The Future of Advertising

The use of AI and VR will unlock unprecedented possibilities for advertising. Kevin Kelly, founding editor of WIRED US and a leading voice in cyberculture, and Toshiya Oyama, CEO of Dentsu Digital Inc., discussed the future of advertising.

Oyama: I found your new book, What Comes After the Internet, extremely fascinating. I was deeply impressed by your observation that we're at a turning point in an era of change comparable to the Industrial Revolution, and that this transformation will continue for decades.

Kelly: The digital world has now, through decades of development, assembled the fundamental technological elements. I believe significant changes will occur, particularly in the advancement of various technologies that handle people's attention—the foundation of advertising and branding.

Oyama: In advertising, leveraging digital will likely enable highly targeted ads on TV and digital signage by around 2020.

However, there is concern that the entry of major consulting firms and IT companies into this industry could erode the competitiveness of advertising agencies. I feel the digital world is undergoing rapid and profound change. To respond to this new landscape, we recently established Dentsu Digital Inc.

Kelly: In this book, I also touch on the new possibilities for advertising in the digital age. For example, providing a brand's product to influencers free of charge to spread the word online is already a common tactic.

Another potentially major influence is the mechanism of leveraging word-of-mouth to spread advertising. Embedded data in ads enables tracking, and coupled with micro-payment systems, this creates a mechanism where ads can reach places previously inaccessible.

More importantly, we are entering an era where ordinary people create advertisements. With billions of users posting content online, it's not inconceivable that we'll see an era where millions of fans freely create and distribute ads.

Major platforms will be the ones efficiently distributing these new ads. Companies like Facebook and Tencent will likely get involved eventually. Your company should also consider this.

 

Oyama: Since we're on the side providing customized solutions to clients, we want to collaborate with various platform operators and startups to create these solutions together.

Kelly: It doesn't have to be the first mover. Just as Facebook wasn't the first social media platform.

Oyama: What interests us most right now is the potential of artificial intelligence (AI).

First, we're exploring how it can be applied to find the right people and deliver ads precisely to them. Improving delivery accuracy alone could yield significant results. Next, we hope to apply it to creative work—where AI learns from existing know-how to create clever ads.

Kelly: Advertising creative is challenging, but I believe tools where AI assists will be available within 20 years.

On the other hand, processes like data matching should be usable within five years. I think it will soon be involved in labor-intensive tasks like personalization and mapping influencer activity.

AI software is already available via the cloud, allowing experiments to start immediately. To gauge future potential, I recommend testing various types of services.

Oyama: Kelly also emphasized virtual reality (VR).

 

Kelly: VR is seeing a lot of activity, with Facebook acquiring Oculus and Magic Leap raising funds. Major internet companies believe VR holds the key to the future of social platforms.

While there are issues like insufficient device sales and a lack of content, I believe it will be firmly embedded in our culture within the next decade.

Oyama: Content really is crucial. Recently in Japan, there was news that Perform Group, a major UK video streaming company, acquired J.League broadcast rights. If players wear cameras on their chests to capture immersive footage, and that can be streamed individually to smartphones, it could create content justifying the higher broadcast fees compared to traditional models.

Kelly: VR is a way to increase that kind of interaction. It requires using your whole body, creating very powerful interactions that generate more attention. I think this will lead to new advertising methods and possibilities.

The buzz around Pokémon GO is sparking this kind of innovation. It's now possible for advertising to enter this new world.

Oyama: I'm convinced that advertising still has tremendous growth potential if we properly address how to deliver content, how to express it, and how to capture attention.

I want to share what I learned today with employees of Dentsu Digital Inc. so they can navigate the next 10 to 20 years effectively. Thank you very much.

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Please visit the Dentsu Digital Inc. website for the full version of this discussion.
https://www.dentsudigital.co.jp/topics/2016/0810-00013/