AI, B2I, CI & Advertising

24 Nov,2022

 

 

By Ashoke Agarrwal

 

Ashoke AgarrwalAdvertising sits at the interface between marketing and media.

 

Therefore, the impact of technological change in the media world has had a lasting effect on advertising. Advertising’s first phase of evolution was from being a press-driven cognitive medium to the emotive resonance of the radio age. Then, in the television age, the emergence of video changed the very grammar of advertising. And now, in the Internet and social media era, advertising is trying to come to terms with a shift from being an intrusive form of mass persuasion to learning to be interactive and conversational.

 

Historically, technological changes in spheres other than media have had a peripheral effect on the business of advertising. For example, computer technology has improved studio, planning and operations productivity.

 

A new era of technological disruption is approaching with the gathering emergence of AI in its various avatars. But what will the effect of AI be on the business of advertising? Will the impact be peripheral, or will it affect the core? Two alternative scenarios emerge.

 

Like the IT age, the AI age may only affect the productivity of advertising agencies. For example, the AI age could lead to a more efficient and faster path from idea to campaign production. Creative departments could use AI-driven CGI to create photographs and videos using avatar-licensing arrangements with celebrities, influencers, and models. Strategic and media planning could use Deep Learning engines that probe research databases and Big Data to deliver more effective plans. Operations could be more streamlined with meeting memos and day-to-day communications handled by bots. The lead in productive efficiency and effectiveness that the AI age brings to the advertising business could be as high or even higher than the IT age.

 

The second scenario is when AI disrupts the very core of the advertising business. Imagine a situation where due to advances in AI, advertising as a business, if it was to continue to exist, has to sit between marketing and the individual and not as it currently does between marketing and media.

 

Marketing in the AI age could morph into a discipline which truly owns the consumer relationship. Today companies act in the world of mass marketing. So much of a company’s marketing, sales and advertising budgets are wasted on addressing consumers who will never buy their products and brands. Tomorrow marketing could shift to being the art and science of marketing the brand to an individual, one individual at a time. Let’s call it B2I marketing. A B2I brand will focus on owning and nurturing the brand’s relationship with a specific individual, individual by individual.

 

A B2I brand’s product development, distribution, marketing and marketing communication budget will be an accretion of the resources required to build and nurture the relationship with a specific individual, individual by individual.

 

The age of B2I marketing will dawn when AI leverages a slew of other technologies. Robotics-assisted flexible manufacturing technologies will enable the customization of products. High bandwidth, low latency mobile and IoT networks combined with real-time Big Data analytics will drive true customization of services. In addition, the maturing of delivery drone technologies will facilitate D2C distribution. Finally, Deep Learning engines will sit atop the entire ecosystem to build ROI across the system.

 

The brand will become, in essence, an AI entity in touch with individual customers. And marketing will shift to the next generation of the Service-Dominant-Logic (SDL) paradigm as outlined in my MxM India column dated 27th October 2022.

 

The AI brand-side revolution in marketing will also have a consumer-side AI facet.

 

As AI scales over the coming decade or two, it will develop as a “consumer appliance”, which I call Concierge Intelligence (CI). I have written about CI in my MxMIndia post on 6th January 2002 titled “The Coming Post-Digital Age.”

 

An individual’s CI will communicate with the brand’s AI in two-way, always-on, low latency, Big Data cognisant communication. The objective will be to maximize the individual’s satisfaction levels with the brand while driving the brand’s ROI.

 

The question now is if, in the AI age, marketing morphs into B2I marketing, what will become of the business of advertising?

 

If it is to exist in the age of B2I, advertising will become the art and science of always-on, customised two-way conversation between two sets of AI engines- the brand-side AI and the individual-side AI (CI).

 

It stands to reason that the business of advertising agencies will then become the business of creating proprietary AI designed to deliver the most effective communication between a brand’s AI and an individual’s CI. Brands would go to external agencies to develop this AI because of the same reasons they prefer external advertising agencies today over in-house cells – specialized expertise honed over multiple brands.

 

The dawning of the digital and social media age allows agencies to develop the planning and creative chops to deliver effective two-way one-to-one conversations with consumers. But, alas, most traditional agencies are frittering away the opportunity by delivering digital and social media campaigns that follow the time-worn principles of aiming one-way campaigns at an amorphous mass of consumers.

 

A few tech-driven marketing communication agencies are beginning to hone the technology and creative nous that will enable them to deliver the AI and two-way conversational advertising of tomorrow.

 

To sum up, the age of AI in one scenario offers substantial productivity gains to both creative and media agencies. However, in the other scenario, the age of AI could make creative and media agencies obsolete.

 

Under this scenario, marketing communication will morph into a specialised and customised AI engine that drives brand-building conversation between the brand-side AI and the consumer-side AI (CI).

 

Tomorrow’s marketing communication agencies could then very well be AI specialists. Specialists who build and operate proprietary AI customised to a brand’s AI ecosystem to interact with various types and levels of individual AI (CIs). To nurture and develop brand-to-individual relationships.

 

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