Illustration by Creative Unit.
As a consultant at Google, I am in the privileged position to have a front row seat in the unfolding, fizzing and frothing spectacle that is the digital revolution. What can I report from my vantage point on the big trends of 2015?
The Big Data revolution continues apace
Smart brands are increasingly using programmatic buying to target customers – this is driving down costs and increasing response rates. Google Adwords was the first Big Data targeting idea. Programmatic is the second. In principle this is not new. Since database marketing was invented in the 1970s marketers have been pursuing ‘consumer receptivity’ – reaching the right person, at the right time, in the right place with the most relevant message. That said, the cost savings and improved targeting are now clear from buying programmatically. The next phase of Big Data involves the application of machine learning (Artificial Intelligence) to improve performance, and even anticipate what people will want. In fact the AI revolution is already with us. It is how post offices read dodgy handwriting on letters, Facebook does facial recognition and Google continuously improves its search engine.
Do you want to be targeted?
Data driven targeting has been oversold since its inception in the 1970s. And that may still be true today. At its worst, you have the sensation of ‘being pursued across the internet with commercial messages.’ I recently spent a week in Berlin and I no longer need flights or hotels or travel insurance. But
I am still being targeted. This is mildly irritating but I am unlikely to disable the cookies that make this possible. I doubt there will be a mass rejection of commercial messaging as most people understand and accept that advertising is how free services are funded. Yet consumer acceptance of being targeted with commercial messages depends on an understanding of mutual benefit. Publishers and brands will have to be more transparent to maintain confidence.
Artificial intelligence: dream or disaster?
We got very excited about AI in 2015, partly stimulated by the publication of several good books about it this year. AI holds out the prospect of machines that learn and adapt without human intervention, which has certainly set imaginations racing. Will machines go out of control like Hal in the 2001 film,
A Space Odyssey? A dystopian vision foresees the mass replacement of clerical and administrative jobs (before new jobs have been created), resulting in unemployment and social unrest. Stephen Hawking no less has warned: “Success in creating AI would be the biggest event in human history. Unfortunately it might also be the last unless we learn how to avoid the risks.” Utopians, on the other hand, see much drudgery being removed by Intelligence Augmentation (IA), which will improve but not replace humans. Supported by machines, we will perform services better and be more reliable: No sick days or off days for the machine. At some point in the next decade machine learning will enable self-driving cars to escape Google’s car park and get out onto the high roads – and they will be better drivers than humans because they do not drink or talk on their mobiles or get distracted as someone is crossing the road. All will be for the best in the best of all possible worlds say the Utopians, who tend to believe that because something can be invented it should be – and that its benefits will be benign. How will this story unfold? Nobody knows – but it will grow and become important to brands not least because IA can be harnessed to continuously improve service delivery. One to watch.
Drones took off too
Drones are most associated with being sinister weapons of war, yet many more benign applications are now being created. Amazon is experimenting with drone deliveries. Drones can also deliver vital supplies to places where infrastructure has been destroyed or not been built. At Google we deployed drones to create a new and different perspective at the Fendi fashion show in Milan. A new technology takes off (forgive that pun – sorry) when two things are true; the price collapses and people can see many benefits. Both these factors are in play in the mainstreaming of drones (as The Economist recently laid out in a special report).
Programmatic and its benefits
Programmatic buying is a means of buying and selling advertising space using computer algorithms to buy and sell ads in real time. It is also known as ‘real-time bidding’. CPC (cost per click) is significantly cheaper and ads can be targeted to specific people or groups.
Primitive human brains versus hyper tech
Technological advance rushes ahead. We perceive that the pace is accelerating. Yet at the same time the science of Behavioural Economics (BE) shows that we humans are all still navigating the world with primitive brains. 2015 was the year when BE went mainstream in business – several years after governments adopted it. From 2008 to 2011 I advised the UK government’s Central Office of Information (COI) where I studied the applications of BE to communications and behaviour change. At the time it was a highly academic discipline. Since then the literature has grown (much of it very easy to read) and it is now going mainstream in business and even self-help.
The father of the discipline – Daniel Kahnemann – has won the Nobel Prize and new books are being published all the time drawing out wisdom for everything from how to run a sales promotion to how to be happy. One reading of BE is that we are basically clothed apes playing with dangerous toys. We make fast, instinctive decisions and rarely evaluate in detail the pros and cons of a choice. Rather we tend to post-rationalise instinctive decisions. Fast instinctive decision making can be right – but we are also prone to error. So whilst technology is changing fast, our brains remain much the same as those of our ancestors who lived in caves. Sure consumers are more ‘empowered’. But that does not mean that we are getting better at decisions and choices. Technology is transformed but BE suggests that we humans are not. We still think that something that is simply popular is a good and safe choice (the Law of Social Proof). We tend to do the things that people like us to do. We are copying animals.
This basic and immutable truth about how we choose and buy in markets explains why the much predicted demise of mass marketing will never happen, even in the face of increasingly sophisticated AI powered targeted advertising. The point about mass marketing is that that it is wasteful but that it is mass. It is a public and visible affirmation of the popularity of something. And popularity sells. Always has, always will.
All of which puts me at odds with the world in which I work. 2015 was a year in which I became more excited about the potential of technology like AI and more doubtful about our abilities to manage and control its consequences.
Julian Saunders works for Google as a freelance strategist and teaches through The Joined Up Company. email@example.com