Why AR and VR are not going away, as AI advances personalization, measurement

“They are at different stages, with AI very much within a peak of excitement — while AR/VR is within the trough of disillusionment,” Kania said.

The “trough of disillusionment” represents the phase after an initial hype cycle when “interest wanes as experiments and implementations fail to deliver,” based on Gartner’s research. This could mean AR and VR experimentation starts to face challenges or there’s a lack of return on investment as different product issues arise. More or less, the honeymoon is over.

For Meta’s part, the tech giant this month added AI features and an assistant to its headset Quest 3 — which incorporates AR and VR capabilities — signaling a continued interest to test these features on its new devices.

“Just because they compete for attention on the front page of news doesn’t inhibit their ability to progress in parallel,” Kania added. “Each will offer unique value for marketers and consumers.”

Personalization opportunities

AI could elevate personalization by showing brands how they can rethink human connection and spatial computing possibilities. That can include using AI to enrich interactions and experiences in VR games, or using AI avatars and assistants to guide people through a physical or virtual space, explained Dan Gardner, cofounder of Stagwell agency Code and Theory.

“We happen to be at a fun time right now where there’s a lot of really interesting things happening at the same time, so AI is actually part of the story of VR and AR there,” Gardner told Digiday. “It’s not a separate story, it’s not a competing story.”

Code and Theory balances creative and engineering to approach AI, communications, design and tech with its clients and B2B partnerships with Amazon, Microsoft and Clover. Recently, it worked with Volvo Trucks on web and digital experiences in what became the client’s biggest launch in 25 years. With the hardware improving, from headsets to spatial computing, Gardner believes the industry will be able to incorporate more experiential elements of AR and VR – and more seamlessly blend realities.

“Technology is moving as an enabler to you as a human,” Gardner said. “AR and VR is really part of this more spatial computing, which is really the blend of all senses — your eyes, your ears, the way you move,” he said.

Stagwell has partnered with sports teams on an augmented reality experience to boost user engagement during live games in arenas. It later expanded it to an in-home AR experience for those watching from home to experience AR effects, interactive content coordinated with touchdowns, player animations and other game-related contests.

Another Stagwell agency, Left Field Labs, also sees the addition of AI as an “underpinning to things we are doing” in other emerging technologies, said Eric Lee, partner and CTO at Left Field Labs. In gaming, for instance, players typically have limited ways they can interact with other characters. That basically relies on scripted content. (The Code and Theory Network recently expanded to include the acquisition of Left Field Labs.)

“AI really opens that up,” Lee said. “So I think the ability to interact with more rich characters has more novel and truly unique experiences with a game. I think we’re going to see a lot of exploration that we’re kind of taking outside of gaming, too.”

The agency also works on physical events, and it is starting to test 3D models using AI personalities that can show people around a physical space. They can help answer questions, Lee explained.

Going beyond quantitative measurement

Those in-person interactions, though, have the ability to create different metrics of success. If people are walking through an event, instead of just measuring how many attended, perhaps they can later track facial expressions or add other qualitative data, Lee added.

“Be it in a VR [or] AR experience, a physical experience, even just observing how a person moves through a website, you get better signals around the qualitative,” Lee told Digiday. “I hope that that is a metric that we’re able to expose more and get more from, because there’s a limited amount … through what people tell you in a survey — and it’s always going to be with a bias.”

Abdalla Atalla, marketing technology specialist at digital agency Cuker, mentioned AI accelerating the growth of extended reality (XR) — or a combination of AR, VR and mixed realities — because it can improve user engagement metrics. For example, eye tracking, biometric sensors, motion and position tracking can provide valuable data that AI can then process in large amounts — and perhaps extract deeper insights.

“AI enables the processing of vast amounts of eye-tracking data, offering insights into user attention and interest,” Atalla said.

However, there are questions about the accuracy of that data — as well as the ethics and privacy concerns with some of those tracking methods.

“Deciding what data is collected, how it’s protected and who will have access to it, is key,” said Atalla. “Transparency with the consumer and how pioneers of this technology will carve out those rights is essential.”