Source: AI for Marketing on the Hype Cycle: A Long Journey to the Plateau? | How to be a leader in #service: #servicedesign and #designthinking

Gartner’s 2017 Hype Cycle for Marketing and Advertising is out (subscription required) and, predictably, AI for Marketing has appeared as a new dot making a rapid ascent toward the Peak of Inflated Expectations. I say “rapid” but some may be surprised to see us projecting that it will take more than 10 years for AI in Marketing to reach the Plateau of Productivity. Indeed, the timeframe drew some skepticism and we deliberated on this extensively, as have many organizations and communities.

AI for Marketing on the 2017 Hype Cycle for Marketing and Advertising
AI for Marketing on the 2017 Hype Cycle for Marketing and Advertising

First, let’s be clear about one thing: a long journey to the plateau is not a recommendation to ignore a transformational technology. However, it does raise questions of just what to expect in the nearer term.

Skeptics of a longer timeframe rightly point out the velocity with which digital leaders from Google to Amazon to Baidu and Alibaba are embracing these technologies today, and the impact they’re likely to have on marketing and advertising once they’ve cracked the code on predicting buying behavior and customer satisfaction and acting accordingly.

There’s no point in debating the seriousness of the leading digital companies when it comes to AI. The impact that AI will have on marketing is perhaps more debatable – some breakthrough benefits are already being realized, but – to use some AI jargon here – many problems at the heart of marketing exhibit high enough dimensionality to suggest they’re AI-complete. In other words, human behavior is influenced by a large number of variables which makes it hard to predict unless you’re human. On the other hand, we’ve seen dramatic lifts in conversion rates from AI-enhanced campaigns and the global scale of markets means that even modest improvements in matching people with products could have major effects. Net-net, we do believe AI that will have a transformational on marketing and that some of these transformational effects will be felt in fewer than ten years – in fact, they’re being felt already.

Still, in the words of Paul Saffo, “Never mistake a clear view for a short distance.” The magnitude of a technology’s impact is, if anything, a sign it will take longer than expected to reach some sort of equilibrium. Just look at the Internet. I still vividly recall the collective expectation that many of us held in 1999 that business productivity was just around the corner. The ensuing descent into the Trough of Disillusionment didn’t diminish the Internet’s ultimate impact – it just delayed it. But the delay was significant enough to give a few companies that kept the faith, like Google and Amazon, an insurmountable advantage when Internet at last plateaued, about 10 years later.

Proponents of faster impact point out that AI has already been through a Trough of Disillusionment maybe ten times as long as the Internet – the “AI Winter” that you can trace to the 1980s. By this reckoning, productivity is long overdue. This may be true for a number of domains – such as natural language processing and image recognition – but it’s hardly the case for the kinds of applications we’re considering in AI for Marketing. Before we could start on those we needed massive data collection on the input side, a cloud-based big data machine learning infrastructure, and real-time operations on the output side to accelerate the learning process to the point where we could start to frame the optimization problem in AI. Some of the algorithms may be quite old, but their real-time marketingcontext is certainly new.

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