By Kristina Grifantini, MIT Technology Review

While enjoying a game at Yankee Stadium, you take out your smart phone and point its camera at the field. If the resulting image on your screen shows a giant Quiznos toaster floating above the grass, does that make you more inclined to go get a Quiznos sandwich?

How about if you were at Mount Rushmore and you saw the four carved presidents sipping cola from Quiznos cups? Would that influence your lunch plans? Or what if you were on Wall Street, and aiming your smart phone at a real-world statue of a bull yielded an image of it enjoying virtual nachos?

To users, augmented reality (AR) can seem like magic. When they hold up their phones to their surroundings, the program uses the phone’s camera, GPS, compass, and Web connection to superimpose digital images and information on an on-screen view. For example, a building’s name might float over its image, or virtual arrows might point the way to a subway station. The digital information changes in real time as the camera moves.

Though this technology has been around for a while, it has largely been confined to computers with webcams, or to special goggles and headsets. But with the exploding popularity of sensor-equipped smart phones, marketers are trying to use it to sell everything from lunch to concert tickets.

For the Denver-based Quiznos, the idea came about when the number of mobile users visiting its website skyrocketed from 20,000 to a million in a year. Tim Kraus, Quiznos’s interactive-marketing manager, wondered how he could turn those visits into additional real-life trips to one of the chain’s 5,000-plus stores. He heard about Layar, the company in the Netherlands that created the most popular mobile AR app, with more than a million users worldwide. He decided that AR promised to add a “cool factor” for a new mobile store locator. The Mount Rushmore, Yankee Stadium, and Wall Street images were just a few of more than a thousand location-based virtual objects incorporated into the application.

But since Quiznos launched the AR campaign in June, fewer than 2,000 people have user the layer, says Kraus, and he is unable to link the campaign to any increase in sales. Undaunted, he calls it an early-stage experiment to discover what works and what doesn’t. Aside from the fun and novelty factor, “there’s actually some utility in there,” he says. “I definitely think it’s a platform that’s going to grow.”

Walt Disney World (DIS) turned to Layar to promote La Nouba, an upcoming Cirque du Soleil performance, with an app that captures the “wow factor” of the acrobatic show, says Disney’s art director, Matt Stewart. “We really wanted to take people by surprise,” he says. Now viewers at select shopping malls in Florida can use their phones to make five images of the performers appear. They might see a virtual dancer leap across the mall’s water fountain or walk on a tightrope overhead.

The campaign is too new to be credited with any boost in ticket sales, says John McCall, a Disney staff writer who helped manage the campaign. But McCall notes that the show’s online purchase page saw significantly more hits, and Cirque “was very excited about the numbers.”

This leads to one of the early lessons of AR marketing: campaigns promoting entertainment are a more natural fit for the technology. During Halloween weekend of 2009, about 7,000 people attending a New Orleans multistage musical event called Voodoo Experience held up their phones to a stage to see the lineup, the name of the current band, and an option to download the song being played. Pointing the phones toward food stands revealed the types of food served and the prices. The AR “layer” also displayed icons for restroom and ATM locations.

“We wanted to help people have more time enjoying the show and less time figuring out what was around them,” says Dave Maher, director of digital communications at Zehnder, the marketing agency that created the Voodoo and Cirque layers as well as about a dozen other AR campaigns.

The real-estate business should also be fertile ground for AR, because many people want to know prices and listing information for homes and buildings they pass by.

Paris-based real-estate agency MeilleursAgents.com, for instance, has captured attention for its Layar app that displays the value of buildings in Paris, regardless of whether they’re on sale or not. “We wanted to provide a new service for real-estate owners,” says Sebastien Lafond, the agency’s CEO. Launched more than a year ago, the app generated a lot of local buzz, but he says there’s been “no direct bottom-line impact.” That is not stopping him from moving ahead with the technology. Lafond is hoping to build a 3-D version in which browsers can view specific floors of buildings.

For that to happen, though, the GPS in phones must become much more accurate, he says. Many developers of AR apps have the same gripe: users might see text and graphics in front of the wrong real-world objects. To overcome some of those issues, wireless-equipment maker Qualcomm (QCOM) developed what it calls “vision-based” AR for phones. Rather than relying on GPS and compass information, the company is employing visual tracking software that can, for example, figure out the shape of a cereal box so that virtual objects can be placed right on it.

This fall, Qualcomm released a software development kit that programmers can use to build vision-based AR applications for Android phones; the company expects commercial campaigns based on the technology to kick off next year. “The vision-based AR that we’re offering is a fundamentally different user experience because the graphics appear very tightly aligned with the underlying object,” says Jay Wright, director of business development at Qualcomm. He says that such accuracy makes the AR experience far “more dramatic” and will help the technology become more effective in the business world.

Copyright Technology Review 2010.