The Future of Advertising - A 100% Conversion Rate?

The Future of Advertising - A 100% Conversion Rate?

Targeting. Targeting targeting targeting. In a world where advertising is everywhere (and I mean everywhere), it’s becoming increasingly critical to target the most appropriate person with the most appropriate message at the most appropriate time. Through developments in AI and machine learning targeting is getting more sophisticated by the minute. Is the inevitable conclusion of this a world where you are only served ads that you are almost certain to convert on? What does a world like that even look like? Terrifying?

Picture the scene. The year is 2031. You’re walking to the Uber Air station to commute to work, you’re a bit peckish but you put it out of your mind. A self-driving car whispers past you. Moving across its doors – which are of course screens – a video ad for an organic salmon bagel catches your eye, funnily enough, it’s exactly what you’re in the mood for.

15 steps further down the road you pass a local coffee shop, you’ve got a few minutes before your flying car arrives, so you poke your head in to see if they’ve got bagels. They do, and there’s no queue, so you head to the counter and grab that delicious salmony treat you didn’t even know you wanted until 20 seconds ago. What just happened?

Let’s break it down. The coffee shop subscribes to an ad network, it pays a flat monthly fee and for that fee it’s guaranteed a 75% conversion rate (conversion rates in 2017 are around 1-41%) on 100% automated ads that get served by an AI – through whatever channel it deems most effective in any given moment. When you were walking down the street, over 500,000 individual factors were taken into consideration before you saw the bagel ad on the car.

The AI considered things like time of day, amount of time before your transport arrives, your usual morning eating habits, what foods you like, the price of the bagel, the amount of disposable income you have, the amount you’re likely to spend on a quick breakfast, how busy the coffee shop was, how long you’re willing to queue for and so on. All these factors were taken into account and led to that car serving you that ad at that exact moment, with the system certain that with this tiny prompt you would walk into the coffee shop and convert on that bagel.

This hyperintelligent AI collected and collated information from thousands of sources, and in a fraction of a second analysed them in a way far beyond our comprehension, and then used that information to generate and serve an ad which resulted in an instant purchase – an ad which never existed until that precise moment.

This may seem farfetched, but to me, it seems like an almost inevitable outcome of the way that technology is progressing. There is such an incredible amount of money to be made by targeting people with the right messages, and as such the money being poured into the development of targeting technologies is mindboggling. Combine this with the increasingly rapid development of AI and machine learning and you end up in a pretty crazy place. What does this mean for us though?

In one sense it’s terrifying, the fact that a system or group of systems could understand what you want before you do and then persuade or coerce you into buying it. This can feel like an unprecedented invasion of privacy. But in another sense, wouldn’t it be nice to live in a world where we’re not constantly bombarded with adverts that aren’t relevant to us? Imagine only seeing one or two adverts a day, and each time you see them they feel like they have actual value because they’re showing you something you want.

It would be a complete waste of money to serve an ad to someone who wasn’t going to convert on it, so why bother? Why not optimise a system so that it only serves ads that are effective? Welcome to the future.

There are of course other things to take into account, things like building brand awareness. Adverts are not always just there to drive a quick sale, they’re often there to make sure a brand is positioned at the front of your mind when you do decide to make a purchase. But in the case of things like AdWords, most of the time they are served with the intention of getting you to make a purchase and it’s easy to imagine a scary extension of this in future. 

Combine all of this with the rise of VR and AR, which will mean different people are seeing different ads in the same place, and the future starts to look like a bizarre place indeed.