It’s no secret, the marketing industry is always changing. To highlight some of the changes and issues we see on the horizon, we present our Industry Mix episode series – where we challenge marketers to look and think about the road ahead. In this episode, Reid explores the rise of artificial intelligence (AI), its impact on consumer control, and the evolving role of the marketer.
"Power" shifts through the eras
Reid Carr: Through the eras, power, due to innovation, has moved through the value chain from raw materials like mining to the railroads in our westward expansion, to retail, and more recently, it has said that because the internet, consumers have the power. They have the power now because they have greater access to more choices, because they have greater access to products and services around the world, not just their local retail store. And that's true, but now that the choices have become overwhelming, power has shifted again, and we're in a new era.
Now, I argue, machines, robots, algorithms, and the companies that own them have the power. This isn't meant to scare you. We're already living some of it. Media is bought and ads are targeted via programmatic, basically, letting the machine keep getting smarter and make decisions for us. Your searches are personalized to give you better results. Your car is routed to get you places faster or to find a place to charge your car on the way to a more distant destination. Your social media news feeds are personalized to things that will suck you in and keep you engaged. Your TV and Netflix accurately delivers you shows to binge. Products are recommended to you based on what you've browsed, bought, or people who are like you and so on.
Power shifts have happened throughout history, and marketers have to adapt with every change. Think about when big box retailers took over from the local mom and pops. It changed distribution. And how did that change advertising? More, how did that change marketing? With this new shift, what are you going to do about that impending change? You're already doing some things differently. If SEO is part of your strategy and you've been doing it for more than 15 years, you've really seen a difference in how you can be successful in search. But what I'm talking about is going well past that.
The Rise of the Machines
Reid Carr: First, let me explain why I think that the machines have the power. All of this is about creating a frictionless experience to consuming media, to buying product, to subscribe. The next move in frictionless is for machines to do even more work for you, locking in the idea of automated and predictive purchasing as a mechanism for convenience and freedom. With the further development of the internet of things where your devices get to know you, your health, your habits, your conversations, devices, such as your refrigerator can get ahead of the things you want or need. For example, when you run out of milk, you can order more milk. The likelihood of that milk, a repeat purchase, ending up as the same brand of milk you had before increases because it's easy. Do you want more of it? Yeah. If you want to change brands, though, it becomes an incredible hassle, in much the same way that now going to the store or doing products search at that store is a hassle. Get in my car and drive five minutes to buy that? I'll just order it from Amazon and have it show up tomorrow. What was once an easy change, if you were in a classic retail environment, it is one brand over on a shelf, but the same exact purchase path as you're used to; same refrigerated aisle, same checkout experience now requires you to look at options you didn't have to look at before and make a deliberate change.
The Role of the Marketer
Reid Carr: So if you're a marketer who wants to introduce a new brand or get your brand into the hands of more people, how do you break such an incumbent cycle? What I contend is when AI machine learning algorithms have the power, the job of the marketer changes similar to how at every power shift in history, their job changed. The job now is, how do you make and break consumer habits? How do you get a consumer to go through the effort of changing from one brand to another when the system is typically doing the work for them?
Now, I don't have the answer precisely for all cases, but I do have ideas for a lot of cases. I think there are a lot of different products, categories, et cetera, that are going to be affected by this in different ways. One easy example is CPG products. I think that marketers are going to have to make a little drama happen, much like what we see in the polarization of media and politics, or you'll truly have to inform in a more personal way. This isn't going to necessarily be about liking a brand or brand personality anymore, like what we see with Coke and Pepsi, as much as it will be about life changes in the consumer and how a brand attaches to those changes, or further personalization based on other data such as genomic data. Once you're a Pepsi person, are you really going to go through the hassle of switching this baked system that makes your life so much easier to get a Coke? Unless something major happens. To get someone to switch, is your product healthier while the habitually purchased product is truly unhealthy? Did the other brand do something really bad that you take personally and just can't support that brand anymore? Or to get someone to add your product, what should they stop doing? What should they start doing? So in this new era where machines will purchase for us and changing consumer behavior will be a perceived barrier, marketers, as they have through history, will have to adapt.
I leave you with this: what will your category look like? And how will you help create new habits or break old ones to secure your place in the buyer's cycle? And where do your ethics fit into all of this? We need to think ahead before we're neck deep in the situation to plan out how we're going to deal with this inevitable change. So with that, I hope you have a little food for thought to apply to your situation for when the robots finally do win.
So with that, be sure to check out our show notes for this episode and more. As always, subscribe to the Marketing Remix. Leave us a review on Apple podcasts. Thanks so much.