The Evolution of Advertising and the Impact of AI

By Brad Heidemann

When advertising was first invented, the technology available was a well-placed sign or logo. Let’s imagine an engraved sign with a “horseshoe and a hammer” hanging in front of the blacksmith’s shop. The owner hoped you’d walk by the sign and notice the business. On a more meta level, the Blacksmith also intended to use the network effect so when someone asked, “Where is a blacksmith?”, most people would know where to send them. In a world without Google, word of mouth marketing was the everyday search engine. It’s why being polite and well-mannered, were and are very valuable culture habits.

Word of mouth is the original search engine, also known as the oral tradition or a simple conversation. It was a reasonably good knowledge management solution given the technology limitations of the time. People came in all shapes and sizes, as did the quality of the search results (answers), shaped also by the quality of your questions. Hopefully you asked a knowledgeable person and received an accurate answer. This kind of marketing was cheap, but not very dependable because of the limitations in the size of a customer’s circle of friends and acquaintances. There was a premium placed on sourcing people who had acquired knowledge in a particular subject, being smart/knowledgeable was another valuable cultural trait.

Being smart and knowledgeable about something is still a highly coveted trait and personal economic imperative.? What it means to be smart and knowledgeable in the world of AI is going to fundamentally change, but we can get into that later.

Back to advertising and the advent of marketing. Static advertising was inheritably dependent of visibility, you had to see the sign or the ad for the system to work. This added an element of randomness that needed to be overcome, signs were strategically placed in highly trafficked areas. As society transitioned to urban living and technological advancements such as the automobile, radio, and television emerged, the approach to advertising evolved significantly. The challenge of capturing an audience's attention was addressed through strategies aimed at increasing the frequency and reach of advertisements. This shift ensured that ads were viewed more often and by a larger number of people, thereby enhancing their effectiveness and impact. Ad and Marketing campaigns are measured by frequency and reach. How many times will someone be exposed to my ad and how many people will see it at least once?

Let’s skip forward to the age of the automobile. Grand highways were being built across America, cars had become reliable. Whether it was a Sunday drive or a cross-country trip, billboard advertising became big money. As an example, the billboard for the gas station three miles ahead became an advanced search function for brand advertising.

With a great piece of artwork and a catchy slogan, the goal was to persuade you to do business with them after seeing the billboard enough times. A marketer could measure the number of cars rumbling down the road and build statistically relevant estimates on frequency and reach. If you needed to reach more customers, then buy more signs. I’d suggest that bumper stickers were like early versions of social media posts. Designed to elicit an emotional reaction, whether good or bad, examples like "Beam Me Up Scotty" or the famous "Baby on Board" aimed to create a strong connection with the audience.

We are going to skip ahead to mass marketing, TV, Radio, and Movies. The opportunity to create more impressions exploded and the format lent itself to storytelling. Brands began to describe their products in emotive, educational, and entertaining ways. In the early days of television, brands often sponsored entire shows. For example, I recently watched a YouTube video of a 1963 golf match between Jack Nicklaus and Chi Chi Rodriguez at Pebble Beach, sponsored by Shell Oil.

However, frequency and reach remained the primary marketing goals, and the market was not going to allow one company to command that much airtime.? This led to the advent of the 30-second commercial which drove up the number of impressions, the depth of the storytelling and when properly executed the level of consumer engagement. It gave rise to celebrity endorsements; this added a layer of credibility building for a product that is difficult to do in a magazine ad. Your hero not only tells you about the product but also sells you a lifestyle. Think of this as the precursor to paid search results, in a post Google world. This was the golden age of advertising which lasted until the internet arrived.

Virtually overnight, the world paradigm changed from information scarcity to information overload. The Internet was an amazing technology that made human knowledge widely available. With information overload came the invention of the search engine and some fundamental changes to marketing. Search engines adopted a key word search paradigm, which lent itself to Pay Per Click advertising.

Google has built a very valuable company capitalizing on this model. Since everyone had a website, brand advertising became even more affordable. Search and the website you visited transformed into a topically based version of TV ads. Drive to web advertising campaigns (PPC, Display Ads, Email Marketing and Social Content) are a revenue extension of the existing business model and it helps address the frequency and reach problem.

The only difference is that rather than relying on a network of people, this new model of advertising relied on a network of content distribution channels. The underlying belief was that this new network would effectively reach audiences by presenting information in a structured and static way. Digital experiences were one size fits all where the customer, who was driven to a website would then explore the site to find the bit of information or accomplish the task they cared about. The switch to this new model stripped out all the nuance, caring and human context that was provided in the original word of mouth search and advertising paradigm.

AI is the marriage of the two networks and the two search paradigms. We are now able to provide curated digital experiences that closely resemble a human-to-human conversation with the benefit of having most of the world’s information at our fingertips. As AI continues to evolve, its role in advertising is expected to expand, driving innovation and changing how brands connect with their audiences.

Artificial Intelligence is truly transforming the advertising landscape in profound ways.