Zheng Zhang explores the evolution of the ad tech ecosystem and outlines key features of this programmatic era. He highlights the challenges many advertisers currently face when aiming to achieve secure and efficient ‘easy advertising’ and advises that specific, emerging technologies can be leveraged, to advance solutions and diversify the user experience in a highly saturated market.
There are some key differences between the first two phases of the digital evolution and the third phase that we are currently undergoing. Phase 1 started in 1995 with the arrival of general access to the internet for the first time. Phase 2 began in 2007 with the advent of the iPhone and the rise of social media, with constant access to Facebook and Twitter.
Phase 3 is happening now – since 2016 in fact, when Google DeepMind’s AlphaGo program beat the world champion human Go player for the first time, making it clear that the Artificial Intelligence phase of evolution had begun.
In a nutshell, Phase 1 was about information – information that was released to everyone via the internet. The winner of this phase was Google, which became the interface between us and that information.
Phase 2 was about mobile technology and social media. The winners of this phase, in the Western world at least, were Apple and Facebook. As yet, it’s unclear who the winners in Phase 3 will be. But one thing is for sure – this phase will be a totally different experience for both consumers and companies.
This new Artificial Intelligence phase will mainly involve Invisible Technologies – behind-the-scenes technologies that work to make experiences magical for humans, without necessarily being noticed in themselves.
With this new form of back-office support, and as the levels of service to humans get higher, Phase 3 will reach to the core of customer service and therefore the core of business. Companies will need to get on board with this quickly, or risk more than just falling profits.
For example, in the initial years of Phase 1, a company website was seen as a nice-to-have but by no means essential asset; opting out of the opportunities provided by the internet was perhaps short-sighted, but it didn’t mean you would go out of business.
By Phase 2, people had woken up to the importance of the internet in business and having a website was seen as essential for any self-respecting company, in terms of marketing, sales and customer experience. As social media rose in popularity and was harnessed as a tool for promotion and profit, larger numbers listened to the hype and were aware of its potential to carry a business upwards; but still, opting out of the Twittersphere was not seen as being disastrous to profit.
However, in Phase 3 adoption of the new technologies by businesses will be much faster and there will be widespread recognition that companies need to adopt or face loss of viability. Consumer adoption will also be much faster than in the previous phases.
Phase 3 of the digital evolution: tools are in place
The fundamental difference is that in Phase 1, consumers had to pay. They had to pay telecoms companies to obtain an internet connection and pay again for a broadband subscription. This took time and money, and followed the traditional adoption curve for new technologies. Phase 2 followed a similar curve, with consumers’ adoption of mobile technology being dependent on their investment in expensive smartphones.
In Phase 3, consumers don’t need to invest in anything. We already have the smartphones, the computers, the fibre internet connections. All the tools we need to use the Phase 3 technology are already in our hands – and with no financial barrier to adoption, the traditional adoption curve will not apply.
Bear in mind that the big technology companies are already working in an AI mindset. They have been adopting for a couple of years already, but are now upping their game. And bear in mind that 70–80% of the time the average consumer spends on his or her smartphone is spent with digital superhero companies like Google, Amazon, Facebook and YouTube.
We’re getting used to these new technologies and now, to enjoy higher-level services, no further adoption is necessary. As consumers, we will simply see an upturn in the quality of the services we already use. In this context, it is crucial for non-digital companies to move faster in the domain of AI, because service levels will be extremely high and the competition will quickly move up a few notches.
It’s the first time in this digital phase that new technology will lead to the core of both service and product and, because of that, companies need to think hard and fast about their AI strategy, both in the back office and the front office.
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