It's a common misconception that Augmented Reality is purely related to location-based services and compass-driven applications. That's not actually the case because the “reality” which is being referenced is only for fixed objects such as buildings. It relies on the fact that Big Ben isn't going to move ten kilometres down the road. The actual origins of Augmented Reality in a real world environment go back to its use by the military. Augmented Reality technology was used to recognise objects in, say, a fighter aircraft's field of view and work out what they are and whether or not they are threats. In essence, Augmented Reality identifies moving targets.
You may also have seen other erroneously-labelled references to Augmented Reality in magazines such as “Esquire” with Robert Downey Jr perched atop a hideous black and white square (this is known as a “fiduciary marker”). This rather well-publicised example also isn't Augmented Reality. The reason is that you are actually manipulating the reality you are trying to identify.
A true Augmented Reality application can be taught to recognise an image, a human face or a real world object. In essence, if you can teach such an application to recognise the front cover of product packaging, you can use it to unlock premium content or enter someone in to a competition because they have a proof of purchase.
The traditional print-based promotional techniques such as overprinting with unique codes are comparatively expensive and not always that easy to control and track. Using Augmented Reality, everyone gets the same packaging as before. There aren't any inserts, or unique codes. The packaging is the code.