Digital Assistants – The third wave of Media Apocalypse

After the transition from paper and other physical supports over to the internet, and the increasingly important aggregator role of Facebook and Google, the new breed of digital assistants is ready to prey on the spoils of what is still left of the media and advertising industries. But there is hope.

This is an extension of my comment on digital assistants published on E24.no.

On Monday, June 5, Tim Cook stood on stage and presented the latest news from Apple. Almost all products, from Mac to Apple Watch, have got a generous upgrade both when it comes to hardware and the software that empowers them. New applications, including new forms of payment in direct competition with Facebook peer-to-peer payment service, were unveiled at furious pace one after the other.

However, it was not Tim Cook, or any of the top executives on stage, who crafted the smooth transition between the products and services that were presented to the audience in the hall.

The star was Siri, the digital assistant from Apple. She can for example help you sort your photos. She can also read aloud for you news that you will think are relevant because she has learned what precisely interests just you. She can even suggest when it is best to arrange a doctor appointment in the middle of a busy day. Also HomePod, the new intelligent cylindric speaker announced the same day, is thought to be placed in the living room, using Siri to control the music at home and recommend new songs you will like. You don’t see Siri, but she is there, behind the amazingly well designed cylinder, ready to please you.

Still, Siri is not the only digital assistant who wishes to take an indispensable role in the living room and in your life. Amazon has its own digital assistant, Alexa. Google Assistant is the option from the giant at Mountain View. Microsoft wants to seduce you with Cortana.

The reason for this phenomenon is that the global internet giants know that the smartphone war is over. The market is almost saturated. The growth measured in units sold is almost gone. Now it’s important to extract the highest possible value from every user. The new promised land for the global internet giants is services that bind you closer to the ecosystem you’ve chosen, driven by artificial intelligence. The assistants are placed in the living room in the form of listening speakers. As invisible spirits, these digital helpers want to take away from you the pain of making choices and let you enjoy a simpler life. They wish to be your only doorway to all content on the internet and to your own life.

20150624_it_echo04_480x
Echo from Amazon, the smart speaker powered by Alexa

Such development can radically change several industries, specially the retail, the advertising, and finally the media industry, which may be casted out into its third apocalypse. After the transition from paper and other physical supports over to the internet and the increasingly important aggregator role taken by Facebook and Google, the new breed of digital assistants is ready to prey on the spoils of what is still left.

First, concepts such as online shopping and advertising can get a whole new meaning when we order goods through Siri, Alexa or Google Home. How many of us will specify, for example, which toothpaste do we want when dictating the shopping list to our invisible helpers? How do we consumers will react when our assistant suggests a product other than what we just have ordered, because our assistant’s recommended option is either cheaper, new, or more in line with the lifestyle we have said we want to follow? Can we imagine how much the biggest brands will be willing to pay to place their products on top of the assistants’ recommendation list? In fact, the concept of advertising can quickly lose its meaning. After the so-called Retail Armageddon, the advertising industry can soon experience its own and brutal Ragnarok.

Read also: Alexa, the end of retail as we know it? 

It is also legitimate to ask what role online newspapers and other content aggregators can play when the assistants take over. These can go through millions of pages while we sleep. By using artificial intelligence, they will then be able to put together the most relevant content of a subject from several different sources into one and the same article. Then they will send the result to a separate app on our mobile or read it aloud for us. We may not need to know which newspapers the content of such newsletters originally comes from. The newspapers’ political positioning and social role can thus lose their meaning. Their role as aggregators can quickly be taken over to an even greater extent than Facebook an Google have done. And with brands potentially spending less on advertising, how will their future look like?

Investors, media CEOs and innovators should pay close attention to three factors in order to decide their future actions.

First, they should look towards UK and Germany.  After USA, these are the countries selected by Amazon in order to test its digital assistant Alexa, the most retail oriented of them all. UK and Germany are two very different countries. What happens there will give accurate insight into what sooner or later may happen in other geographies.

Second, they should look into the advertising budgets of the big brands over time. They may increase, because big brands may throw everything they have in order to make the consumer as specific as possible when they order their goods through assistants, They may also decrease dramatically as brands may give up. We may witness two distinctive phases, with greater ad budgets first and stark budgets reductions later as a result of disappointing results. Advertising budgets may find their way to other off-line media too. In that case tools like outdoor advertising can benefit largely from that.

Finally, inbound marketing, content marketing and other business models based on smart promotion of relevant content may become winners in the long run.

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Forfatter: Salvador Baille

Daglig leder ved Intelis, et rådgivingsfirma med fokus på Innovasjon og teknologiledelse.

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