AI is the Beginning of the End of Advertising as We Know It
AI (Artificial Intelligence) won’t just start appearing one day like an all-knowing computer Genie in a lamp-shaped cloud, but you’ll be surprised and amazed at how it is currently and will continue to surface in subtle ways that will change many things including entire industries and how you buy their products and services. Some things we have to purchase to survive in the modern world take research, study, and comparison and are generally hard to get good, accurate, and relevant information on so we end up picking arbitrarily or by copying what people we know did. I’m looking at your auto insurance, cell service, automobiles, and computers to name a few. AI won’t be one big thing in our lives, it will be thousands of little things. They won’t usually manifest themselves in an all-powerful central role like Alexa or Siri, they will be an invisible army of nameless extras hardly noticeable in the background and yet essential to almost every scene of our lives.
They say you should shop around for new auto insurance every six months. I don’t know about you but I do not. It is a rabbit hole of what feels like wasted time as you can either fill out different forms with the same information ad nauseam or go to one of those sites that shops multiple carriers for you. The problem is you have to ask yourself how these sites make money and once you come to the conclusion that it is some sort of commission from the carrier you sign up with, it becomes obvious that their incentives do not necessarily line up with your interests. It is entirely likely the results are skewed more toward higher commissions than better coverage. It is not likely to factor in customer satisfaction in an unbiased way, if at all, and would be incentivized to recommend increasing aspects of your coverage versus decreasing based on less statistical need. It’s just easier not to do all that to just feel like the money saved may not be worth dealing with a sketchy company.
Every football season I temporarily re-enter the world of TV commercials. Every year I am amazed at how often I see the same commercials from the same companies again and again and again and I have to wonder how much of the premiums they bill go to pay for them. What if, instead of picking a new company based on the catchiest jingle or cutest reptile, you could go to a site, and for a nominal fee have your specific situation analyzed, with only your interests in mind, and get a list of choices with pros and cons bulleted underneath. One day we’ll have personal assistant AI that will constantly be shopping and comparing and looking out for us but that’s a ways off yet. For right now, would you pay $20 for a comparison if you knew it was unbiased, your information was (for real) safeguarded and anonymized, and there was a guarantee to save you at least $20 a year or it was free? Sign me up.
AI won’t be one big thing in our lives, it will be thousands of little things.
I am not aware of such a service as of this writing, but that is the sort of applications and businesses that will be built off of the emerging AI APIs (Application Programming Interfaces) like ChatGPT in the next phase of this new paradigm. The current phase is about awareness and interest to get people playing with the tech and thinking of business opportunities. Once those opportunities go from thought to fruition and logging hundreds or thousands or millions or billions of API calls the owners of the AI will start printing money and then the race will then be really on. Competition will spring up and it may look like the search engine race all over again. OpenAI LP, the company behind ChatGPT, may very well be the Alta Vista in this race and maybe we may not have yet seen the Google Search of AI which, ironically enough, could be Google.
That’s all well and good but who knows how the AI will be delivered. What we do know is that a certain level of AI has arrived and it will only get better. Historians may look back at 2022 as a turning point year for technology and society like the launch of the iPhone in 2007, the emergence of the internet in the 90s, or the IBM PC in 1981. We may be at an inflection point the size of which can only be grasped with time and perspective. Or not.
Meanwhile, once the insurance shopping experience described above becomes reality with the business incentives aligned with your interests and compensation coming from the shopper instead of commissions, a whole new category of AI shopping assistants will come into being. For insurance companies, that means they will have begun the march towards commodification as more and more people use the AI and the AI would rate the company on a handful of key metrics such as price, customer satisfaction, and whatever other things that are available and/or deemed important by shoppers. At that point, the companies would start to diverge into the companies that chip away at inefficiencies and drive to win the AI-wielding shoppers and the others who, much as they do today, spend ridiculous amounts of money putting their names on things that older, AI adverse eyes may be looking at.
The possibilities are endless when you start thinking about AI as being a hyperspecialist instead of a generalist
An AI may do a categorical analysis of the shopper to determine what underwriting bucket a given shopper would fall into as the basis for the comparison. Another AI-based service may do data analysis on the shopper to let reality, as seen in the numbers, be the basis. For example, let’s say you want to shop around to see if your cell phone plan is the best deal for you. You could shop around online but you would have the same questionable incentives issue that insurance comparison wrought. You are left to accept a possibly shady chart, probably created by one of the carriers you are comparing, or do some data mining of your own. What if instead, you could upload the past year’s worth of detailed cell phone bills and use your usage information by line, by type (text, data, phone), and by the time of day to determine what plan from each company would be the cheapest and marry that to other metrics such as customer satisfaction and whatever else? What if it could plug into your phone and search your geo data to determine exactly where you were for each phone interaction and factor signal strength and data transfer rates into the equation?
What if instead of Ts&Cs (Terms and Conditions) detailing how they were going to own and then sell your information there was an NDA (Non-disclosure agreement) saying the AI company can’t disclose any part of your information? What if you had an AI lawyer on retainer that scanned the legalese of every site, service, piece of software, and purchase you were in the process of doing and offered advice in milliseconds? “Excuse me Ma’am, if you buy that app you have to agree to let it save and use your text messages forever.” What if it could advise you of the IP (Intellectual Property) implications, if you want it, of uploading a picture or creating a meme, or copying and pasting text? What if by law you enjoyed the same Attorney-client privileges?
What if you wanted a new laptop? There is almost no way to be an informed buyer when comparing processors and other computer components and even if there were a straightforward chart, you would still be guessing as to how much RAM you needed combined with how fast a processor is and how important bus speed is and on and on. What if, for a $20 fee you could download an AI agent that not only made a note of all the software present on your existing laptop and inferred a usage history based on available data? What if that AI could sit benignly in the background for a few days and did a behavior analysis looking at what software you use, when you use it, how you use it, what else is running while you use it and the rate of data flow from your actual Wi-Fi to then use to determine the best Laptop for how you compute at the best price and other metrics such as reliability and whatever else is important to you?
You could have an AI analyze every purchase you are considering to evaluate it against your specific values which it knows in detail. You would know instantly (where data is available) whether the product was made with child labor, whether fair wages were paid to its workers, what the carbon footprint is, and on and on. The possibilities are endless when you start thinking about AI as being a hyper specialist instead of a generalist. We tend to think in terms of Hal, Skynet, or Jarvis instead of the best life insurance agent on the planet who will work for pennies, doesn’t work on commission, and will have the best-personalized options for you in seconds. Having an assistant with a personality that can do everything for us is cool and will happen someday but right now we need to think in terms of an army of bland boring unseen helpers who can only do one thing but do it very well.
Historians may look back at 2022 as a turning point year for technology and society like the launch of the iPhone in 2007, the emergence of the internet in the 90s, or the IBM PC in 1981.
Companies will have some hard choices to make soon. Marketing departments in some industries will have to fight to justify their existence as lean-upstart companies focus all their resources on the best service or product at the best price. The fight for eyeballs is about catching the attention of silly meat bags who like shiny things, are lazy, and make impulsive decisions. The fight to capture the recommendation of the AIs will be about quality and efficiency and will transform the world’s economy into a lean machine of optimized production. We’ll spend less money to get greater value and way less time getting what we need. AI can and will remove the layers of hidden costs buried in the price of everything we buy and will reveal the best value as well saving tremendous value that can be used for other things. From here forward I will watch football waiting for the commercials to see which companies are still full of bloat and waste, clinging to the outmoded appeal to meat bag eyeballs rather than AI algorithms.
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By the Author of- Plato’s Dream: Crisis of the Employment Singularity
