The next time you buy a bottle of 7Up, hold it up to a webcam. Don’t drop the bottle if south Indian superstar Allu Arjun—also the brand ambassador of the fizzy drink—pops up on the computer screen. Now as big as your thumb, Arjun will also show off some cool moves—from freestyle to the classic Kollywood boogie-woogie.

This neat trick was commissioned by PepsiCo with the help of Hungama Digital, a 10-year-old digital entertainment company. The campaign—You Click, Allu Arjun Dance—was launched two months ago. PepsiCo created videos of Arjun dancing, and hosted them on its site. Then, it printed a code, which looked like a small black-and-white picture, or a graphic image, on 7Up bottles. This image acted like a virtual key, and allowed viewers to access the dance videos.

This is but one instance of augmented reality (AR) at work. This new technology makes marketing more real in the virtual world. It enhances a mundane environment with the help of computer-generated sensory input, such as sound or graphics.

AR presents a unique platform to showcase a latest product, or service. It also allows prospective customers to become a part of the brand, and interact with it. Take, for instance, Tobi.com, a San Francisco-based online clothing retailer. Last September, it integrated an augmented-reality application into its website, Fashionista, simulating a virtual dressing room for online shoppers.

It works like this: the customer prints out a special icon on a piece of paper and turns on her webcam. As she holds the paper in front of herself and looks at herself onscreen, the paper suddenly becomes a dress she is wearing. And an interface of virtual buttons appears to hover around her on the screen. She points her finger in the direction of the virtual buttons to go from one dress to the next. She can even snap a picture of herself in the virtual dress and upload it to Facebook to get friends’ opinions.

Closer home, Idea Cellular experimented with AR last year when it launched a month-long “Use Mobile Save Paper” campaign. It was already running a television campaign that showed Abhishek Bachchan as a tree. So, the company took that idea further—it allowed subscribers to download an AR application on their mobile phones, focus the handset on a person’s face and watch him sprout leaves and shoots—a.k.a. Abhishek Bachchan—to a background score of “What an idea, Sirji!”

AR has caught the fancy of big Indian companies since late 2010. Bengaluru-based TELiBRAHMA Convergent Communications, which offers “IntARact”—an AR service—is working with bigwigs such as Nike, Disney, Idea Cellular, HSBC and Mahindra & Mahindra. And, that’s not just due to the “wow” factor of this new technology. “It was an important innovation that helped brands break away from the clutter—and be in the limelight,” explains Suresh Narisihima of TELiBRAHMA. Moreover, the growth in cellular telephony, and the use of smart phones in particular, has helped the adaptation of AR in India—and Indian consumers seem ready to experiment. It also helps that besides web and mobile applications, augmented reality can be deployed through other means. For instance, all AR codes, behaviours, content and applications can be uploaded into a stand-alone device (such as a kiosk) at an event. It can also be used as an executable file that a user either downloads or receives free (say, on a CD bundled with a computer magazine). This allows users to get a taste of AR on their machines without going online. Similarly, stand-alone smartphone applications can also be developed.

It has its limitations, though. Performance and usability of AR depend on the processing capabilities of devices such as laptops, desktops, mobile phones and tablets. Also, “AR is mostly exclusive to smartphones at the moment. Which means that an application has to be developed for each operating system—one for Android, another for iOS, yet another for a BlackBerry. This becomes expensive,” says Rahul Dutta, head, Trimensions, a web development firm. 

Tobi.com acknowledges that the technology isn’t perfect, even though the company has received positive reviews so far. “Though the technology in its current state may not help our customers with the size-and-fit issue, we’ve received feedback that it does help them with the question of, ‘How will this look on me?’” says its vice president of technology.

And, it isn’t possible to calculate the return on investment from AR at the moment, even though it is an effective way of branding and marketing a product. Think of it more as an enhancement rather than as something ubiquitous like existing print, web and media outlets.

This new technology comes at a price. Depending upon its type of usage—mobile, web or kiosk—and duration—campaign for days, weeks or months—AR could cost from a few lakhs to crores.