How Brands Can Navigate an AI-Enabled Marketplace

Brands need a strategy that incorporates generative AI.

• There is a reason ChatGPT drove Google to create a “Code Red” team.
• There is a reason Meta, Baidu, and others are on the verge of releasing their own versions of the “Chat Generative Pre-trained Transformer.”
• There is a reason Microsoft is integrating this new technology across their product and service portfolio.
• There is a reason Al has both boosted valuations and, just as quickly, dropped share prices.

ChatGPT is a giant leap forward in Al; capabilities we didn’t expect to see before 2030 are available today. The sudden availability of this technology has brought with it challenges and opportunities for brands of every size, and this impact cannot be ignored.

AI is no longer the Future, it’s the Now.

As ChatGPT remains in the zeitgeist as ghost writer, exam taker, and creative director, it’s important for brands to acknowledge this wholly new consumer interaction point.

We’re partnering with the world’s best brands to evolve and refine their strategies, positioning them to thrive in an Al-­enabled economy. Accomplishing this requires an understanding of three areas:

1. How AI is positioned to disrupt your brand, category, and customers;
2. What emergent needs are revealing themselves in light of this technological development; and
3. What your organization’s capacity is to respond, now and as the future of ChatGPT continues to evolve.

What is ChatGPT and how did we get here?

Put simply, ChatGPT is a conversational technology that provides human-like responses to questions or prompts submitted by a human user. It relies on sophisticated artificial intelligence, using text databases from the Internet.

Markedly different than the Al platforms that have come before it, ChatGPT is seeping into the consumer landscape in ways that can make or break the relationships brands have worked so hard to develop with their customers. What began in late-November as a pervasive topic at the watercooler has since blossomed into a cultural disruptor, with industry titans rapidly entering the space over the last few months.

Google’s ability to introduce its competitor, Bard, within three months of ChatGPT’s launch is the culmination of years of R&D, after publicly shifted its strategy in March 2017. Google, Meta, Microsoft, Baidu and others consider Al to be a foundational pillar of their long-term strategies, and businesses of all shapes and sizes must consider how, not if, they will adapt. After all, technologies rarely kill businesses-but inflexible strategies and reluctant leaders do.

Why does ChatGPT matter to brands?

With the growth of Al, consumers may discover and interact with a brand’s personality in ways marketing teams will no longer control.

Consider the past 10 years you have spent cultivating your brand personality. You, like many other brands, have used media and advertising to build and position yourself meticulously. From paid search to shelf-placement, these are levers you’re accustomed to pulling as you seek to influence consumer behavior in your favor. These direct interaction points provide brands with control; yet, Al is positioned to grow the prevalence of indirect interaction points (like product reviews and word of mouth) where brands are at the mercy of other inputs, including algorithms.

Take for example a simple inquiry about cheese.

As consumer journeys evolve alongside the new interaction points enabled by this technology, ChatGPT and its competitors are positioned to drive (or limit) brand awareness, frame consumer perceptions in favor of (or in conflict to) brand positioning, as well as erode (or strengthen) the importance of word of mouth as consumers place varying levels of trust in these platforms.

The Top 4 Considerations For Successfully Adopting AI Right Now

1. Evaluate where AI might fit into your business

We’ve seen how brands and agencies have adapted alongside new touchpoints in the past, creating teams dedicated to Search, Online Video, Social, and others, for example.

Given the speed with which we’ve gone from “How Generative Al Is Changing Creative Work” to “ChatGPT May Be Coming For Our Jobs,” brands must consider how these new technologies can be leveraged to advance their brand and business objectives: will convincing Al be the next skillset brands need to develop? Or the next co-worker they learn to trust?

Equally important, brands must consider whether their current technologies are flexible enough to integrate these new tools and systems, if at all.

If a brand’s strategic agility is limited not by vision or aspiration, but by antiquated and disconnected systems, it risks becoming irrelevant without outsized investments to reach a point of parity.

CHATGPT – CONSUMERS IN THEIR OWN WORDS

2. Don’t get left behind with AI, but tread cautiously.

Public reaction to ChatGPT has been fascination followed quickly by mixed outlooks on business and cultural implications. As brands consider how and when to incorporate innovative technologies like Al, they need to acknowledge that the way it is being received has been similar to prior disruptive technologies: there’s neither universal fandom nor aversion.

Brands know it’s important to be consumer-led.

Taking the active steps to build out experiences that capitalize on automation and augmentation will be critical in building long-lasting relationships between brands and their customers.

CHATGPT – CONSUMERS IN THEIR OWN WORDS

3. Understand the evolving conversation around ChatGPT and generative AI.

Material recently explored the ChatG PT conversation landscape across a quarter million online conversations to quantify and illuminate consumer reactions. On the surface, there’s undeniable momentum behind ChatGPT:

• ChatGPT conversation volume between November and December 2022 grew exponentially with an 878x increase.
• To put this in perspective, that is 125x greater than the largest month-over-month increase for NFTs¹. To take this comparison further, within months of NFT’s popularity, some of the largest global brands were jumping on board and investing.

This time, the businesses introducing Generative Al are the world’s most valuable companies who equally depend on their success of this latest endeavor. All the same, companies will need to keep a pulse on how the dominant conversation around ChatGPT and similar advancements continues to shape (and be shaped by) the social landscape.

CHATGPT – CONSUMERS IN THEIR OWN WORDS

4. Understand the implications of consumer feelings about AI.

While news coverage is full of buzzwords like neural networks and generative texts, Material can go deeper, uncovering the underlying mix of consumer emotions from wonder and excitement to worry and fear spurred by the promise of increasingly consumer-facing Al. Material identified unique discussions around sentience and societal implications as consumers stumble across practical applications which stretch beyond the creativity, discovery, and artistry of ChatGPT’s predecessors:

• For some, these are innocuous use cases with meaningful benefits, like expanding cooking repertoires or increasing productivity across menial work tasks.
• Others, however, see yet another prospect for bad actors to sow misinformation to the masses. When discussing ChatGPT specifically, consumers are 1.4x more likely to express being terrified or scared of its proficiencies compared to the AI conversation at large.

The challenge for any brand wishing to adopt a more consumer-facing Al will be quelling consumer fears surrounding its potential for disruption while capitalizing on the opportunities it may present.

CHATGPT – CONSUMERS IN THEIR OWN WORDS

The Path Forward with ChatGPT

ChatGPT will tell you that “it is important for brands to focus on delivering clear and tangible benefits to customers, such as increased convenience, speed, and accuracy of information. This can help increase customer satisfaction and brand loyalty.”

While we certainly think this is sage advice, what’s missing is how to move consumers away from the “scary” and startling disruptions that this technology presents, and instead push consumers towards seeing the positive and tangible value it brings.

To adopt AI technologies like ChatGPT successfully, we recommend the following initial steps…

Explore

Social Analytics comprising a rich, hybrid qualitative and quantitative exploration of how Al is intersecting your brand, category, and customers, the perceived functional benefits and acknowledged fears of this technology, and category-specific opportunities.

Measure

Concise Awareness & Usage (A&U) among your core audience to quantify the impact of Al perceptions on consideration (or other KPls), as well as to size and-prioritize functional and emotional benefits, solicit customer-input on relevant applications, and to inform strategies that most effectively deepen consumers’ relationship with your brand.

Activate

Workshop to align, build momentum, and organize activations. We will also fuel future strategy with a playbook of identified levers to pull among key audience groups and segments. Our workshop and playbook will consider an organization’s strategic and technical capacity to evolve.

We look forward to discussing your specific situation to customize an approach that gets you the best results.