How to market to robots

The robots are here, and they’re making buying decisions for your customers. People let Google Shopping tell them where to buy. They let Alexa and Pandora pick their music for them. They let algorithms rebalance their mutual funds and ETFs.

Marketers have been so focused on the potential of artificial intelligence (AI) as a sell-side tool—smarter chatbots and the like—that it’s easy to forget that robots call the shot for purchases as well. Now it’s time to decide what marketers can and should do about the AI buying agent.

The good news is that if you feel behind, you’re not alone. A survey from Demandbase and Wakefield Research shows that only 26 percent of marketing executives have a firm grasp on AI’s impact on marketing. Only one in 10 actually employ AI today.

As marketing technology bloodhound Scott Brinker writes, artificial intelligence is bring brought to bear on every aspect of traditional marketing. So far, AI has been less about creating a new marketing discipline and more about adding more powerful and more automated insights to almost every step in the marketing pipeline. It’s easy to visualize how AI can build better customer segments and drive more sophisticated customer transactions and conversations.

What still remains to be seen is how AI will change the path to purchase. But there are already some powerful signals.

From Predictive Analytics to Predictive Purchasing

Predictive analytics were the first major AI-powered shockwave to hit marketing, but those ripples have settled. The concept of “You Might Also Enjoy” recommendations, fueled by deep-dive demographic insights, past purchases, and post-purchase behavior, put useful and actionable information (a strong, short list of related items) in front of a customer at a time when they may be looking to spend. But recommendations are just that. The algorithms aren’t empowered to buy books for you, only to nudge you in the direction of a Thomas Hardy novel now that you’ve finished your Melville.

When things get interesting is when AI starts being empowered to make financial decisions on behalf of its favorite person. In finance, this already happens. High-frequency trading algorithms buy and sell to exploit arbitrage advantages for the fun and profit of the banks and structured investments they work for. Nobody, as yet, is entrusting their smartphone’s voice assistant to automatically buy a new car for them when the check engine light comes on.

The first players to convince consumers to trust a predictive purchasing AI, for non-free items, will change the world. People already trust Netflix to auto-play a new recommendation after their movie ends. Of course, because Netflix is an all-you-can-eat service, there is no cost to the consumer when the AI decides to play a new recommendation.

Cracking that code at the microtransaction level (99 cent apps, anyone? Coffee and doughnut vouchers?) will start a chain reaction, as consumers see AI purchases addressing their unspoken wants and needs. “It’s an extension of the communications revolution that made customers demand more highly personalized interactions,” says Paul Greenberg, consultant and author of CRM at the Speed of Light. “People want optimized, personalized interactions, and they don’t care if they’re transacting with you or with the machine.”

The Power of Brand to Fight the AIs

The challenge for marketers in this new world will be the fact that AI is unemotional. It has no sense of loyalty, it cannot be manipulated by images of grandmothers or kittens. It only wants to evaluate facts, costs, and benefits. “AI doesn’t want anything,” Greenberg says.

That’s why brands are fighting so hard to get in the middle of easily-automated, easily-commoditized transactions. Take a look at what Amazon is doing with Dash buttons. They are tied to specific branded products. There is a “buy more Tide” button, but not a “buy more of any detergent algorithmically determined to meet my needs at the best intersection of price and performance.” Brands 1, AI zero.

Soon enough, somebody—and for all we know it may come from Amazon’s Alexa division itself—will create agents to do exactly that. To go out and make a purchase that enriches the consumer, even if brand messaging would like to steer that decision elsewhere.

Gaming the System

The answer is to learn what impresses the AI agents, and fast, so that when someone wants the best paper towels at a reasonable price, the AI can be persuaded to choose your brand. This digital convincing process won’t look much different than the old SEO discipline of seeding the AI’s database with the facts, statistics, and content that cause your brand to bubble to the top. “It will eventually change the way SEO organizations work,” says John McDougall, president of digital marketing consultancy McDougall Interactive. “But when robust robots answer questions for you without a page full of blue links and search engine results, you’d better be number one.”

Meanwhile, AI agents will try to learn how to game the system themselves—to go beyond sticker prices and start actually leveraging loyalty, threatening to churn, or going to social media to bolster their cause with a brand they want more from. Greenberg petitions his satellite TV provider every year to match deals being offered to new customers, and wins. He’s watching for the bot who can do the same. “AI will learn what is being done, and adapt to new techniques,” he says.

It may not take long for the purchasing robots to make their impact. Remember: robots are everywhere, and they eat old people’s medicine for fuel.

Jason Compton
Post by Jason Compton

Jason Compton is a writer with over 15 years of experience covering marketing, sales, and service. Based in Madison, WI, he is a regular contributor to Direct Marketing News, previously served as executive editor of CRM Magazine, and has been published in over 50 outlets.

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