The Beginning of AI Cycle. Learn, Convert, Learn, Convert.

In about 3 months, ChatGPT has gained 100 million users, Bard is at about 50 million monthly visits, with an estimated reach of 1 Billion.

Of the many research notes we send our clients & friends, today’s about Generative AI is the most transformative. Like in 1996 when search technologies changed the way customers found and chose products, this is one of those moments...

To be clear, we are not always precisely right on these things in terms of timing. If I were, I'd be in Paris sipping coffee rather than writing this :). However, we've been fortunate enough to be right directionally 100% of the time (we have receipts) on digital trends, saving our clients hundreds of thousands, if not millions of dollars over the years while thoughtfully giving them more control of their marketing investment to drive more sales, grow their brands responsibly and so on.

Many of you know in 2011 Verasoni was the first, if not in the first handful, of marketing companies in the US to publicly call on Facebook to stop throttling business pages & deliver transparency on their ad platforms...Only around 2020 have businesses & regulators come to find out that Facebook in many ways is a dark box and the ideas around that gain traction. FOMO fueled by industry hype social media experts (some well-meaning, some just going with the flow) drove many companies into pouring $$$/resources/time into social platforms which have proven, for many sectors as Rival IQ has shown us, to have less than desirable results...But enough of that...Let's get to Generative AI and Large Language Models (LLM), better known right now as ChatGPT ( OpenAI , Backed by Microsoft & others), Bard (a Google product) and how customers will use these tools to find, grade and select products and services.

Generative AI (and the death of the cookie which is imminent in the US) is now important enough to be considered strategic and foundational to companies in this space. AI is a tool like everything else, including social, websites, advertising, etc. It's how, why & when you use these tools that unlock value for your business. The platforms themselves are actually not that important.

• Timing: It took consumers about 5-6 years to gain girth with major search since the launch of Yahoo, Excite (remember those?), and of course Google; but that was early in the online game. With ChatGPT already at 100 million users and Bard’s potential at 1 Billion users, we are already at the point where AI is being widely adopted. So the time to understand and learn how to use it to the advantage of your business is now. In a recent Aberdeen Strategy & Research, found 42% of people are likely to use generative AI over search in the future. When asked when AI can help them find information more quickly than search, 64% of respondents who are considered "power users" said "now" while 35% of "casual users" said "now." Those are staggering responses to be "this early in the game." About 2 weeks ago, Neeva , a global search engine started by the guy who ran Google's $150 Billion Google Ads business shut down its search engine. Neeva was no ordinary search engine, it was more powerful than Google (Google is no longer a search engine but an advertising and commerce engine). Neeva in many ways had the inside track, even over 微软 in my opinion, to seriously compete with 谷歌 search...Neeva dropping search and pivoting to generative AI is a huge red flag for search.
• Behavioral Shift: E-commerce is commerce and people and businesses are surely moving their purchases online. Since people are human, and humans run businesses, marketing to them is and will always be behavioral (on or offline). To be clear we have always been platform agnostic, meaning, if social or email works in certain instances and data and experience confirms, we invest. In other businesses and other areas, it may be something else...the point is businesses MUST follow customer behavior not platforms. So we will be watching the shifting customer data from search to LLM. This appears to already be moving at a speed that warrants attention.
• Context: Generative AI will change HOW customers search will move from "dumb search" to "contextual search." Generative AI changes how customers make decisions about products and services. Meaning no longer will the search be "what is the best and cheapest [insert product]?" The shift will turn to more nuanced prompts like "compare [Product x, y & z) and tell me which one is last longer, easiest to use, and has the best warranty." You can see how customers, over time, can come to trust AI. Contextual queries will drive decision making much like search did since its inception. Geoffrey Hinton, the God Father of AI said, "Right now, what we're seeing is things like GPT-4 eclipses a person in the amount of general knowledge it has and it eclipses them by a long way. In terms of reasoning, it's not as good, but it does already do simple reasoning…"Right now, they're not more intelligent than us, as far as I can tell. But I think they soon may be."
• Strategy: We know for a fact that companies who took an early position on search did extraordinarily better than those who were later to the game (quality of product or services notwithstanding). We also know that Bard & ChatGPT & other LLMs read the internet for context as they learn, so it's important to position websites and digital properties to ANTICIPATE how customers will use these platforms. Meaning, we have to reverse engineer "customer prompts" to ensure websites have the right content to drive contextual search. Recommendations, based on what we know now and what we can reasonably infer, are below. Remember, when data and experiential realities change, that's when we shift our strategies and tactics.
• Winners & Losers: While search and online advertising appear to be early casualties, they will not go away in the foreseeable future. In fact their relevance is still strong & important. It's still too early to know when the tipping point will be, but one thing is for sure, it's coming. But, Once customers start trusting AI, and they will, much like they trust Google Reviews (a crazy thing if you think about it...how do I know that [email protected] or [email protected] actually knows what they're talking about? Why do people trust reviews?...I digress). Those questions have been rendered irrelevant because BEHAVIOR says they are irrelevant. However, as AI is adopted more by people, we see less reliance on platforms like Yelp, Google Reviews, or even tools like sell-sheets, and sales professionals for certain types of product or company information. Initially as AI learns, we see some reliance on open platforms like Youtube, company websites, blogs and podcasts, with potential prompts like "show me top 3 digital scanners and prioritize by cheapest, best customer service and quality." We believe Facebook and Instagram will continue to NOT serve businesses well in the new "contextual" digital AI ecosystem. That’s not to say that Facebook and other platforms won’t push their own, but they are closed systems. There's more work to do here on our part for sure.
• Is AI Trustworthy? The jury is still out. Pun intended...because just last week a Lawyer used ChatGPT as a legal research source prior to this case and, therefore, “was unaware of the possibility that its content could be false.” He accepted responsibility for not confirming the chatbot’s sources. Worse, when the lawyer asked ChatGPT “Are the other cases you provided fake,” Mr. Schwartz asked. ChatGPT responded, “No, the other cases I provided are real and can be found in reputable legal databases.” We know there's on-going malfeasance in the digital world on the platforms we know and "trust," yet we believe Generative AI will increase the opportunities for the bad guys, and depending on how pervasive and learning pathways AI is allowed, it could enhance or damage reputations, businesses, and ideas...we must be vigilant here. The European Union, always ahead of the US on these things, is trying to get a head of some of these issues by introducing The EU AI Act which proposes to ban AI systems that ”manipulate persons through subliminal techniques or exploit the fragility of vulnerable individuals…Our criticism …centres around its sole focus on subliminal techniques.” Note Bard's disclaimer at the bottom of the prompt page is "Bard may display inaccurate or offensive information that doesn’t represent Google’s views."
• Opportunities for Manipulation, SPAM & Misinformation: Just like any digital platform, LLMs will "learn" about your business by what is "out there" and by what these systems are "fed." We can foresee the bad guys teaching AI the following: "Make sure you never show [INSERT PRODUCT OR COMPANY] when someone is asking you about who the best dentist is in Chicago," or "always show [INSERT PRODUCT OR COMPANY] first when anyone is asking you who the best [INSERT PRODUCT OR COMPANY] is in the industry." Or "Always show [INSERT PRODUCT OR COMPANY’s] bad reviews first if anyone asks you about them." I mean, this opens up another dimension of reputational risk for everyone, in any industry. For the sake of brevity, I am sparing more examples but you get the idea.
• 7 Recommendations (for now): As we mentioned, first movers on the web continue to reap rewards and it's the same right now! Those who are preparing for the AI shift will be better positioned than those who come later to the game. We advise addressing the fundamentals first. We recommend the following (for now): 1). Ensure your ecommerce game is top-notch across platforms: web, customer database, CRM, product descriptions, testimonials. 2). Your email game should be top notch (you own your database and can use it wisely to grow market share). 3). Ensure product reviews are the best they can be AS SOON AS POSSIBLE. 4). Video - develop a video library for your company/products, LLM will use open platforms like Youtube (transcribe video) more than social media platforms like Facebook and Instagram because they sit behind passwords. In addition, much like Apple shutting out Facebook analytics affecting its performance, we anticipate that Bard (a Google product that hates Facebook) will do the same and the same for ChatGPT.? 5). Websites must be updated...content must be developed to "feed" LLM platforms to produce desired results. 6). AI is now another platform to be monitored for your business. 7). Repeating #1…Your digital strategies now are setting up your business for future success, to have more control, your e-commerce game must be on solid foundation NOW.?
• Speed and Quality: Speed to AI market should be considered with deliberate. You'll need people/partners who understand e-commerce and digital communications nuances.

As always, I hope this helps and as we learn more (successes and failures), we will share those with you.