"The Intersection of Customer Acquisition Chaos and AI's Burden of Knowledge"

Kazuki

Hatched by Kazuki

Aug 06, 2023

4 min read

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"The Intersection of Customer Acquisition Chaos and AI's Burden of Knowledge"

Introduction:

In the ever-evolving world of commerce, customer acquisition has become a chaotic process. From the earliest forms of trade to the $26 trillion global market we see today, the methods of acquiring customers have transformed significantly. At the same time, artificial intelligence (AI) is revolutionizing the way knowledge is acquired and utilized. In this article, we will explore the common points between customer acquisition chaos and the burden of knowledge carried by AI, as well as provide actionable advice for brands navigating these challenges.

The Dominance of Amazon in Search-Driven Shopping:

When it comes to search-driven shopping, Amazon has established itself as the dominant player. With 74% of online shopping searches in the U.S. originating on Amazon.com, the e-commerce giant has been able to build a formidable advertising business. This dominance has contributed to Amazon's rise as a top-5 global business by advertising revenues, with its ad revenue reaching $30 billion in 2022. As customers increasingly turn to Amazon for their shopping needs, brands must consider how to navigate this new landscape.

The Importance of Discovery-Driven Shopping:

In contrast to search-driven shopping, discovery-driven shopping is all about serendipity. It involves wandering around, browsing, and deciding what to buy based on personal exploration. While social commerce has not taken off to the same extent in the U.S. as it has in China, companies like Instagram, Pinterest, and Facebook Marketplace have incorporated commerce into their platforms. This blending of social and commerce provides brands with additional avenues to reach customers and drive discovery-driven shopping experiences.

The Dilemma of Advertising: Direct Response vs. Brand Advertising:

When it comes to advertising, there are two primary types worth considering: direct response advertising and brand advertising. Direct response advertising aims to drive immediate transactions, while brand advertising focuses on building long-term brand equity. Direct response advertising currently accounts for approximately 80% of all digital ad dollars spent online. However, brands must strike a balance between these two types of advertising to ensure both short-term conversions and long-term brand growth.

The Rise of Influencer Marketing and Its Limitations:

In recent years, influencer marketing has gained significant popularity, growing from a $1.7 billion industry in 2016 to a projected $16.4 billion in 2022. Influencers play a crucial role in discovery-driven commerce, but the current influencer marketing model is flawed. Many influencer campaigns rely on upfront lump-sum payments and discount codes for tracking attribution, leading to poor ROI and inefficient scalability. Brands need new channels and approaches to influencer marketing.

The Potential of Creators as a New Channel for Brands:

To address the limitations of traditional influencer marketing, brands can tap into the power of creators. Creators offer a unique value proposition for brands, aligning with their goals of acquiring new customers profitably, controlling brand promotion, and measuring results effectively. By partnering with creators, brands can leverage their creativity and authenticity to drive customer acquisition in a more efficient and measurable way.

The Burden of Knowledge and the Role of Artificial Intelligence:

The burden of knowledge is a concept that suggests each successive generation takes longer to reach the frontier of knowledge, requiring more education and training to innovate. This burden has slowed down innovation, as great inventors have less time to dedicate to their work. However, artificial intelligence is not burdened by this limitation. AI continuously improves without the need for education or training, accumulating knowledge we may never comprehend. As AI progresses, it raises profound questions about our role in a world where it no longer needs us.

The Growing Gap Between Humans and AI:

As AI surpasses human capabilities and accumulates knowledge at an unprecedented pace, the gap between humans and AI widens. While humans have traditionally relied on the knowledge passed down through generations to innovate, AI has no such limitations. This raises concerns about the future of human understanding and our ability to keep up with AI's advancements. We may become secondary creatures, benefiting from the wonders AI reveals without truly grasping their origins.

Actionable Advice for Brands and Individuals:

  • 1. Embrace the power of data-driven customer acquisition: Leverage the vast amount of data available to understand customer behavior, preferences, and trends. Utilize this data to inform your marketing strategies and optimize customer acquisition efforts.
  • 2. Invest in AI-driven technologies: Rather than fearing AI's advancements, embrace them as tools to enhance your business processes. Explore AI-driven solutions that can automate tasks, provide valuable insights, and improve customer experiences.
  • 3. Foster human creativity and adaptability: While AI may excel in certain areas, human creativity, adaptability, and emotional intelligence are still invaluable. Encourage a culture of innovation and continuous learning within your organization to stay ahead in an AI-driven world.

Conclusion:

The convergence of customer acquisition chaos and the burden of knowledge carried by AI presents both challenges and opportunities for brands and individuals. By understanding the changing dynamics of customer acquisition, embracing new channels like creators, and adapting to the advancements of AI, businesses can navigate this evolving landscape successfully. As we move forward, it is essential to strike a balance between leveraging AI's capabilities and harnessing the unique strengths of human innovation and creativity.

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