Wednesday, March 15, 2017

SXSW Day 3 session 3: AI Replaces search: the future of customer acquisition

A panel discussion with Amanda Richardson (Hotel Tonight), Brian Witlin (Yummly), Charles Jolley (Ozlo) and Rangan Majumder (Microsoft).
The panel discussed how AI, specifically through the voice personal assistant (e.g. Siri, Cortana, Google now, etc.), will be supplanting search.

With search, you get back a list of results from which you can choose.  With a voice personal assistant, you typically get back only one result, and that's determined directly by the assistant operator (Apple, Google, and such).  How do companies make sure they are selected to be the one result?  The assistant provides the assistant operator power over the service provider, especially aggregation service providers (sites that aggregate hotel services, like Hotel tonight for example).  The operator can select whoever they want, making a deal with one provider to the exclusion of all others.  A more likely scenario would be real-time bidding: if I say to the assistant to find me a hotel in Austin, the operator can hold a real time bid among all hotel service providers, and the one that wins the bid is the one that gets used (like in advertising).
The problem is that even if you win the bid, it doesn't mean that the consumer is necessarily exposed to the service provider - they may only be exposed to the end product.  Taking the hotel example from above, even if HotelTonight wins the bid and provides a hotel offer of Marriott in downtown, the assistant will communicate which hotel it selected, and not that it got it on HotelTonight.  That means that HotelTonight will lose the customer relationship, which is today one of their key assets.  So these companies will need to shift their monetization strategies to anatomized services.

Strangely enough, the representatives on the panel didn't seem to be very aware of the implication a move to digital assistants would have on their companies, or didn't seem to mind.  I asked the panel directly whether they are not concerned the digital assistant will turn them into a backend database service, and their potential to lose all customer relations.  Amanda Richardson challenged me back asking why they would need to own the customer relations; they get paid per hotel booked, so they just want to get bookings.  I think she's missing the bigger picture, but perhaps there's something I myself am missing.  At any rate, the digital assistant seems to me to be spelling a bleak future for these types of companies.

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