Advertising and Artificial Intelligence

The total global advertising spending is forecasted to rise to $563 billion in 2019. It is such a big market that even the entire valuations of companies like Google and Facebook are based mainly on their core advertising business. How will this industry change in the upcoming years?

If a product is free it is either open source or financed by advertising revenue. If you use the free versions of Spotify or YouTube you’ll be overwhelmed by advertising. Search a product on Amazon and many of your results are advertised products. If you are flying with a budget airline such as Ryanair, your cheap flight price is partly subsidized by advertising revenue. If you read a newspaper or magazine – even if it’s digital – you’ll see ads everywhere.

In addition there are – of course – all those advertising brochures and coupons.

The advertising market is huge. But what effect will artificial intelligence have on advertising? Might personal assistants such as Alexa, Bixby, or Siri make advertising redundant?

Advertising Influences your Decisions

The whole point of advertising is to influence your purchase decision. Whether we are talking about products or services – if a company spends money on advertising it wants you to buy its products. Therefore, advertising is a huge battlefield where brands are fighting against each other for your attention. They want you to buy!

Let’s have a look how the purchase decision process will be different in the future.

AI, IOT, and the Future of Purchase Decisions

Personal assistants based on artificial intelligence are now in everyone’s pocket. If you use an iPhone, iPad, or Mac you also have Siri on your device – Apple’s smart assistant. Microsoft is your go to operating system? Then Windows 10 comes with Cortana pre-installed. Nearly all new Android devices come with Google Assistant on board. Samsung devices do now ship with Cortana. If you are an Amazon Prime member or use an Amazon Echo, you probably are familiar with Alexa.

Today, smart personal assistants are available on our phones, smart TVs, and PCs. However, in a few years, they will be ubiquitous. Your fridge, washing machine, oven, car, light bulbs, and even your toothbrush will either directly ship with your personal assistant on board or they will have sensors which report to them.

If you are running low on ketchup, your fridge will tell your smart assistant and it will order your favorite ketchup or the best available ketchup automatically.

Your AI can now browse through thousands of ketchup brands, look for the ketchup with the best ingredients and without the allergens you are allergic to. It then analyzes the customer (or AI) ratings of all options available and then weights it with you individual usage. If you use ketchup mostly for sandwiches, it will find the best ketchup for sandwiches. You use it mostly for fries? Your assistant will take it into account and you will get the ketchup with the best taste for fries.

You don’t like a specific ketchup and you throw it away sooner than usual? Your AI will notice that and it will create a quick product rating into the database.

As AI assistants will slowly make everyday purchase decisions for us, traditional advertising becomes redundant.

Now you might say, well I don’t want my AI to buy clothes or a new tech gadget for me without asking for my personal taste and preferences. But your personal assistant is already familiar with your persona. It knows what kind of clothes you look at in shop windows. It will understand your taste based on your environment and behavior. You work in a particular company and work with specific customers? This requires a specific outfit. Your friends all dress like – therefore this style might be of interest for you as well. You follow specific people and influencers or Instagram our YouTube? Your assistant recognizes the fashion style of these people and will recommend you similar products customized to you.

Conclusion

Connected devices and smart personal assistants will have a massive effect on the advertising industry. Purchase decisions will be passed over to an AI assistant.

In the end of the day, my personal assistant will weight the best product for me based on thousands of data points. Which product is the safest, healthiest, and best aligned with me and my social group?

When my AI finds with highest accuracy the best option for me, I won’t trust traditional advertising anymore. Also the AI does not care about Ads.

Soon, advertising will become redundant.