AI Nudges Experiences Forward
Marketers are always looking for bright, new ways to engage customers and make their lives easier. Enter nudge theory, conceived by Nobel Prize-winning economist Richard Thaler.
by Alastair Cole
Posted on 04-21-2018
This article is part of CMO.com’s March/April series about emerging technology. Click here for more.
Marketers are always looking for bright, new ways to engage customers and make their lives easier.
Enter nudge theory, conceived by Nobel Prize-winning economist Richard Thaler and Harvard Law School professor Cass Sunstein in 2008. Drawing on behavioral economics and choice architecture, nudge theory proposes that positive reinforcement and indirect suggestions can influence the behaviour of groups and individuals. For example, to persuade shoppers to eat better, a supermarket would display its healthiest food at eye level on store shelves.
Now, imagine these nudges harnessing the collective power of creativity, technology, and data. What you get is the next generation of intelligent influence. Powered by artificial intelligence (AI), these “new nudges” will initially enhance recommendation engines before being used to craft fully rounded creative ideas that affect behaviour change.
We know that personalised product suggestions keep customers engaged longer. In a 2017 study of U.K. fashion brands, sites with the best recommendations generated 140% more page views per visit.
Two major forces are driving the current surge of interest in recommenders. The first is that the cost for companies to convert customer data into predictions is coming down. The second is a new wave of new startups, services, and products that are offering off-the-shelf machine-learning capabilities at enterprise levels.
A major benefit of recommenders is that they create virtuous circles: The more they’re used, the better they get. And the better they become, the more they’re used. For example, Pinterest’s Related Pin recommendation system, Pin2Vec, uses AI to predict what users will save and click on next, and is resulting in increased engagement.
Today’s biggest brands are spending millions developing powerful prediction algorithms. Tomorrow’s businesses will live and die on the strength of their contextual recommendations.
Ideas For One
As costs reduce and computational creativity improves, the power of new nudges will increase. AI will start to create experiences for specific individuals and groups.
This will require creative teams to develop new ways of working. Once they’ve crafted and tested the kernel of a brand’s “big idea,” they’ll curate and iterate the best variations offered by AI. Close collaboration between humans and machines will enable us to engage customers in currently unimaginable ways.
Advertising will evolve from engaging customers as “markets of one” to inspiring them with “ideas for one.” Our ability to anticipate people’s needs will improve to the extent we’ll be able to influence them in a pre-moment of truth—even before they begin researching products.
Ideas for one will be more powerful because they’ll be more tailored, and they won’t work for the masses. They won’t be talked in the playground or at the pub in the same way that yesterday’s big ideas were. Instead, they’ll be talked about by families and friends, and with more gusto than ever before.
The Time To Act Is Now
Art and science have always been closely aligned, and computational creative has the potential to be a fully functioning, real-time, one-to-one communications channel. It will deliver enhanced consumer experiences that directly translate to the bottom line.
McKinsey estimates that in 2017 only 20% of firms used AI technology. A review of more than 160 use cases showed that AI was deployed commercially in only 12% of cases.
It’s time for advertising to open up, and explore the benefits of bringing technology and data into the creative process. A new wave of customer influence is arriving to further enhance people’s lives—and it’s powered by new nudges.
Topics: Experience Cloud, Insights Inspiration, Digital Transformation, Digital Foundation, Analytics, Marketing, CMO by Adobe
Products: Experience Cloud, Target