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The real applications of artificial intelligence are skyrocketing. According to the World Intellectual Property Organization (WIPO), patent applications for AI almost tripled between 2013 and 2017, increasing to more than 55,000 applications. This increase in patent activity reflects the ongoing gold rush in the field of AI. It can be expected to become essential in almost all sectors.
The rapid increase in the number of artificial intelligence applications has also raised concerns that such technologies pose a threat to consumer privacy by allowing companies to observe the users more closely. But I think we will actually see the opposite effect: instead of diving deeper into the personal lives of consumers, the AI could become a true privacy protector.
With great power …
In marketing, I've heard some people say that artificial intelligence applications are only talkative and little action. But that does not tell the whole story. All of the company executives I talk to mention AI as one of the company's top three marketing priorities, even on top of other popular concepts like blockchain. In marketing, the desire for AI is high and companies are beginning to invest in this area.
That said, there is still a lot of confusion around concepts and terminology when you talk about AI in the marketing field. In fact, I would say that almost half of what is called artificial intelligence in presentations and industry debates is not at all an artificial intelligence, but rather simple algorithms. This is not a trivial distinction. With the algorithms, the output is as good as the data that is continuously introduced. With AI, the system learns, evolves and extrapolates over time. We can come to conclusions that were not originally introduced.
This distinction is important because, over the next few years, many domains currently controlled by algorithms will become more focused on AI. Consider customizing the content of ads, for example. Algorithm-generated dynamic ads have been in use for some time. But in the future, AI will help generate these ads on an individual basis and thus achieve higher response rates.
… comes a big responsibility
It is understandable that the concept of true individual marketing raises issues of confidentiality. With the GDPR already in place – and with the future ePrivacy Regulation in the EU and the California Consumer Privacy Act in the US – is not personalized advertising based on artificial intelligence abandoned? On the contrary, in fact.
In reality, artificial intelligence has nothing to do with personal data. By using AI (compared to simple algorithms) to target advertising more effectively, the importance of personal data will diminish. If an advertiser can reliably identify a type of consumer based on online behavior, he does not even need to know who this person is to be able to deliver the ad optimally. It's the power of AI and its next-generation learning capabilities. He will be able to determine trends and recommendations from the online behavior of users, thus generating perfectly created and placed ads. At the moment, advertisers need personal data to achieve the same effect. AI can help make this happen anonymously.
Of course, this does not mean that data collection and regulation will become obsolete. When businesses interact directly with consumers, they will always want to collect data that allows them to deepen the relationship. But these internal data relationships are desirable on both sides and well understood by consumers. This is the behind-the-scenes collection, sale and trading of data – the most inconvenient activity for consumers and regulators – that will become much less useful in an AI-driven marketing world.
Like any emerging technology, artificial intelligence has potential for exploitation. That's why it's so important to educate the public about AI capabilities and real-world applications. As in many areas, transparency must be the guiding principle of our industry with respect to AI applications in marketing. By focusing on collaboration and raising the number of good actors within the sector, we can steer the new AI capabilities to a place where they appease rather than aggravate consumer concerns about privacy.
Arndt Groth is president of Smaato.
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