‘Brands Will Be Selling To Algorithms Rather Than To Consumers’

The rise of sensors will totally change how and to whom—or to what—marketers market, said J. Walker Smith, executive chairman of The Futures Company, who opened the Strategic Summit track of &Then, the DMA’s annual conference.

J. Walker Smith, executive chairman of The Futures Company, opened the Strategic Summit track of &Then, the DMA’s annual conference, by telling the audience at the Los Angeles Convention Center that we are “moving from the data age to the human age,” and less will mean more in the marketplace of tomorrow.

“In less than a decade,” Smith explained, “we have lost the ability to navigate our life without technology and data. It’s a necessity today, and not a luxury.” This is a new type of human experience that’s being fueled by the ubiquity of mobile connections and devices, he noted. “By 2020, there will be 6 billion smartphone connections worldwide. Think about it: Just about every single adult on the planet will have the same device and capabilities in their hands, and mobility will take over the user experience,” he said.

But the most fundamental change, Smith said, is the rise of sensors. “The screens that we carry around with us will have sensors behind them,” he explained, “so we can passively maintain our lives while the sensors and technology actively handle the details.”

Smith suggested that sensors will be doing this in most every category you can think of. Biometric headphones will choose music for us based on our mood; sensors in a cup will monitor our intake of vitamins and minerals as we drink; smart toothbrushes will keep track of our brushing habits and send that information to our dentist before a visit; sensors in shoes will be connected to Google Maps and will tell us how to get somewhere; sensors in our ovens will cook our meals perfectly; and sensors in a necklace will determine our caloric intake based on how we chew.

And what does this mean for marketing? Well, Smith said, it will totally change how and to whom—or to what—marketers market. According to Smith, all of this presages the coming of the “personal algorithmic assistant,” which will take over and make choices for the consumer based on the data it has processed. “This is the way consumers will navigate the internet of things,” he said, “and it means that brands will be selling to algorithms rather than to consumers. It will be all about ‘preference profiles’ rather than ‘consideration sets.’” Marketers will, therefore, have to focus more on post-purchase initiatives because the original choice will have been based on crowd ratings accessed by the personal algorithm.

But, he said, the history of the internet is about making connections and relationships, not about moving data and information—something marketers must pay heed to, even as the new technology takes hold. “It is all about social connections,” he said. “We started out with the ‘material marketplace,’ moved on to the ‘experience economy,’ and we are now in the ‘social marketplace.’” People want to belong, he said, and brands must be “relationship-central.”

“The new way is based on ‘social currency,’” Smith concluded, “and it is up to brands to facilitate and foster people-to-people connections—that is, the ‘kinship economy.’”