Meta pitches augmented reality to advertisers with new AR Reels Ads and Facebook Stories

Augmented reality is coming to Reels Ads and Facebook Stories, Meta announced this afternoon at the IAB's NewFronts as part of its pitch to advertisers. The update allows brands like Sephora, Tiffany & Co. and others to offer more immersive experiences and AR filters when marketing to Meta's audience, including its younger Gen Z users. The company said it's also rolling out other enhancements and improvements to Reels ads and noted brands will now be able to work with third-party measurement partners for their Reels Ads campaigns.

Meta's investment in augmented reality (AR) advertising could better position the company to compete with Snap for marketers' ad dollars, as they look for ways to reach the younger, Gen Z demographic. Earlier this week at NewFronts, Snap introduced its own set of new ad products, including those for Stories and its TikTik clone known as Spotlight. But its more eye-catching news was its test of sponsored links in its AI chatbot feature, My AI.

In terms of AR, however, Snap has long offered ways for brands to reach its users through the format, including through a variety of AR commerce features and its popular Snapchat Lenses, for example. It also works with brands that want to leverage its AR technology on their own websites and apps through its AR Enterprise Services division.

Before today's announcement, Meta offered AR ads in the Facebook Feed, Instagram Feed and Instagram Stories. According to its data, these ads drove incremental ad recall with the 18- to 24-year-old demographic 87% of the time, outperforming non-AR-enabled ads.

Now, those ads can run in other prominent places across Meta's platform, including Facebook and Instagram Reels and Facebook Stories.

Sephora was able to test AR Reels ads ahead of this launch, where it ran an ad that had users press their thumb to the screen to generate an "aura vibe" filter to help them pick the best-fitting fragrance and make a purchase. The company said over half of the ad's audience was Gen Z users.

Image Credits: Meta

Tiffany & Co. also created an AR ad that let users immerse themselves in their 5th Avenue flagship store, "The Landmark," and browse the jewelry.

In addition to the expansion of AR advertising, Meta announced features to make Reels Ads more interactive, including a test of a larger "call to action" button with additional advertiser information on Facebook and Instagram Reels ads. The button includes an ad thumbnail, headline and additional business details, like the website URL, to help direct interested customers to click.

Image Credits: Meta

The company will also now allow Facebook users to pause a video ad and preview where the link would take them, potentially driving an increase in click-through rates for Reels Ads.

For shopping ads, Reels will introduce new multi-destination product ads which means that instead of an ad only pointing to a retailer's website or single product page, they can swipe through multiple product images in a carousel without leaving the Reel they're watching.

Image Credits: Meta

Meta also said marketers can now work with select third-party measurement firms on Reels Ads campaigns, including Double Verify, IAS and MOAT. The company said these firms are helping it to test and launch a Reels Viewability reporting option that will later roll out to advertisers when testing is complete.

The company also took a moment during its presentation to pitch its investments in AI, noting it's using the technology is being used to improve ads ranking by learning which ads are working and which are not, and to better predict which ads are going to be most relevant.

"It's also driving efficiency for a suite of ad products, eliminating many of the manual and tedious steps of creating an ad," said Nicola Mendelsohn, Meta's head of Global Business Group. She added that Meta's investments were "already paying off, especially with Meta Advantage, which is our brand name for our portfolio of AI products. Meta Advantage leverages machine learning and AI to help advertisers test and learn but to also realize their campaigns fast and help them acquire and grow their customer base."

Mendelsohn said the majority of Meta advertisers were already using an AI product, Advantage+ Shopping, launched only last August. Before, advertisers had to manually set up a campaign to text their mix of targeting, creative and placement, she explained, which was time-consuming. Now, advertisers can use Advantage+ Shopping campaigns to executive million of iterations of targeting performance scenarios within milliseconds, allowing them to pick the best combination, in order to send the best ad to the right person at the right time -- all thanks to AI.

"This is just the start of how AI can create better connections with people and drive more growth for your business. And we're going to have more and more product updates and announcements around AI just in the coming few weeks," she said.

The company had also spoken about its AI agenda during its Q1 earnings, noting also how AI was improving its Reels monetization efficiency, which was up over 30% on Instagram and over 40% on Facebook on a quarter-over-quarter basis. Plus, CEO Mark Zuckerberg also shared that Meta's future plans for AI included "chat experiences in WhatsApp and Messenger, visual creation tools for posts in Facebook and Instagram and ads, and over time video and multi-modal experiences."