Unlike virtual reality, which is fully immersive and where the real world disappears from view entirely, augmented reality (“AR”) is more nuanced and enables digital assets to be layered over physical assets, like a building.

AR is a global trend which is having a significant impact on the out of home (“OOH”) advertising arena - the world’s largest digital billboard is stationed in Times Square, NY: the six-story board featuring cutting-edge technology, harnessing 3D design and elements of mixed reality. In May of last year, “The Maslow”, was unveiled, namely Africa’s largest 3D digital billboard based in Lagos, Nigeria. Here in the UK, Europe’s second largest digital billboard is sited at Victoria Warehouse in Manchester. On-building digital advertising is experiencing a dynamic renaissance where the traditional barriers of screen-size and 2D dimensions are being pushed to their very limit.

Size isn’t everything of course and what’s really capturing the public attention is the myriad of examples of 3D anamorphic displays. These billboards trick the viewer perception by presenting a 2D video but in such a way that it gives the illusion of a 3D video, all visible to the naked eye. Imagine a giant branded trainer rotating so as to appear to be dimensional and leap out of the screen towards the viewer without the need for 3D glasses; that illusion of depth is the selling point of this technology.

It’s easy to see the appeal for advertisers as traditional billboards can only display one advert at a time. It can take precious hours (sometimes days) to replace old adverts with new, whereas digital billboards allow businesses to promote a continuous stream of changing adverts cyclically. More than that, digital billboards deliver personalisation and further erode the lines between entertainment and advertising. In the metaverse, viewers have the ability to interact with adverts within a replica of the real world.

In the battle for consumer attention, truly creative designs can rely on the “wow” factor which, in turn, means that delivering a truly unique experience may only need to be sited in one physical location but will trigger the public to share the content themselves via social media accounts. This one-site approach allows the creators of the designs to focus on being as captivating as possible with the advantage of costs being allocated to one screen only.

Owners of buildings upon which these digital screens are fixed benefit from their ever-growing popularity with the income derived from these mixed reality boards delivering much higher rents. Although most screens are rented to billboard operators, ownership of the asset itself, and the intellectual property in its design, can come with its own significant value - the iconic Piccadilly Lights billboard in London is cited to be one of LandSec’s most valuable assets.

With the concept of immersive advertising evolving, and with more businesses using this technology to advertise in both the real and the virtual world, there are some challenges. Firstly, practical installation: namely securing of planning consent, the reality of any site-specific restrictions along with the construction and ongoing maintenance of the asset. Will there be a one-off capital payment or is an ongoing leasing arrangement needed?

There is a clear need for sensitivity as to location, use and content of the billboards: some sites adjacent to residential areas are subject to campaigning by organisations looking to prevent use between the hours of 10pm and 6am, to save energy and reduce light pollution.

From a regulatory perspective, critically, there are no specific laws in England and Wales relating to AR and VR. As immersive advertising combines both what is ‘real’ and what is digital, there is little choice currently but to rely on numerous existing laws (GDPR, IP and advertising to name but a few) to attempt to plug the gaps. Given the digital nature of these assets, they can potentially be accessible in multiple jurisdictions with competing regulatory frameworks meaning that virtual billboards are subject to a whole host of complex and multilayered restrictions. The growing use of AR and VR for OOH advertising highlights the need for a robust legal framework to address the specific issues that may arise as a result of this new technology.

Much in the same way that non-fungible tokens (“NFT’s”) confer ownership of digital assets, property digital rights (“PDR’s”) exist and are an emerging asset class enabling property owners to register a property’s digital rights and use in an immersive environment. Legislation in England and Wales needs to catch up, and the Property (Digital Assets etc) Bill, introduced to Parliament in September 2024 (in response to a 2023 report from the Law Commission) is intended to deliver some much needed clarity and legal framework around these digital assets.

For the moment, in the same way interests in a physical property may be registered at the Land Registry, property owners may now consider registering their interests in any PDRs on digital advertising platforms in order to protect their use and increase revenue. As the industry becomes commonplace, we will likely see more sustained regulatory input which echoes the stringent control shown by the Land Registry towards property interests, in regulating proper use of these assets.

This article was originally published in EG