How the Internet Killed the Media Advertising Model in 15 Years

February 11, 2020 – In the latest email blast from Peter Diamandis he describes the disruptive force that 21st century technologies are having on our traditional notions of advertising. I’m pretty old school about the ads I choose to read. I hate to say that I tend to ignore most of the noise on the Internet and still leaf through flyers that show up in my print newspaper or mailbox every day. But I’m 71 and atypical of the vast majority of digital multimedia savvy younger people today who will seek information almost exclusively through an electronic lens. 

In this posting, Peter talks about the level of disruption that is occurring in the world of print as well as how augmented reality is altering how we receive and digest advertising. I have edited some of the original content but the substance is very much kept intact. Enjoy the read.

Today, less than two decades after the arrival of the Internet, Google and Facebook together command more advertising dollars than all print media on the planet.

In 2017, Google’s advertising revenue totaled over $95 billion, while Facebook reached more than $39 billion. Taken together, this number represents roughly 25% of all global advertising expenditure.

Fueled by open source e-commerce platforms, mobile devices, and advances in online payment infrastructure, social media marketing has replaced virtually the entire traditional advertising industry in fewer than 15 years. And the numbers are huge. In 2018, global advertising surpassed $550 billion, driving Google’s valuation above $700 billion and Facebook above $500 billion, all fueled by our searches, likes, dislikes, what we desire, who our friends are, and what we (and they) are clicking on these days.

But with a blitzkrieg of technologies converging on the industry, advertising will continue to change, first, by getting more invasive and a lot more personal, and then by vanishing entirely. How long will it be before the latter? Give it 10 to 12 years at the most.

Advertising in Our Virtually Enhanced World

Because of the convergence of high-bandwidth 5G connectivity, augmented reality eyewear, our emerging trillion-sensor economy, and powerful AI, we have gained the ability to superimpose digital information atop physical environments, freeing advertising from the tyranny of the screen.

Imagine stepping into a future Apple Store. When you approach the iPhone display, a full-sized AR avatar of Steve Jobs materializes to give you a tour of the product’s latest features. Avatar Jobs is a little too much, so with nothing more than a voice command, he’s replaced with floating text and a list of phone features hovers in the air in front of you. After you’ve made your selection, eschewing the iPhone for a new pair of AR iGlasses, another voice command is all it takes to execute a smart contract.

Next, glasses on, you head over to a friend’s house. While chatting in her kitchen, you gaze at her new cabinets. Sensors in the glasses track eye motion, so your AI knows your focus has been lingering. Via your search history, your iPhone knows you’ve been considering remodeling your kitchen. Because your smart recommendation preferences are turned on, cabinet prices, design, and color choices fill your field of vision. It’s a new form of advertising: either an extension of frictionless shopping or a novel type of spam.

The early version of this reality is already here. Known as visual search, the feature is currently available from a number of companies. Here are some examples.

• A partnership between Snapchat and Amazon allows you to point their app-camera at an object and get a link showing either the product itself or something similar, available for purchase.
• Pinterest has a multitude of visual search tools, such as Shop the Look, which dots every object in a photo. Like the couch? Click the dot. The site will find you similar products for sale. Or take Lens, their real-time visual search tool. Point the app-camera at a scene and the app generates links to all the products in the scene.
• Google Lens released in 2017 is a general visual search engine app that not only identifies products for sale but decodes an entire landscape. You can learn anything you want from the botanical breakdown of the plants in a flowerbed, to the breeds of dogs romping through a park, to the history of the buildings lining the city street in your visual view.
• IKEA has even gone further. Using its AR app through a smartphone, you can map your living room into a digital version with exact dimensions. Need a new coffee table? The technology lets you try out different styles and sizes. Your choice triggers a smart payment, and just like that, an Ikea customized coffee table is delivered to your doorstep. Need help assembling? The AR app walks you through it step-by-step.

All this visual search competition has kicked development into overdrive, spiking consumer adoption rates. And as more people use these systems, more data gets fed back to the AI running them. By the fall of 2018, this feedback loop pushed visual searches above a billion queries a month for the first time.

Pretty much every global brand is preparing for a world of point, shoot, and shop.

But it could get even creepier.

Hyper-Personalized Advertising

You’ve been spotted. You’re just out for a casual stroll through a department store, and their facial recognition system has you in its sights. Your AR glasses light up: “Hi Sarah, great to see you. . . . That’s because you forgot to change your preferences to Do Not Disturb. A microsecond later, the store’s TV monitors have got you. Maybe it’s a hologram or the President of the United States calling out your name, “Sarah, just one second. Your pores are a matter of national security. I want to tell you that your genome sequence matches a new line of L’Oréal skincare products.” If you don’t respond to POTUS, the AI switches tactics. Now it’s Mom. You flinch, involuntarily. Her voice is deeply imprinted on your brain. But you know better, and just keep walking. Sometimes it could be your favorite movie stars (based on data from your Netflix account), or your favorite sports star (based on Internet searches).

Does this sound like a far-off fantasy? Guess again.

The Age of Jarvis and The End of Advertising Itself

From the Mad Men of old to the Madder Men of today, the purpose of advertising hasn’t changed: to sell you stuff. So ads extol benefits: Buy X because it’ll make you Y—sexy, successful, shiny, whatever. But what happens when you are no longer the one making the buying decisions? That’s when Shopping JARVIS comes to the rescue.

Imagine a future when you simply say: “Hey JARVIS, buy me some toothpaste.” Does JARVIS watch TV? Did he happen to catch those late-night ads filled with bright-white smiles? Of course not. In a nanosecond, JARVIS considers the molecular formulations of all available options, their cost, the research that supports their teeth-whitening claims, published client-satisfaction reports, and evaluates your genome to determine the flavor formulation most likely to tingle your taste buds. Then it makes a purchase.

Taking it a step further, in the future, you’ll never actually have to order toothpaste. JARVIS will be monitoring your supply of regularly consumed items, from coffee, tea, and almond milk to toothpaste, deodorant, and all the rest, and will order supplies before you realize what needs restocking.

How about purchasing something new? That drone your son wants for his birthday? Just specify functionality. “Hey JARVIS, could you buy me a drone for under $100 that is easy to fly and takes great photos?”

What about fashion decisions? Will we trust our AIs to choose our clothes? It seems unlikely until you consider that AIs can track eye movement as we window-shop, listen to our daily conversations to understand likes and dislikes and scan our social feeds to understand our fashion preferences as well as those of our friends. With that level of detail, Fashion JARVIS will do a pretty accurate job of selecting our clothing, no advertising required.

Final Thoughts

In the next decade, expect advertising to get far more personalized learning from an explosion of layered data and expanding into new surfaces of our digitally superimposed world.

Next, we’ll head towards a future in which AI will take over the majority of our buying decisions, continually surprising us with products and services we didn’t even know we wanted.

Or, if surprises aren’t your thing, you’ll just turn off that feature and opt for the boring and staid. Either way, it’s a shift that threatens traditional advertisers, while offering consumers a very different view of the material world around them.