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Will AI end advertising as we know it?

Discussion in 'Advertising, Marketing, Social Media' started by AllenCrawley, Jul 8, 2018.

  1. AllenCrawley
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    AllenCrawley Legendary Contributor Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    With 2018 projections of global advertising at $550 Billion how can anyone see an end to advertising as we currently know it?

    I just read an email from Peter Diamandis that's got me thinking. Here's the email...

    This year (2018), the global advertising industry is projected to surpass $550 billion.

    Advertising revenues have driven Google’s valuation to >$700 billion, and Facebook to >$500 billion.

    All of that is about to change.

    What if I were to tell you that the advertising business as we know it today is about to disappear... Collapse... Dematerialize?

    Let’s dive in.

    History & Perspective
    The TV show Mad Men fictionalizes the classic 1960’s Madison Avenue advertising agency, where print, TV, and radio ruled the roost and defined how companies pushed their products to the consuming public. There’s no question that when the dot-com revolution came along, few understood the disruptive impact of the tech.

    Now, less than two decades after the dot-com bust, Google and Facebook combined command more of the advertising market than all print media on the planet.

    To provide perspective:

    • Google’s ad campaign revenue totaled over $95 billion in 2017.
    • Facebook’s ad revenue reached over $39 billion over the same period.
    • Both Google and Facebook are roughly a decade old, and together they make up roughly 25 percent of all global advertising expenditure.
    [​IMG]
    Google and Facebook’s share of ad revenue. Source: Statista

    In a short 10 years, virtually the entire advertising industry has transformed into digitized social media marketing, fueled by open-source e-commerce platforms, mobile devices, and breakthroughs in digital payment infrastructure.

    In the Future, Your AI, Not You, Will Buy Your Stuff…
    The purpose of today’s advertising campaigns is to convince you to buy a certain something.

    They extol the benefits. Buy this product because… it will make you more popular, more sexy, more successful, and so on.

    What happens in the future when it’s not you making the purchasing decisions, but instead, your AI? (Imagine your own personal version of JARVIS from Iron Man.)

    Imagine a future when you simply say to JARVIS, “Hey, I’m low on toothpaste, buy me some.”

    Does JARVIS watch the TV advertising campaign filled with bright-white smiles?

    No, of course not. In a nanosecond, it considers the molecular formulation of all the options, the pricing, the published client-satisfaction reports and finally, perhaps, it also evaluates your genome to understand exactly which flavor formulation is likely to excite your taste buds.

    And then it purchases.

    Frankly, in the future, you’ll never have to actually ask.

    JARVIS will be monitoring your supply of regularly consumed items, from toothpaste to butter, and will be able to order them ‘auto-magically’ before you even know you need them.

    How about the purchase of something new?

    Say, for example, a drone your son wants for his birthday?

    In this case, you’d likely just specify the functionality that you desire: “Hey JARVIS, could you buy me a drone for under $100 that is easy to fly, and that takes great photos?”

    Even today, there are only a few things that I want to go and buy myself -- to look at the ads, do comparison shopping, and so forth.

    But what about fashion decisions? Are you going to trust your AI to choose your clothing?

    Probably not, but I do imagine an AI that listens to my daily conversations, tracking my eye movements as I window-shop, and actively pattern-matching me across my social circles. Because the AI knows which of my friends I tend to dress like, it can do a damn good job of downselecting my clothing choices for me.

    We’re heading towards a future where, regardless of the product or service category, your AI will make the majority of your buying decisions -- and this paradigm shift poses a tremendous threat to traditional advertisers.

    Conclusion
    I often speak of the six D’s of exponentials: Digitized, Deceptive, Disruptive, Dematerialized, Demonetized and Democratized. Right now, we are experiencing the dematerialization and demonetization of advertising thanks to the power of artificial intelligence and the prominence of social networks.

    But perhaps there is a seventh D… Dismissed. Meaning that companies are going to be dismissed by the consumer, who will delegate their AI to make all purchase decisions.

    At the end of the day, my AI will make purchases for me based upon fundamental metrics: which product choice is the healthiest, the lowest cost, the safest, and best aligned with my social graph.

    I will not care about any ad, and when I have my AI to make optimized decisions for me, I will no longer trust traditional ads.

    After all, do you really believe that ads are fully truthful?

    For the consumer, and for those of you in the advertising business: change is occurring at an unprecedented rate.

    Will we see this in our lifetime?

    What will this mean for Facebook, Google and the like? How will they adjust?

    What does this mean for us as the advertisers? How will we adjust?

    PS. Peter is the author of Abundance and Bold which are amazing books. His emails are excellent. One of the very few emails I'm subscribed to that I make sure to read every time. Subscription link if interested: Subscribe to Peter Diamandis' Blog
     
  2. lowtek
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    lowtek Platinum Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    When I was doing adwords management for clients, my largest account was part of Google's program of inserting ads into accounts for clients. Ads just appearing out of nowhere, written by Google.

    Google wouldn't be doing this if they didn't plan to automate it with AI. They aren't going to be hiring tens of thousands of copywriters / digital marketers, they are going to use Tensorflow (their open source machine learning framework) and their mountain of data to write the ads and perform rapid a/b testing to find the language that gets maximal CTR (and hence maximum profit for them).

    We also already know that Facebook has manipulated feed content to measure the impact on its users' mood. This data wasn't acquired out of scientific curiosity. It was almost certainly acquired as part of some larger overall plan of rolling out automated ads. Of course their ads are more sophisticated, so I think this is further away than for Google, but it is certainly coming. I'm on record predicting that Facebook is using the front facing camera to watch your eyes as you scroll through the feed.
     
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  3. AllenCrawley
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    AllenCrawley Legendary Contributor Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    "We’re heading towards a future where, regardless of the product or service category, your AI will make the majority of your buying decisions -- and this paradigm shift poses a tremendous threat to traditional advertisers."

    The article predicts that AI will develop to the point that it will actually place orders for you. You will not place orders, your AI will. If you are not making buying decisions there will be no need for ads. You tell JARVIS to purchase a cordless power drill under $200 that has lots of power and great reviews. The AI will not rely on ads but rather reviews, price, your social graph, etc.

    "At the end of the day, my AI will make purchases for me based upon fundamental metrics: which product choice is the healthiest, the lowest cost, the safest, and best aligned with my social graph."
     
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  4. lowtek
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    lowtek Platinum Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    My bad, I didn't read through the spoiler in its entirety.

    Guess the docs were right when they said growing up watching T.V. will ruin your ... SQUIRREL!

    I have mixed feelings about this. On the one hand, it would greatly simplify some mundane purchases, but I can see some messy feedback loops. What would happen if the AI creates a monopoly in an otherwise competitive market?

    How accurate would reviews be in an era where AI does the choosing for us? People have a tendency to rationalize choices to conform to social standards. If the standard is that the AI knows best, well then how likely is it people are going to leave negative reviews? Once the reviews become positively skewed, will the algo designers have to go back to the drawing board to redo the feature engineering?

    The best part of a large purchase is the anticipation. Would the introduction of an AI that does the research and decision making for you, sterilize that element of the process? Would it result in less emotional attachment to ones' purchases and therefore drive down consumerism?

    How would this affect buyers remorse? Will consumers feel more or less of it when the AI makes the decision of what to buy?

    How would the AI handle new products in a market with existing competitors? I can see this becoming a large barrier to entry for deeply entrenched corporate interests. In fact, I'm guessing this would be the major driving force in its development and deployment. If the algo is effectively blind to upstart products, then that's just an additional barrier in a new product achieving mass market adoption.

    How would it handle truly disruptive products that create an entirely new market?

    I suppose the devil is in the details with this one. From my own experience with recommendations engines on platforms such as Netflix and Amazon, I don't have high hopes.
     
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  5. Lex DeVille
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    It makes sense to me. Seems like it follows a natural path in regards to where AI is headed. There's a good chance this will happen in our lifetime. Not likely within the next 10 years, but it is possible.

    Right now we're starting to see more personalization in advertising. Everything is more specific and more tailored. When someone opts into an email newsletter, they may not realize they're getting automated messages for days because of how personalized they've become.

    So first we have advertising.
    Then we have personalized advertising.
    Then we have super-personalization that makes every ad unique to the viewer, even when more than one viewer sees the same ad at the same time.
    Then we have no more ads because AI knows exactly what we want and seamlessly delivers it.

    The first 3 have already happened or are happening right now. The last part is pretty far off because it requires a major shift in how people think about how, why, and what they buy.

    Perhaps a fifth stage occurs when AI doesn't have to purchase goods because the entire system has changed. All of our needs are met so fast and so cost effectively that goods are free and the monetary system as we know it finally ends.

    It's a shocking way to think about the future, but by the time we reach that point it will probably seem obvious and natural. We'll live in an entirely different world from the one we know today.
     
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  6. Lex DeVille
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    I'll look to the next 3-5 years for now. Big changes will come eventually, but if we go too macro we lose sight of what's working now, and also what will work tomorrow.

    A lot of the businesses of today may not exist in 10 or 20 years. Maybe the answer is just to be flexible and create businesses that can adapt quickly and integrate changes as they arrive.
     
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  7. Akeem
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    Personally, I think Peter is entirely correct. It may not happen exactly as he has described but it sure as hell will happen. Both tech giants know this but there's nothing they can do other than to prepare. Just like the fat slobs that got wealthy from oil and started attacking Tesla with their electric cars, the tech giants will more than likely do the same, at the end of the day this so called AI will be a threat to them and their business. If not, they'll make sure you don't see ads which promote the idea of the JARVIS AI. The reasoning is both obvious and clear, if you switch, their profits sky rocket backwards.

    The damage and disruption a JARVIS AI could do to both tech giants is enormous but I'm almost certain Google is already well aware of this 'concept'. I wouldn't be entirely surprised if Google becomes the company behind the AI, ensuring their ads are what affect the 'AI' choosing ability. But hey, that's just my opinion and the last time I checked, I wasn't running Google.

    As for Facebook and the disruption it could cause to their business, well, let's just hope they're good friends with Google and that Instagram and WhatsApp can survive the impact because as we all know, Facebook lives off of advertising, plain and simple. Once the people go, so do the advertisers, then the investors and then that's the end of it.

    EDIT: All this is just my opinion, I've tried to keep it as elegant and straight-forward as possible, setting aside all the statistics and what-not.
     
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    That's an interesting perspective, and in my opinion a credible one. However, I think this will be more pronounced at the private consumption level, and not the business consumption level. It will be an exponentially longer timeline before organizations can adapt this purchasing model, so entrepreneurs worried about being neglected by the cold AI screen should consider selling to business if it becomes an issue.
     
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  9. rogue synthetic
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    I always find this kind of prediction cagey.

    I don't mean that he's wrong about the trend-line. He's very probably right that this is the way things are going.

    This kind of prediction always assumes that there is a radical transformation in one thing while nothing else about the fundamentals changes with it. If we assume the prediction itself is true, there are going to be tremendous second-order effects in the economy and in the culture.

    Can we still take the existence of a consumer-oriented roughly middle-class lifestyle, in the numbers required to support that kind of consumer-oriented economy, for granted if the scenario plays out? Is buying stuff still going to be the real application, or the real worry, if that kind of cognitive labor is freely available?

    I don't think he's exactly wrong, I'm just wondering if the worry itself isn't misplaced.
     
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  10. AlessioLC
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    AlessioLC Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Imagine a kind of Monopoly AI owned by Apple, which buy anything you need automaticly.
    All the brand which were on Facebook Ads or G.Ads, now they are paying Apple to let the AI choose their product before the competitors (paying more and more each time to be choose by the AI).

    Do you think in the next 5/10 years the Social Media Marketing Agency will be useless ? Or maybe 2/3 years ?
    I mean, i already see some plateform which are doing SEO / Ads automatically so it has already started, slowly but surely.
     
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  11. eliquid
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    I for one welcome this.

    I have been planning this out as a SaaS for a few years now and will be ready for it and ahead of the curve against all these other "tools" and "competitors".

    Things are still under wraps so I can't let the cat out of the bag.
     
  12. Fastlane Liam
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    How would the AI determine your product is the best?
    How does this work for products you don't know exist/knew you wanted until seeing the advert?
     
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    msufan Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    And aren't there tremendous pressures for the AI to be incentived to pick a certain brand? Maybe the new "marketing" could just be AI bribing?
     
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  14. Xeon
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    I hope this doesn't happen. What's the point of living life if the AI decides what I like and then buys for me? I might as well not live life!

    You might as well go for Cryopreservation and become a living dead while your AI talks and flirts with your wife's AI, your AI drives your car for you (zero humans in the car), and your AI plays with your dog for you (the dog will have a chip in their brain).
     
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    AI will change the world for sure, it is right now while making things easier and quicker, however for these kind of task i'm not sure.

    Multiple plateform has bet on it and created fully functionnal SEO / Ads SAAS and it seems to work well
     
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    there is no way in hell ima gonna give an AI access to my $$$
     
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  17. Lex DeVille
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    If you can't find a point living when AI plays a larger role in the buying process, what's the point living right now? You think you make your own buying decisions today that aren't influenced by AI?

    You only deal in cash? ;)
     
  18. Xeon
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    There's a difference : my buying decisions today might be influenced by AI (you're referring to Google/FB ads?), but at the end of the day, I'm the one making the final decisions, not the AI deciding to buy for me. I would like it to stop at this though. AI is cool and all, but the moment it takes over my decision making, it's not fun anymore.

    I belong to the camp that thinks that there should be a limit to AI and AI should not take over human jobs, making majority of folks (seems that some positions like junior accountant roles can actually be automated) jobless. I'm uncomfortable with where AI is heading, to be frank.
     
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    i hear you brother, but here in scandinavia automation and AI are making their way to the main threshold. Nobody wants to pay 20Euro an hour for normal tasks (Not even menial jobs even regular jobs like airport attendants etc) thus it is here to stay. nobody wants to pay people employees anymore and thus this is the norm. Unless you can reverse the deadly sin of greed, lots of jobs will be lost to AI and automation in the near future. This just shows that there is an infinite supply of human beings but no demand; thus the struggle will ensue for those that don't adapt nor keep up.

    With skilled jobs like accounting, this too has already taken into effect in germany. Companies like Allianz (an absolute monolith in the insurance and banking world) are now beginning to realize that they need to overcome and adapt or else they wil fall behind. THus investing more resources to advancements in automation AI accounting and actuary personnel.

    THe only thing we can do is figure out what problems the companies or the world let alone has when they migrate from human to AI-automation in the various realms. PRoblems will definitely arise. No transition of this calibre wil be smooth period. THere will be opportunities that come from this new world train of thought.
     
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    Most people would be, if they understood the direction things were going.

    Let's stop here for a minute. Can you think of any time in history when people said "there should be..." and that by itself created a real change in the course of events?

    Not really. Even idealistic activists had to organize and put pressure on the levers of power.

    Believing in principle doesn't mean anything when behaviors don't match.

    Lots of people are sacred of AI and mass surveillance and the loss of freedom, but strangely that does no thing to stop them from spending 90% of their waking hours plugged into a smartphone, gorging on Netflix, ordering drone-delivered Amazon, and having most of their thoughts downloaded into their brains from social media. The economic lure of lower wages, or no employees at all, is even more seductive.

    Cheap dopamine hits and a lack of any sense of purpose in life makes ideas real cheap. Hard economic numbers translate into competitive pressures and strong incentives to develop and use automation.

    Most fat guys know there should be a limit on their calorie intake and most all of them are still going to be fat in 5 years.

    Now imagine this taking place at a civilizational level.
     
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    I would love to hear more POV from you guys on this, it's an interesting subject, would you let AI do entirely the work, or allowing it to help your decision ?

    Would you use SAAS solutions instead of external businesses (think of marketing/communication services in a business)
     
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    Let me introduce you to Ray Kurzweil

     
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