This paper deals with the topic of augmented reality and its impact on advertising and brand strengthening as part of marketing. The market and market conditions function under constant changes, and it is widely known that the unstoppable development of technology entails major changes to which it is necessary to adapt business, and thus marketing strategy in accordance with emerging trends. One of the most prominent trends in the field of creations of new channels is the concept of augmented reality, for which can be said to push the limits of the way of observing an individual so far, and thus represents a new media for advertising. The flexibility of augmented reality as a channel for delivering a message to the end consumer is applicable in advertising and branding, but also as a tool that enables achieving a competitive advantage on the market. The paper presents practice examples based on secondary data and research that support the fact of the strong growth and effectiveness of AR technology. Then, data on the progress and development of augmented reality from the very beginnings to predictions, and a view of the technology from a consumer perspective are also presented. Also, the augmented reality system is described in terms of technology and functionality, and all the components of the technology are listed. In addition to all of the above, the paper describes the challenges and obstacles that need to be solved in order for augmented reality technology to reach its full potential. The use of augmented reality for the purpose of advertising enables the user to interact directly with the brand, which increases users satisfaction and encourages loyalty, thus creating significant market recognition of the brand. This technology as such provides perceptually enriched user experiences, differentiation on the market and, ultimately, competitive advantage itself.