The real risk of AI is marketing commoditization

One of the biggest traps in marketing research and technology today is mistaking speed for impact. We’re focusing on doing more, being more efficient, and creating the next AI business. But we’re forgetting some of the fundamentals.

The Red Queen hypothesis is an excellent metaphor for what’s happening in our industry right now. It suggests that when everyone adopts the same tools and optimizes for the same efficiencies, competitive advantage erodes and markets drift toward commoditization.

The idea comes from a scene in Lewis Carroll’s “Through the Looking Glass,” where Alice and the Red Queen sprint as fast as they can, only to get nowhere.

Inspired by that passage, evolutionary biologist Leigh Van Valen proposed the Red Queen hypothesis. Simplified, it posits that in an environment where everyone else is evolving, any given organism must evolve just to survive.

That doesn’t just mean becoming better suited to your environment. It means remaining competitive with all the other organisms vying for the same resources — even as they evolve.

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Why efficiency is the wrong goal for AI-enabled marketers

Many companies are using the current technology shift to focus on efficiency. It’s true that using AI can greatly improve efficiency in almost all aspects of our business. We can go faster.

But as we do so, all our competitors will move faster too. Like the Red Queen, we’ll run and run, without gaining an inch.

How efficiency provides a symmetric gain that leads to commoditization

The problem with a focus on efficiency is that it’s a symmetric gain. In other words, it’s open to everyone.

For example, say your business strategy revolves around better and more widespread use of ChatGPT, Gemini, and Claude. But everyone else has access to the same tools and approach.

As a result, you’ll run and run, but your competitors will stay with you. You and everyone else who prioritize efficiency will be caught in a spiral of commoditization. Your margins will shrink, and the only winners will be the companies you pay for token usage.

Neglecting to exploit these technologies for efficiency is an even worse proposition. But if your strategy ends at efficiency, be prepared to fight in a commodity market.

How to get ahead by making an asymmetric impact

You need to find a way to have an asymmetric impact. This means you need to have, or know, something your competitors can’t. Rather than thinking about competition, start focusing on disruption.

Say you’ve been selling widgets for 30 years. Instead of working to become the most efficient widget seller, think about what will make widgets irrelevant — and how you can make that happen.

How to reframe disruption in the context of loss aversion

Think about disruption through the lens of loss aversion. Psychologically, people feel more pain at losing something than they do joy at gaining it.

But I find it more useful to turn the equation around. As someone who likes to regularly declutter my life, I prefer to ask: “If I saw this in a thrift store, would I buy it?” Instead of asking whether I want to keep it, I ask if I would want to gain it in the first place.

What to ask yourself to maximize disruption and impact

More frequently, we need to ask: If I were considering starting this business from scratch today, would I do it? Assuming the answer is “yes,” the next question is: How would I do it, and what do new technologies allow me to do that I couldn’t do back then?

We should focus less on running the business more efficiently and more on evolving the business as a startup would. Because if you don’t, someone else will.

The questions that define the next phase of marketing growth

These are the hard questions that every company needs to be asking right now. Those who focus on efficiency alone will end up running like the Red Queen and getting nowhere. Those who ask and answer these harder questions about disruption will set themselves on a path of evolution and asymmetric impact.

The post The real risk of AI is marketing commoditization appeared first on MarTech.

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