In this posting, Peter talks about the level of disruption that is occurring in the world of print as well as how augmented reality is altering how we receive and digest advertising. I have edited some of the original content but the substance is very much kept intact. Enjoy the read.
Today, less than two decades after the arrival of the Internet, Google and Facebook together command more advertising dollars than all print media on the planet.
In 2017, Google’s advertising revenue totaled over $95 billion, while Facebook reached more than $39 billion. Taken together, this number represents roughly 25% of all global advertising expenditure.
Fueled by open source e-commerce platforms, mobile devices, and advances in online payment infrastructure, social media marketing has replaced virtually the entire traditional advertising industry in fewer than 15 years. And the numbers are huge. In 2018, global advertising surpassed $550 billion, driving Google’s valuation above $700 billion and Facebook above $500 billion, all fueled by our searches, likes, dislikes, what we desire, who our friends are, and what we (and they) are clicking on these days.
But with a blitzkrieg of technologies converging on the industry, advertising will continue to change, first, by getting more invasive and a lot more personal, and then by vanishing entirely. How long will it be before the latter? Give it 10 to 12 years at the most.
Because of the convergence of high-bandwidth 5G connectivity, augmented reality eyewear, our emerging trillion-sensor economy, and powerful AI, we have gained the ability to superimpose digital information atop physical environments, freeing advertising from the tyranny of the screen.
Imagine stepping into a future Apple Store. When you approach the iPhone display, a full-sized AR avatar of Steve Jobs materializes to give you a tour of the product’s latest features. Avatar Jobs is a little too much, so with nothing more than a voice command, he’s replaced with floating text and a list of phone features hovers in the air in front of you. After you’ve made your selection, eschewing the iPhone for a new pair of AR iGlasses, another voice command is all it takes to execute a smart contract.
Next, glasses on, you head over to a friend’s house. While chatting in her kitchen, you gaze at her new cabinets. Sensors in the glasses track eye motion, so your AI knows your focus has been lingering. Via your search history, your iPhone knows you’ve been considering remodeling your kitchen. Because your smart recommendation preferences are turned on, cabinet prices, design, and color choices fill your field of vision. It’s a new form of advertising: either an extension of frictionless shopping or a novel type of spam.
The early version of this reality is already here. Known as visual search, the feature is currently available from a number of companies. Here are some examples.
All this visual search competition has kicked development into overdrive, spiking consumer adoption rates. And as more people use these systems, more data gets fed back to the AI running them. By the fall of 2018, this feedback loop pushed visual searches above a billion queries a month for the first time.
Pretty much every global brand is preparing for a world of point, shoot, and shop.
But it could get even creepier.
You’ve been spotted. You’re just out for a casual stroll through a department store, and their facial recognition system has you in its sights. Your AR glasses light up: “Hi Sarah, great to see you. . . . That’s because you forgot to change your preferences to Do Not Disturb. A microsecond later, the store’s TV monitors have got you. Maybe it’s a hologram or the President of the United States calling out your name, “Sarah, just one second. Your pores are a matter of national security. I want to tell you that your genome sequence matches a new line of L’Oréal skincare products.” If you don’t respond to POTUS, the AI switches tactics. Now it’s Mom. You flinch, involuntarily. Her voice is deeply imprinted on your brain. But you know better, and just keep walking. Sometimes it could be your favorite movie stars (based on data from your Netflix account), or your favorite sports star (based on Internet searches).
Does this sound like a far-off fantasy? Guess again.
From the Mad Men of old to the Madder Men of today, the purpose of advertising hasn’t changed: to sell you stuff. So ads extol benefits: Buy X because it’ll make you Y—sexy, successful, shiny, whatever. But what happens when you are no longer the one making the buying decisions? That’s when Shopping JARVIS comes to the rescue.
Imagine a future when you simply say: “Hey JARVIS, buy me some toothpaste.” Does JARVIS watch TV? Did he happen to catch those late-night ads filled with bright-white smiles? Of course not. In a nanosecond, JARVIS considers the molecular formulations of all available options, their cost, the research that supports their teeth-whitening claims, published client-satisfaction reports, and evaluates your genome to determine the flavor formulation most likely to tingle your taste buds. Then it makes a purchase.
Taking it a step further, in the future, you’ll never actually have to order toothpaste. JARVIS will be monitoring your supply of regularly consumed items, from coffee, tea, and almond milk to toothpaste, deodorant, and all the rest, and will order supplies before you realize what needs restocking.
How about purchasing something new? That drone your son wants for his birthday? Just specify functionality. “Hey JARVIS, could you buy me a drone for under $100 that is easy to fly and takes great photos?”
What about fashion decisions? Will we trust our AIs to choose our clothes? It seems unlikely until you consider that AIs can track eye movement as we window-shop, listen to our daily conversations to understand likes and dislikes and scan our social feeds to understand our fashion preferences as well as those of our friends. With that level of detail, Fashion JARVIS will do a pretty accurate job of selecting our clothing, no advertising required.
In the next decade, expect advertising to get far more personalized learning from an explosion of layered data and expanding into new surfaces of our digitally superimposed world.
Next, we’ll head towards a future in which AI will take over the majority of our buying decisions, continually surprising us with products and services we didn’t even know we wanted.
Or, if surprises aren’t your thing, you’ll just turn off that feature and opt for the boring and staid. Either way, it’s a shift that threatens traditional advertisers, while offering consumers a very different view of the material world around them.
The world of digital advertising in 2018 was worth $192 billion USD. Advertisers used social media and search engines combined with the tons of personal data these platforms collected to target advertising in what was slightly more refined than shotgun advertising on television.
But with the way the Web 3.0 will work and the promise of blockchain adoption with distributed ledger technologies, advertisers will find their ability to engage with consumers will be far more out of their control and in the hands of the users of the Web themselves. It will be Web users who will own and authorize any third-party use of their data and if blockchain becomes ubiquitous it will deny any third-party from being able to grab personal data or advertise to users without their authorization.
The proliferation of artificial intelligence (AI) applications that will give users greater control over the “facts” being fed them from digital news sources will also impact advertising with consumers able to filter out sellers whose unverified claims make them suspect.
For product developers, it means the merit of what they create will bear more weight than the branding and slogans concocted by advertising firms for promotion.
The development of AI, when combined with augmented reality, will further alter our relationship with the products that companies create. Wearable AI technology will make shopping in a bricks and mortar establishment an entirely novel experience. You will walk in the front door and your AI on your say so will populate the virtual environment with digital content to go along with what you see physically in front of you. Products will literally communicate their features directly to you. The product may even, upon request, provide you with more detailed functions information, tell you its energy rating, its carbon footprint, pricing options, and more. If you choose the product the Web interface will execute the sale and if something big like a refrigerator or oven, allow you to specify the manner of shipment and arrival date. Of course, all of this information sent to you will be under your control as you set the preferences for communication through your Web 3.0 interface.
Of course, if trends continue as they are, then more of your shopping will be on the Web itself rather than in bricks and mortar establishments. In this space, you will have even greater control over what content is seen by you. You can personalize every aspect of your Internet activity. With you in control of the data feed, any advertisers will be working to your terms. And for those you allow into your personal Web space, it will mean product developers will seek to improve what they sell to you based on your personal specifications. This goes hand-in-hand with the emergence of 3D printing with the ability of manufacturers to create products that specifically meet individual consumer requirements.
Consumers in the Spatial Web will be assisted by AI like never before. If you are shopping in the digital space for much of what you buy, your AI assistant will assemble over time, a comprehensive picture of what you like and what you don’t like. Even a visit to a bricks and mortar establishment will be tracked by your AI assistant which, based on your preferences, will help you shop.
Imagine your AI creating an avatar of you and then outfitting it with the types of clothes and styles you like to wear. You can then select what you like and proceed to execute an order with the financial transaction completed and delivery instructions fully automated. The AI assistant may even combine different styles that it knows are your preferences and if you like what it suggests execute made-to-order instructions to the designer who would then produce the finished product and arrange delivery.
Is this speculative or a reality. Ask Walmart who recently order 17,000 Oculus GO VR headsets for locations in the United States. The headsets aren’t to be sold. They are to be used initially to train staff, and later for customers to wear as they shop. Walmart recently filed two VR patents, one involving a VR headset, and the other a haptic glove (which gives the wearer the ability to feel an object in virtual reality). The idea is to give shoppers an immersive in-store experience even when they are not in the store. Amazon is also exploring augmented and virtual reality to enhance the online shopping experience on its site. So is Alibaba, the Chinese Amazon equivalent. And then there is the online emergence of Wayfair and IKEA who are using virtual reality applications to allow consumers to place a piece of furniture in a virtual equivalent of your living room space.
You either will love the Web 3.0 experience or hate it. But this is a good thing. You will be able to switch off what you hate and only pick the interactive experience you want. That’s something you couldn’t really do in the world of Web 2.0.
