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What’s the Role of Advertising When Machines Do the Buying?

By Jake Sorofman | July 09, 2015 | 1 Comment

A couple years ago, it was fashionable to suggest that earned media would be the savior of escalating paid media spending, offering welcomed relief from an addiction marketers were eager to shake.

As the theory suggested, chatty social networks and the bottled lightening of virality would carry messages to the masses and vast media empires would weaken if not fall.

That clearly never happened. In fact, what happened was just the opposite: marketers quickly recognized that earned media didn’t scale and media companies capitalized on this knowledge by turning social media into a boom, rather than a bust, for the advertising business.

Score one for paid media.

Perhaps it was never really the near-death experience that some foretold, but it did cast a pall on paid media for a while, making it seem like something of an unnecessary tax on business.

Today, the tide has clearly turned and paid media spending is more robust than ever before at $531 billion worldwide in 2015 according to Zenith.

But, for paid media, there’s another looming threat on the horizon: the rise of non-humans.

When human beings are the subject of marketers’ persuasion, advertising makes a great deal of sense. There’s substantial research to suggest that our preferences and behaviors can, in fact, be conditioned through marketing messages delivered with frequency over time.

But what happens when intelligent things and smart machines are the deciders?

It’s perhaps a crazy notion to contemplate, but there’s surely a day on the horizon when intelligent agents—virtual personal assistants, smart machines and connected appliances, for example—will make substantial purchase decisions on our behalf.

As we delegate these responsibilities to agents, the question becomes: what’s the role of advertising?

Of course, I’m not suggesting a rise of robot armies, a wholesale displacement of sentient beings in the decision making process. Human beings will continue to play a role in setting the rules for how and when these decisions are made. And, for some product categories, consumers will still want to express brand preference.

But as the role of humans becomes, in many cases, more passive than active, decisions themselves will become increasingly unemotional. For some product categories, this will only perpetuate commodization, forcing them to compete on the basis of reputation, price and speed.

Here, marketers will win, not through the subtle and subjective influence of persuasion, but through the more overt and objective influence on advocacy ratings, price competition and winning the race to the moments of truth that dictate the consumer need.

Increasingly, markets will be made precisely in these nano-moments of truth where non-humans become the arbiters of purchase decisions.

Where does this leave advertising? To me, that’s the $64,000 question.

Maybe brands—and the ads that contribute to their creation—will become even more important as they take on a new role as a “thumbs-up” shorthand for the kinds of stylistic preferences that are difficult to communicate to machines explicitly and difficult for machines to interpret on solely objective measures of price, value, features and the like.

Or maybe advertising will become a quaint vestige of less rational time—a time when human beings, emotional creatures that they are, were the primary subject of marketers’ persuasion.

Maybe paid media will get its comeuppance after all.

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1 Comment

  • Philip Green says:

    Advertising will always play a crucial role in bombarding the human minds with the promotional stuff that will encourage them to buy the things they don’t want so hard. Advertisers help developing a rough picture in the minds of humans to spend on the things which they’ve seen many times.