February 10, 2020
Within marketing, forms of technology progress from being nice-to-haves, to hygiene factors, to enablers, to potential value creators. However, balancing a technology’s potential as a value creator is the threat of the same technology being a value killer. AI is currently at this tipping point – where it can create value in marketing if used appropriately.
Northstar collaborated with Arm – the world’s largest semiconductor, whose products are used by 75% of the global population – to conduct global research with nearly 4,000 consumers on AI. The insights allow marketers to understand how to use AI to create value, not kill it.
AI: The Value Creator
Consumers are typically positive about AI, its current impact and predicted trajectory over the next decade. But how does this translate into marketing actions?
Communicate AI to Tomorrow’s Valuable Consumers Transparently
Younger adults and youths have unshackled positivity towards AI. They’ve grown up in a digital age and AI is simply a progression – a frontier they’re comfortable exploring. By 2030, today’s young consumers will have vast spending power. Communicating your use of AI to this valuable audience will allow you to leverage its positivity. However, AI’scommunication must be transparent. Brand trust is being reduced consistently by the mainstream press, making young consumers sceptical of brands. Being transparency about how you use AI is therefore a hygiene factor.
Understand if AI is Relevant to You
Just because AI exists, doesn’t mean you should use it. AI is trusted to perform critical tasks – e.g. AI surgery. However, AI’s use isn’t supported in art or music. Only use AI in your marketing if it’s relevant to your brand. If AI isn’t appropriate to your brand, using it won’t benefit you.
Communicate AI’s Core Benefits Subtly
Consumers don’t explicitly identify time and money savings as AI’s main benefits. However, AI’s ability to deliver these shouldn’t be understated. These benefits are implicit in howconsumers use AI – many of AI’s most successful uses (e.g. maps, video streaming, voice assistant etc.) give consumers significant time and money saving benefits. Explicitcommunication of time and money savings can in fact negatively impact your brand’spositioning, particularly for high value brands. Fortunately, today’s consumers are typically tech-savvy and know of AI’s time and money saving benefits. Consequently, you don’t need to communicate them.
AI: The Value Killer
However, the opportunities offered by AI must be tempered by widespread consumer concerns that can potentially harm your brand. These concerns create several marketing actions to avoid:
Investing In AI, But Not Data Security
Consumer’s core concern with AI is data privacy. This reflects the volume of data breach stories in the media. Consumers will switch brands instantly if their data privacy is breached, believing that the brands who fail them should be punished. The stakes couldn’t be higher. A solution to this is using AI-on-the-edge (where AI processing occurs on-device to avoid data being sent to the cloud).
Being Too Intrusive
The line between intelligent and intrusive AI is thin and your brand mustn’t over-step the mark. For example, consumers are comfortable with security cameras that move towards suspicious noises, but less comfortable with smart door locks that allow delivery drivers home access. Over-intimate AI, such as a speaker that recognises if you’re sad and talks to you, also makes consumers uncomfortable. Marketers must understand and respected these boundaries. Failure to do so will scare consumers away from your brand.
The Hollywood narratives end with human’s losing control and AI taking over. Consumers typically understand this as science fiction, but the fear of losing (too much) control is genuine. One area this is true is autonomous vehicles. Consumers are comfortable with relinquishing some control (e.g. AI flagging safety issues or automatic engine ignition when the driver is recognised). However, allowing a car to be fully autonomous is more challenging. Using AI to replace humans completely removes empathy. And without empathy, you’ll be unable to have a relationship with consumers.
Peter Drucker states that “business has only got two functions, marketing, and innovation.”Insight into if and how AI can support your brand in these areas is therefore essential. Relevant AI insights will prevent impulsive decisions regarding AI’s tactical use in marketing. Instead, insights into AI will allow you to understand its role in the strategic process of value creation.
Insights into AI are especially important for sectors such as smart homes, automotive, healthcare, retail and wearables. More direction on how brands in these sectors can use AI to create, not kill, value can be found in the full report ‘AI Today, AI Tomorrow 2020’ here.