Ads will disappear

Online advertising is a big improvement

Untargeted advertising, like the one you normally see on television, radio, billboards, magazines and newspapers, is already being replaced by online advertising.  Online advertising has the clear benefit of being able to target potential customers, locally or globally, mainly through Google and Facebook.

Online advertising is still immature

The downside is that today online advertising is still immature. If you are looking for a pair of Nike shoes you will get ads on Nike shoes a long time after having bought them. Even though the ads are targeted they’re often not relevant. The focus is to use data to present ads to relevant people to get people to buy. Maybe it sounds obvious but the problem is that it’s supplier driven. Suppliers push ads to consumers. This isn’t always appreciated by the consumers as all the ads just create noise, and it’s not beneficial for the suppliers either, since they spend money on ineffective ads.

Next step in marketing is to create real value for customers. To shift from supplier driven ads to customer driven information. Ads are dead, long live relevant and exclusive information!

Kalen Emsley

An example

Imagine that a guy, Eric, asks Google for an advice regarding a vacation this winter, maybe to a sunny and warm place together with his partner. Google responds with a personal message that it has found three fantastic alternatives for them. Each alternative fit them well in regard to budget, days off and type of activities, without their input. Eric and his partner selects the alternative that feels most exciting. It includes beach time, mountain climbing and other activities. Eric and his partner prefer adventurous vacations, which Google knows, and they would love to experience their first mountain climbing. Google found accommodation at a simple and cosy hotel by the beach and through Airbnb with a top ranked host living close to the mountain. Google is pretty confident that Eric and his partner will love these places. Google also books a transport fitting the requirements for such a trip, without having to ask Eric. The prices for the flights, accommodation, transport etc. are much lower than what Eric and his partner could find by themselves. All in all, the trip seems to be created by a first-class personal secretary. Google has thought about everything; booking of all places, important numbers in case of an emergency, a complete packing list, insurance, financing of the trip etc. Once arriving to their destination, Eric and his partner receives relevant proposals on restaurants, panoramic views, historical sites and more. Google even helps them find people sharing the same interests and organises meetings with them. Google’s business model is to earn some share from the airline, restaurants, accommodations etc. But when presenting the customer information on where to go and what to do the focus is not to upsell the customer. The focus is to give the customer real value. The customer should get information and services that are very relevant and hard, or even impossible, to achieve by themselves. The information can generate revenue (like restaurants, flights etc.), but far from all information circle around generating income (like for example recommendations of panoramic view, historical sites, packing list etc.). The point is that the focus is on giving the customer real value. The focus is not on pushing goods and services. Google’s raison d’être in this example is to give value by thinking about everything for the customer, not only the things that give direct income. By doing this Google knows that they will build trust and generate more satisfied customers.

Know your customer

If you are born before the year 2000 it probably feels scary that Google and other private companies know that much about you. And while there might be reason for that concern, privacy rights and policies are serious issues that has to be carefully managed, the gathering and management of personal data is something completely natural. Gathering personal data for commercial use isn’t anything new and has been done for centuries. When you go to a restaurant a waiter will try to understand you to give you a great personal service; are you at the restaurant for a romantic dinner, a business dinner, a family dinner with kids or is it a dinner with friends? The waiter collects all this data by looking, listening and speaking to you and your party. By collecting this data, the waiter can adapt and give you personal service, maybe by giving the kids some paper and crayons or recommending a nice cava to the romantic couple? In any business, you need to know your customer to succeed in sales, this is nothing new. The more they know about you the better service they are equipped to give you. And we normally give all this data away for free by signalling with what we say, with our clothes, our style, mood etc. We do this because we can see the benefits doing so and because it feels natural to give data away to a person. Giving away data to a computer is something we are still not used to do. It feels way scarier. Imagine that we would try to be totally anonymous at a restaurant by dressing in a burka, talk monotonously and not talk about anything else besides what food to order, the service we got would not be very personal. We need to give away data about ourselves in order to receive personal service, regardless if it’s to people or machines.

Matthew Henry

Privacy rights is becoming more mature

But won’t GDPR and other similar privacy initiatives kill opportunities for Google, Facebook and others to collect lots of data about? Probably, for some time until we get accustomed. GDPR and similar initiatives is a sign of maturity and not something hindering technology. With such policies, it will be clearer who owns the data, how can it be collected, for what reasons can it be collected, for how long can it be stored and so on. It doesn’t say that organisations can’t collect data about you that is private. But it has to be relevant. The point is, you will want to give away that data because you will receive so much better service by doing so. By being anonymous you would receive generic service and that can never be better than service adapted for you.

Hypothesis: Ads will disappear

We will see ads and upselling make a transition to relevant and exclusive information. Valuable information, for you! The better that Google and Facebook can provide you with relevant and exclusive information the more you will want to use their services, and thereby providing them even more data. No one will ever accept old-time ads that are being pushed by a supplier when they can pull relevant and exclusive information that is valuable for real. Ads are dead!

What do you think? Feel free to comment, criticise or argue for a different future!

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