Additionally, AR assists shoppers in making the right choice the first time: brands employing AR for visualization have reported up to a 40% decrease in product return rates , potentially saving millions in reverse logistics costs. “Try-before-you-buy” goes virtual: AR virtual try-ons for products like apparel, footwear, cosmetics, and eyewear have become essential. Shoppers can see items on themselves or in their space through their phones, bridging the imagination gap. These experiences boost customer confidence and sales – for instance, Shopify merchants using AR try-ons also report fewer returns alongside sales increases. In physical stores, AR smart mirrors engage visitors by overlaying digital clothing or makeup, enhancing fitting room traffic and delighting customers. Early pilots of AR mirrors (e.g., at Tommy Hilfiger) increased the number of try-ons and in-store foot traffic by up to 60% , highlighting AR’s ability to revitalize brick-and-mortar retail. AR storefronts and AR murals drive foot traffic. Brands are transforming store windows and outdoor displays into interactive AR experiences. AR storefronts overlay digital content on physical store exteriors, turning passive glances from passerby into engaging moments that entice shoppers to come inside. Retailers utilizing AR storefront activations have reported substantially higher engagement (BrandXR notes up to 11× engagement vs. static displays) and increased store visits. Similarly, AR murals— digital overlays on outdoor art or billboards—create buzz and promote social sharing. Major brands like Honda, Tripadvisor, and Lego have used AR murals in high-traffic locations to capture attention, with research indicating that nearly 70% of consumers take action after seeing interactive AR outdoor ads. Social media AR is the new word-of-mouth: AR face filters and lens effects on platforms like Snapchat, Instagram, and TikTok have become viral marketing tools. Over 300 million Snapchat users engage with AR lenses daily , while shoppers increasingly utilize social AR to discover and virtually try on products. Notably, Snapchat’s AR try-on campaigns have driven significant revenue – e.g., an AR makeup catalog lens for Ulta Beauty generated 30 million product try-ons and $6 million in sales in just two weeks . Brands from Gucci to Nike are experiencing positive ROI from social AR: Gucci’s Snapchat AR shoe try-on lens reached over 18 million users and boosted product page views by 188% , with a 25% increase in purchase intent. These examples emphasize how AR can enhance reach and conversion through engaging, shareable content. WebAR lowers barriers to entry: The rise of WebAR (web-based AR) allows consumers to launch AR experiences with a simple QR code scan or link, eliminating the need for app downloads. This frictionless access has broadened AR’s reach through mobile browsers, facilitating easier integration of AR into e-commerce sites and advertising for brands. Consequently, WebAR campaigns are proliferating – from interactive packaging to car showroom experiences – enabling anyone with a smartphone to participate in AR. Industry forecasts indicate WebAR will drive substantial growth in AR marketing spending through 2025 as brands capitalize on its accessibility. In summary, AR in retail and e-commerce provides immersive shopping experiences that enhance engagement, boost customer satisfaction, and directly drive sales . What was once a futuristic experiment is now a practical tool: AR assists retailers in reducing the cost of consumer attention, personalizing marketing at scale, and blurring the line between digital and physical shopping. The following sections detail the current technologies – from AR storefronts to social lenses – along with data, case studies, and actionable insights for marketing leaders aiming to capitalize on augmented reality in 2025.