05June

The Age of AI, 5G & How it affects building brands

Posted by - whitestoneWP

We are in the early stages of AI influencing human behaviour, and during the next phase of technological disruption there’s a period of risk for brands in how they manage its use and influence over consumer attitudes towards them.”

The Challenge

We interact with AI everyday and it’s going to multiply exponentially, particularly with the advent of 5G. This raises the question about how our new AI driven age affects brands and how it is accounted for in their development, definition, alignment and what it means to consumers.

The Risks

We are in the early stages of AI influencing human behaviour, and during the next phase of technological disruption there’s a period of risk for brands in how they manage its use and influence over consumer attitudes towards them. AI is already involved in nearly every aspect of the customer journey and experience. Whilst research shows it is generally accepted and encouraged by consumers, research also shows that the increasing presence of AI is creating tension and concern. And it’s getting to a point where brands need to start to recognise this and factor it into their brand strategies – specifically around how to define and maintain the vital human connection that is central to brand value and Brand Pull.

Pros & Cons

The different types, purposes and uses of AI vary greatly in business of course, as do consumer interactions with it in both its visible and invisible use. It makes sense for everyone. However, surveys by the likes of Capgemini and many others are finding both positive and negative consumer opinions about AI, generally in equal measure. So whilst the growth of AI is inevitable, its acceptance isn’t – and that is something for brands to be aware of.

The positives for business, as you’d expect include speed, reduced costs, data analysis etc., and the likes of machine learning and artificial neural networks delivering customer insight to produce better targeted and time offerings and better experiences, which encourage consumers to spend more. For consumers, functions like voice technology makes searching, comparing, booking and ordering easier and quicker with 24/7 accessibility, and the advent of 5G will shift the game up a gear yet again.

Some of the negatives, as you’d also expect, revolve around privacy, security, misuse of data, the lack of empathy and human interaction and simply that AI is seen as being there to benefit the business before the consumer. These concerns correlate with other research like CultureQ which shows how consumer attitudes are turning away from overtly profit focused businesses, and brands, to those that demonstrate there’s also a greater good at the heart of the business model and the brand is seeking to and able to satisfy a series of social and cultural criteria as part of doing business.

Consumer Mistrust

The general awareness of AI among consumers is high, but their opinions are divided about its trustworthiness. On the one hand, it’s seen to produce positive experiences and to be improving lives and enriching society in many ways. On the other however, there’s a general mistrust in what AI can do, is designed to do, its cold commerciality and how it might be used to influence or manipulate behaviour. Various sources put the balance between positive and negative perceptions at around 50:50 (some much higher at 70%, some much lower at 30%, depending on the perspectives of the source it’s coming from), and this split is relatively consistent across the world.

Consumer mistrust is being fuelled not only by the rapid developments in AI and natural concerns around the pace of change, but also by high profile media, business, scientific and political figures: “With artificial intelligence, we are summoning the demon,” said Elon Musk; Dr. Stephen Hawking, Bill Gates, Apple co-founder Steve Wozniak and many others have expressed concerns over a world in which AI surpasses human intelligence and what it could do as a result. Consumer concerns are also being driven by highly publicised poor security, safeguarding and manipulation of data by unscrupulous or ignorant businesses, and governments (as amply demonstrated in political manipulation, cybercrime, etc.).

Despite all the good things that AI quietly does and can do, these high profile and seemingly incessant happenings start to affect the fundamentals of trust – trust in the policies and practices of businesses in general, which in turn fuel questions around a brand that is directly connected, and consequently about any associated brands where AI and data collection and usage are part of the business model. Looking forward, we will continue to see matters of privacy and security grow in importance – as strange as it may sound in our social media hyper publicised personal lives, privacy is felt intensely personally and is highly valued, and brands are becoming the guardians of our privacy and security since we can’t avoid sharing our personal details with them.

As consumers become familiar with AI and increasingly aware of artificial general intelligence (AI systems with general human cognitive abilities) they worry that AI will make specific choices on their behalf without them knowing or being able to reason with it; consumers – you and me – want to feel we have some control and we don’t like to be fooled.

Accountability

Another quirk of AI is it puts distance between the consumer and the brand. A brand is intangible, but they are not inanimate in the way people relate to them – a brand is a proxy for the people behind the business and the values, ethics and principles by which they and therefore the company does business. In other words, brands are prescribed human traits, at the heart of which are the points of reference for trust.

Brands are how companies are held accountable. A company (and therefore the brand as far as consumers are concerned) has both the control and therefore responsibility for its use of AI, management of their data, etc. Failure to do so properly and in line with the values of the brand and its consumers (individually, socially and culturally), risks damaging a brand, particularly trust in the brand. AI can create a sense of loss of control, disenfranchisement or detachment rising from the current general lack of empathy AI can display. Many AI driven businesses are trying to counter these negative associations through rebranding Artificial Intelligence as Augmented Intelligence – emphasising how AI is designed to enhance the human experience rather than overtake it, and introducing other human like features like voices such as Siri, Alexa, etc. Consumers do generally see the positives, but there’s a dichotomy to be managed and any dichotomy contributes to mistrust, something no brand wants to be labelled with.

An up and coming consideration is that whilst AI reduces choice apathy and exhaustion with more targeted offerings and making choices on the consumers’ behalf, they wonder what are they not seeing? Another is AI is reducing brands to being commodities in consumers’ minds – comparison sites and the likes, useful as they are, encourage choices to be based on cost and ratings (which in themselves are being increasingly publicised as disreputable). The very basis of a brand is its ability to charge a premium for its products and services, if they are reduced to a commodity, it’s a price war and race all the way to the bottom.

Integrating AI into brand strategy

AI (weak and strong), analytics and big data can be pivotal in defining a brand, its personality and positioning. Data-driven insight is just as important to the ‘why’ of brand as it is to the ‘what’ of marketing.

Companies that need consumers’ acceptance of AI can align and embed it more deeply into their strategy and demonstrate a deep care for the consumer and their 24/7 immersive online welfare. Reinforcing the human connection, social currency and cultural purpose of the brand are of course fundamental and will need greater emphasis in a strategy and brand to compensate for the growth in automated processes and interactions. So too will implanting attributes of data management and protection more heavily, as well as being transparent in communicating those efforts. Policy, as much as visions and values, is therefore beginning to play a bigger role in a brand strategy and the net reputation of a brand going forward.

When a brand engages more deeply and operates more transparently with its customers, it changes the nature of the promise at the core of its brand. For example the ‘humanisation’ of AI will grow by the day and the possibility of say, delegating the mundane to a Virtual Personal Assistant is exciting for consumers and a significant revenue driver for businesses. However, since brands are prescribed human traits and are the face/voice of a brand, a VPA will need its values, character and ethos to be aligned with both the brand and the consumer (including the ability of the VPA to align with the individual characteristics of the consumer’s personality and to understand human emotions).

Brand strategies are moving towards becoming more adaptable and willing to be less rigid at the peripheries, such as through communications, marketing, advertising, internal culture management, etc.; although not necessarily at their core. Consistency will always be essential of course. Building in a more fluid framework into brand management and expression is done by encapsulating the totality of the experience itself, including the brand’s value beyond the product at the individual, social and cultural levels, internally and externally.

AI is a highly valuable business tool; one that is growing exponentially and it will continue to grow in business and society particularly given the advent of 5G and the growth of IoT enabled devices. AI should be used in defining a brand and brand strategy. A particular focus is AI being designed to identify insight and learning what certain audience segments share or don’t share in the brand, what they do or don’t respond to, which messages conflict with the brand’s values, etc., and therefore incorporated into how a brand strategy is adjusted accordingly, whether at the DNA level, or more likely at the brand story and narrative level.

The basis of consumer relationships is inevitably founded, built and maintained according to human, not machine, rules of interaction and transaction. This means there needs to be a greater focus on the human in how AI is defined, aligned and activated through the brand. Involve CIO’s in the process. It’s not their natural territory, but it means they are involved in defining how to augment a consistent, brand-aligned experience while maximising a brand’s delivery to both the top and bottom line.

Let’s discuss this – we’d welcome your thoughts, observations and feedback.