• by Chuck Martin , Staff Writer, December 26, 2012

For several years, Augmented Reality (AR) has seemed like a mobile technology looking for a place to happen.

While aiming a phone camera at a building and seeing all the associated information about the building appear on the screen in front of the image could wow the mobile-initiated, the business case and associated revenue stream remained elusive.

I recently sat down with the leadership team of augmented reality pioneer Layar at its headquarters in central Amsterdam to review the state of augmented reality as a business.

Layar was founded more than three years ago, leveraging the compass in Android phones. “It was this idea of actually plotting over the camera image the locations that are around you in the right position because we know where you are pointing the phone,” says Dirk Groten, CTO of Layar. “That’s how Layar started.”

The initial business focused on real estate, targeting houses for sale in Holland. “You have signs on every house for sale but when you actually want to know more about how much it costs or how it looks from inside, you just take your phone, open Layar, point it to that building and you’ll see a dot and you just open it,” says Groten.

But those were the early days of AR. The next evolution used camera recognition, bringing Layar to its current focus on traditional media, augmenting the reality in print magazines.

“For us, media companies are more interesting to sit down with,” says CEO Quintin Schevernels. “They reach out to the agencies or the brands and advertisers to embed in the advertising.”

The company views magazines as a communication medium that is desperately in need of help -- at least from the publisher’s viewpoint.

“Print is maybe not a dying industry, but in very big trouble,” says Groten. “For at least the next five years there will be a lot of innovation in how to connect users that are actually reading something to all kinds of content that’s online.”

A magazine using Layar’s AR app typically notifies readers early in the publication of pages with a Layar call-to-action logo. Holding a phone over a page can quickly provide additional pieces of information relating to what’s on the page.

Layar views the magazine publishing industry as the prime AR target at the moment. “For doing business in AR, magazine is the big area,” says Groten. “People are willing to pay to create that content, and they are willing to pay quite a bit, so that is where the money is currently in AR.”

Other AR apps are moving along similar lines. For example, a reader of the December issue of InStyle magazine can open the Blippar AR app and by pointing the phone’s camera to a page, see one-tap Buy Now buttons over each of the items for sale in the magazine’s Gift Guide section.

While the early AR was intriguing, it didn’t bring many repeat users or significant business revenue. Layar says 27 million people downloaded the app but there were only about three million active users. Hence the move into augmenting magazine content.

Layar created a self-service platform for publishers and estimates that of the readers who scan, up to 50 percent click on one of the buttons, with two to 10 percent of readers scanning.  “It’s a low cost, low effort, easy entry point,” says Rags Vadali, VP, product development at Layar.

Layar and other AR companies may likely get back to augmenting more of the reality around us once they start running again. In the meantime, they will more likely walk -- by working to bring magazines some new life.