Google I/O 2017 took place this past week in Mountain View, California, and (as usual) the search giant unleashed a slew of new innovations in its quest to become the world’s dominant AI platform. My favorite (by far) was Google Lens, which turns your phone’s camera into an augmented reality device. The all-encompassing potential for this technology is mind-boggling, but it’s the implications for advertising and monetization that really got me thinking.
1. Intent-Based Advertising Beats Interrupt-Driven Advertising Every Time
One of the benefits (or curses) of living in such strangely disruptive times is that it forces us to constantly re-examine economic arrangements that we would otherwise take for granted.
Does shopping at the mall make sense? It seemed so, until Amazon came along. Now many consumers see going to the mall as a waste of time. Watching Friends (only) from 8:00-8:30 pm on Thursday night? That made perfect sense as well, until first the DVR and then video on-demand came along. Now it seems laughable.
Traditional TV advertising suffers from exactly the same problem. Interrupting an entertainment video at regular intervals to show me advertisements of random consumer products? Long exposure and force of habit trained many of us to think this was totally normal. It’s actually odd for two reasons. First, the ad interrupts my experience of the content, forcing me to try and ‘pause’ my mental and emotional state until the show returns. This is a significant cognitive load, which is why shows that do this to the extreme (RIP American Idol) are so incredibly annoying. Second, the advertisement interrupts my true intent (watching a show and being informed, entertained, or educated in some way) and forces me to think about something completely different, namely the advertising. One moment I’m caught up rooting for my favorite team (or saving the galaxy from the evil Empire), and the next I’m supposed to think about tooth decay or whether we should really think about replacing that old SUV in the driveway. Like I said, it’s rather strange.
Intent-based advertising is totally different. If I’m looking for a new car, then I’m happy to hear from Ford or Toyota. If I need to find a place to stay in New York tonight, then I want to know what Airbnb or Expedia have available. Intent today is often expressed (and most easily understood) in the context of using a search engine or opening up an app. Conversational interfaces like Siri, Ok Google, and Alexa are already mining intent from the human voice. Google Lens takes this yet another step, mining intent from the things we look at, which brings us to our second point.
2. Augmented Reality Provides The Ability To Monetize Reality
As the old saying goes, seeing is believing. What this adage misses, however, is the notion that seeing is also thinking. When we see a flower, we think about flowers (and gardens). When we see a BMW, we think about BMWs (and other cars). This may seem obvious, but it’s incredibly powerful when instantiated in a product like Google Lens. Once Google knows what a person is looking at, it can infer intent and monetize that intent with advertisers. Looking in the fridge? Google could offer recipes or cooking videos based on what one has one hand. Looking in the freezer? Maybe Google could offer to order a pizza instead. The opportunities are endless.
Just as important, visual intent from this kind of meta-seeing is likely immune from traditional intellectual property laws. Looking at a new Toyota? Via Google Lens, Ford would have every right to send me an offer on one of their fine products. Watching Game of Thrones? Google Lens could offer me a fine selection of broad swords. :) The alternative would imply that Toyota (or HBO) owned my thoughts every time I looked at their product or watched their show. I know our intellectual property system tends to overreach in favor of corporate interests, but I don’t think we’re quite that far gone.
The bottom line: Augmented reality systems like Google Lens open up a vast new space of meta-reality advertising that (1) sits square in the public domain, and (2) is totally monetizable by Google or whomever provides the platforms (and the AI that powers them).
The entire advertising business is built on the concept of shelf space, including the video advertising on screens that we still call ‘television.’ Augmented reality breaks the monopoly of that model, and in the long run may render it entirely irrelevant.
Stick with TDG and stay ahead of the curve.
Joel Espelien is Senior Advisor for TDG and VP of Client Services for the Corum Group doing sell-side technology acquisitions. He lives near Seattle, WA.