New Thinking

The future of advertising: Personal and contextual on all touchpoints

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A future with fewer screens is not only imminent—it’s necessary for our future happiness.

Typing on tiny keyboards is tedious, push notifications and ad interruptions are annoying, and social media’s endless scroll is overwhelming. A number of research papers have linked rising rates of depression and anxiety to increased screen time and social-media use. A feature in the September 2017 issue of The Atlantic asked whether the smartphone had destroyed a generation. It was a rhetorical question. As one teen told writer Jean M. Twenge, “We [don’t] have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”

Fortunately, for humanity, emerging technology is making it easier to reduce the amount of screen time in our lives. Adoption rates for digital voice assistants like Alexa, Siri and Google’s nameless competitor are skyrocketing, allowing consumers to conduct vocal searches for things they would have historically consulted a screen for. Smartwatches and some wearables can filter important notifications from less-important ones, allowing you to go about your day without proactively checking your phone for that email you’ve been waiting on. And, as artificial intelligence—particularly machine learning and deep learning—becomes more consumer-oriented, technology will become a more seamless part of our lives, rather than a device we must consult.

But these advancements will pose a major threat to advertisers, who have invested heavily in screen-based digital marketing. The global advertising industry spent nearly $500 billion in 2016, according to CNBC. The abstract of a recent report by Forrester titled The End of Advertising As We Know It opens with a provocative statement: “Society doesn’t need advertising like it used to.” The report predicts a rapid divestment in display advertising—which, according to the report’s authors, “never worked like we pretended” in the first place. Abysmal click-through rates are a testament to that.

All of these factors add up to what can only be described as a monumental shift in advertising. Existential questions loom like dark clouds: How can advertisers not only harness such a deeply fragmented consumer market, but also turn a profit in it?

From personalization to contextualization in advertising
Personalization is often heralded as the future of technology and customer service.

The promise of personalization is that ads will be so precisely targeted at consumers that the marketing experience will seamlessly blend into their lives, revolving completely around the individual. “Advertising will be so unobtrusive that if, for example, you’re on your favorite platform, you will only see what is 99.9 [percent relevant to you]. That could be really good or really bad depending on how you look at it,” says Gerd Leonhard, a futurist and the author of Technology vs. Humanity, noting that such an approach could easily veer into manipulation of both the consumer and their understanding of reality.

A key component to making personalization less obvious is contextualization—something that the advertising industry continues to struggle with. Yet, without context, personalized ads are a crapshoot. Consumers generally don’t want to be marketed shoes in a flashy display box while reading news about a natural disaster or terrorist attack. The inability to read the room before serving an ad has contributed to growing rates of banner blindness and ad blocking. Knowing when and where it’s appropriate to market those shoes will be the next frontier for advertising.

“If you see an advert on the Internet that has no relevance to you as a user or the content you are reading, it’s a wasted opportunity,” says Richard Brindley, the chief information officer for UK ad agency Vibrant Media. “Relevance and context is key when it comes to immersive advertising.”

Vibrant’s founder detailed what immersive advertising is in a recent Global Marketing Alliance blog post. Augmented reality (AR) right now can act as an on-demand companion to non-digital ads. For instance, this video shows how looking at a fashion glossy through a phone screen can take readers online to buy the featured products. At the moment, viewing experiences are tied to phones, apps and headsets, but in the future they may appear as holograms, which will require strict ethical and safety regulations. As such, AR may always be an experimental and niche form of advertising.

What’s more likely to happen is that AI will shape our advertising experiences. AI, which can parse massive datasets with unbelievable speed, is being integrated into more and more consumer technology, particularly voice assistants and chatbots. Our adoption of technology has advanced to the point where the personal data that online companies have been dutifully gathering for years can finally be deployed in real-time settings.

This holds unforeseen potential for advertisers. Ads can be programmed to automatically display only relevant material to viewers—which could mean fewer, but far more useful and experiential, ads. And, as the quality and centralization of data improves, they will only become more precise.

Additionally, coming data-protection legislation in Europe will only augment the importance of contextual advertising, notes Brindley.

How AI will shape relationship marketing
Data personalization isn’t just about quick sales and influencing people. At a time when cord-cutting and ad-blocking are routine, and digital oversaturation has pushed consumers’ attention spans to their limits, it’s becoming incredibly difficult to actually capture people’s attention—even with untold volumes of data, expertly executed ad content and exponentially increasing ad spend.

This struggle is compounded by the likelihood that people will eventually seek out ways to reduce screen time in their lives. If and when that happens, we won’t become completely untethered from technology; rather, we’ll use other forms of digital communication like voice assistants as Internet access points.

As renowned marketing pioneer Yoram (Jerry) Wind and co-author Vijay Mahajan wrote presciently in 2000: “We talk now about marketing as if it were a hunt—‘targeting’ consumers. We may need to shift to more of a gardening metaphor—‘nurturing ecosystems.’”

Those ecosystems comprise an enormous number of touchpoints, and it’s precisely through those touchpoints that advertisers will succeed in reaching people, says Wind in a phone interview. “Consumers rely less on traditional media and more on call-center interaction, friends, family, their community.”

This idea forms the basis for Beyond Advertising: Creating Value Through All Customer Touchpoints, written by Wind and Catharine Findiesen Hays who, together, run the Wharton School’s Future of Advertising program. The Touchpoints book, which is an extension of the program, provides advertisers with a roadmap on how to reach increasingly empowered consumers, handily abbreviated as RAVES: Relevant, actionable, valuable, experiential and shareable.

Leveraging people and their networks is perhaps the only way forward as consumers become more skeptical of companies, Wind continues. “We know consumers don’t trust companies. When you look at it objectively it [makes sense] because a lot of companies violated the trust of consumers.” Social media has facilitated the development of these ecosystems and communities, creating an environment where people rely almost exclusively on word-of-mouth to know what’s good and what’s not. This helps explain why influencer marketing has recently become popular, and may also explain a future where bots become part of that trusted community.

At the same time, notes Hays of Wharton, modern consumers tend to look at brands holistically rather than evaluating them on a single ad. Rather, companies will have to re-examine what role they really play in people’s lives, and how they make the world a better place with their products or services—finding their north stars, as Hays puts it.

And, once they’ve located those north stars, the challenge then becomes how to accurately predict or react to consumer tendencies, then deliver what people want, when, where and how they want it. “That goes beyond a screen,” says Hays.

The better our technology gets at understanding us, the more people will trust it to provide suggestions. The Internet of Things is a particular area where this kind of curatorial approach may play out best; for instance, a fridge that can advertise local sales and order groceries, a software-enabled car that offers discounted downloads for premium add-on services or, as Amy Kean, vice-president of strategy and planning at Beamly (beauty-products manufacturer Coty’s in-house agency), suggests, a smart mirror that can suggest a new accessory or item of clothing that will blend in seamlessly with your wardrobe.

“[These machines] would get served thousands of messages a day. Because the AI knows me, it will filter the messages and just serve me three that are relevant to me,” says Kean. “In the future there will be a middle man, and that middle man will be AI.”

A human touch
AI will help facilitate a return to the basics when it comes to mobile advertising. Right now, says Kean, the Internet is plagued by poor-quality mobile ads. “You’re following them around the Internet relentlessly because they visited your website once,” she remarks. But in order to pass AI’s relevancy litmus test, advertisers will have to make sure their products are actually useful to, and wanted by, the user. UK clothing retailers Net-à-Porter and TopShop do this well, notes Kean. “They just show you a product, then take you to buy it. There’s no fluff.” In the future, she continues, we may see more ads like: “You need a lipstick? Here’s five, here’s a retailer where you can get it.”

Kean also predicts better usage of programmatic advertising. She points to a programmatic campaign done by Cornetto that allowed users to send personalized notes to their loved ones. “I thought that was a really lovely, interesting and creative way to use programmatic,” says Kean.

AI will be massively important to advertising, but it isn’t the be all, end all of the industry. In fact, our senses of humanity, responsibility and empathy will be key in developing trust between brands and consumers. It’s not enough to hire someone with millions of Instagram followers to hawk a product, notes Wind of Wharton’s Future of Advertising program. “You have to be authentic.”

To do this, Wind says companies should align themselves with the objectives of consumers as people, and not merely as consumers. Millennials are interested in addressing society’s problems, Wind says—which is why they like give-back campaigns such as eyeglasses company Warby Parker’s buy a pair, give a pair program. That kind of cultural alignment will be an integral part of brand advertising, says Brindley of Vibrant Media: “Brands will begin to think less about themselves and more about how they align with people and culture to create valuable experiences.”

Putting humans back at the center of advertising represents a massive sea change and will require new rules of conduct.

Short-term financial pressures are forcing companies now to develop technology first, ask questions later, but that won’t be sustainable as more elements of people’s privacy get wrapped up in the personalization whirlwind. Facial-recognition and voice-recognition software are areas where this battle will likely be fought. “[We need to make] sure there is an ethical underpinning to what’s done with that information, and how it’s used to serve people and provide value to people, rather than take advantage of them,” says Hays.

And, as futurist Gerd Leonhard mentioned, personalization could easily turn into manipulation: Manipulating what people are exposed to, manipulating their personal networks and even manipulating their understanding of the world. “The market will not self-regulate on this because the money is gigantic,” Leonhard cautions. Because of this, external regulation will likely be needed to protect our data—and our sense of reality, he continues. “Advertising has to become valuable in its own right, without being completely George-Orwell dystopian.”

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