Month: November 2024

If Election Day is the political world’s equivalent of the Super Bowl, then NBC News’ digital platforms scored a touchdown to kick off the month. NBCNews.com and NBC News Now saw their two highest days on record on Nov. 5 and Nov. 6, and also dominated the social space among the big three broadcasters. “It…

Let me begin by stating that I’m not from the advertising or marketing world. So you can imagine my surprise when I was invited to attend the Cannes Lions International Festival of Creativity to present a project to the Titanium Lions jury. I had no idea what to expect. I hadn’t even met the team…

Answering this question in the affirmative puts you in fraught company. Many have proclaimed the end of marketing before.

In a book on the cusp of the new century, maverick Coke CMO Sergio Zyman announced the end of marketing as we know it. The primary
focus on creativity would give way to a primary focus on sales, he said. But since then, we’ve rediscovered the primary place of creativity in driving sales.

Which is precisely
why, in his pandemic-era book, social media maven Carlos Gil declared the end of sterile digital marketing
based on clicks and views and the need for more human connections. Yet, digital marches on, and along the way, has invented ways of humanizing engagement.

Even more than the end of
marketing, there have repeated declarations of a marketing revolution at hand. From Robert Keith, ex of Pillsbury. From Kevin Clancy, ex of Yankelovich and Copernicus. From Michael Ray, ex of Stanford. From the one-to-one gurus, Don Peppers and Martha Rogers. From the dot-com era Cluetrain Manifesto. From old media like Newsweek and from new media proselytizers like CES. Just to mention a few.

Despite all this sound and fury, the core ideas of
marketing have endured unchanged. No end. No revolution. But maybe it’s different this time with AI. So, with a bit of trepidation and all the obligatory caveats, let me offer some
thought-starters about AI as the end of marketing.

AI for Consumers

Some clarification first about what I have in mind when I’m talking about
AI. Not what marketers are doing with AI, which is largely efficiency related. It is all about improving existing processes, channels and conversion.

AI for consumers will also be
used for efficiency. But it will have the effect of removing people from marketing and shopping. Stripped down, the consumer journey moves from consideration to evaluation to purchasing to usage, and
then back again. When AI mainstreams as a consumer tool to handle each of these steps (including things like biometric monitoring during usage), the consumer is inherently less involved.

AI will not be a complete substitute for consumers in every category or every decision, but AI will be used regularly as an assistive tool. As AI matures and improves, more and more people
will use it to save time and reduce risks. That will make AI the consumer. As I have preached since 2013, marketing in a future of smart technologies is “advertising to algorithms.” Which means an end to marketing as we understand it.

AI means an end to
consumer-centric marketing

This is a foundational concept in marketing. But it is derivative. Marketing is consumer-centric only by task, not by definition. That task is changing.

To paraphrase the late Harvard marketing guru Ted Levitt, consumers don’t buy products, they buy solutions. And thus, Levitt says, companies are in the problem-solving business.
That’s the corporate purpose. The purpose of marketing derives from that.

Traditionally, marketing has put consumers at the center because, historically, consumers did
everything—watched ads, visited stores, made decisions, assessed experiences, etc. But as consumers use AI for much or all of their shopping and usage, AI will be the driving force at every
point of contact.

Marketing will have to target AI in order to support the broader business purpose of solving people’s problems. Meaning that marketing will have to shift from
consumer-centricity to AI-centricity. A business must continue to be consumer-centric, but in support of that, marketing will have to put AI at the center.

Marketing will have to
influence AI to influence consumers. Which means that marketing will have to figure out what persuades AI rather than what persuades consumers. Consumers will always be the end users, but to get
solutions into the hands of consumers, marketing will have to be AI-centric.

AI means an end to segmentation

Part of AI’s promise is an enhanced
ability to customize offerings and communications. This is an age-old marketing ambition, so we should take a show-me approach to this. But the ability of AI to process information is exponentially
better than before, so the possibility of true, real-time personalization is finally on the table.

If AI can realize the promise of customization, then segmentation will be beside
the point. We often forget that segmentation has always been understood as a stand-in for personalized products and advertising—the best we could do for now on the road to customization.
Segments are a halfway step of customization. Not perfect, but at least a group of like-minded customers who share an affinity for a particular message or feature that is less well-liked by people who
are not part of that segment.

The narrower and more focused the segment, the better. Although with greater specificity, cost considerations eventually come into play as a limiting
factor. But if AI can facilitate affordable personalization at scale, then it means an end to segmentation.

AI will put loyalty back into the marketing
vocabulary

The debate about loyalty versus penetration as the better way to grow has settled out on penetration as the thing to do.

Penetration is a leaky bucket
idea. Customers come in but eventually leak out and thus must be won back again with penetration strategies. The bucket is best kept full with more water at the top, not with less water out the
bottom.

Loyalty is an idea about plugging the holes in the leaky bucket. But well-researched experience has found that loyalty strategies can’t do this well enough to keep the
bucket full. Only more water works, not plugging holes.

If AI succeeds at personalization, though, loyalty will need to be reconsidered. Even more than that, in many categories, AI
will be used simply to reorder. Brand choices will be repeated by AI rather than randomly made or concurrently influenced at point-of-sale. Thus, AI will maintain brand consistency. Penetration
theories presume that consumers are somewhat (if not largely) indifferent to brands, which means that AI-enforced consistency will be just as acceptable to consumers as today’s
inconsistency.

In fact, some tech-driven applications rely on consumers prespecifying preferred brands in advance. Then the AI app keeps repeating those preferences over and over.
This would completely bypass the kind of loyalty-eroding, point-of-sale randomness that makes penetration strategies better than loyalty strategies. AI will put loyalty back into the marketing
conversation.

AI will make many service businesses scalable

The knock on service businesses is scalability. Because service growth entails hiring more
people. A single person cannot be made infinitely productive, and thus a bigger service business always grows with roughly equivalent costs, not with shrinking costs.

AI changes this
equation because many AI applications can mimic the things that people do. Chatbots are one example. Financial advice is another. Annual medical check-ups are another. Psychological counseling is yet
another. Future homes built with sensors that feed data into AI systems may not require a service visit to check on the HVAC or figure out a flickering light. Same for cars.

While
service businesses will never be scalable like a digital business, AI will change the economics, thereby opening  up service opportunities. Brands will be able to roll out services and
experiences more affordably as a value-add. Follow-up care and consultation could be automated and made available.

Scalable services will enable more of the marketing for brands to
be embedded in the experience of service and usage. This will be particularly important with AI in-between brands and consumers during the shopping experience.

AI will make
mass media more important

My final thought is not so much the end of marketing as back to the future. It is to note that as consumers delegate more to AI, marketers will not only have
to advertise to algorithms. They will have to figure out how to get around algorithms as well. 

AI will optimize the match of brands and preferences. Advertising to algorithms
is about the match. Getting around algorithms is about preferences. If preferences remain unchanged, then marketers will be captive to AI. But if marketers can change preferences, AI will have to
change the match it makes.

It is easy for consumers to delegate digital media to AI, but harder to do for mass media. That’s how marketers can tell stories to change minds. As
marketers have always done.

Focusing solely on performance at every touchpoint will eventually hand marketing over entirely to AI. Which is not bad per se. But it locks in the status
quo. It is stagnant and reductive, not transformative. It reduces everything to efficiency. Again, not bad in and of itself. Just not imaginative and thus an end to marketing rather than a new
beginning.

The good news is that October turned in the 18th consecutive month of expansion for the U.S. ad market. The bad news is the month’s growth decelerated to the lowest rate — +0.9% — since September
2023, according to MediaPost’s analysis of data from Guideline’s U.S. Ad Market Tracker.

As many consumers turn to GAI technology for their holiday shopping, Cyberweek in the U.S. is expected to drive $40.6 billion in online spend – up 7.0% YoY and representing 16.9% of the overall
holiday season. Adobe expects Cyber Monday to remain the season’s and the year’s biggest shopping day, driving a record $13.2 billion in spend – up 6.1% YoY. Black Friday is estimated to reach $10.8
billion – up 9.9% YoY – and Thanksgiving Day is projected to hit $6.1 billion, up 8.7% YoY. Both are expected to outpace Cyber Monday in growth as consumers embrace earlier deals promoted by U.S.
retailers.

Berat Oguz, CEO, Playable Factory

The constant bombardment of stimuli from digital devices has caused huge challenges in capturing and retaining consumer attention. Marketers, therefore, must change their approach and adapt advertising strategies to engage with audiences more effectively.

Playable ads are emerging as a powerful solution to this challenge. They offer a far more immersive, interactive experience that captivates and engages users in ways traditional ads cannot compete. Whether used for video games, tutorials or product intros, these ads allow users to engage with content directly. According to Liftoff’s mobile report for 2024, playable ads are over 20x more likely to result in an install than banner ads. 

From the interactive nature of playable ads to their customizability, measurability and performance, marketers can reach their goals by embracing this innovative ad format.

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The group has formed an alliance with multiple sports leagues for a new campaign that will air during pro and college sports games and the Macy’s Thanksgiving Day Parade over the Thanksgiving holiday
break and beyond.

Threads has become a major contender in the social microblogging space – citing 35 million sign-ups in November, with sign-ups increasing in the past two weeks.

We’ll be off the rest of the week, so until then, enjoy your time whether you have to work the holiday or not. I’m not sure if stations still feed their employees, but my holiday memories always include late KNTV anchor Doug Moore carving up the turkey like the station dad for all of us…