I first discovered it months ago. Sometime late in April, I think. But now I just can’t seem to avoid it anymore.

Before I do anything online these days, I always have to take the same first step: skip the bloody advertisement video served up by a damn stockbroker.

I just can’t seem to escape the little video. It’s the same broker serving up the same spiel with the same music every time. No matter how many times I delete it, it just keeps coming back.

I know the script backwards at this point. The music is driving me insane. And the ad pops up on every single news source, social media and website I go to.

My life is beginning to feel like Groundhog Day. Except it repeats every few minutes instead of each day. Every click I make risks snapping my sanity.

My family think my electronic devices are possessed because of all the abuse I hurl at the screen each time the ad pops up again and again.

At this point, my memory is getting iffy because every action I take online is preceded by the same fifteen second clip about how wonderful this particular brokerage is. By the time I’ve hit the ‘skip’ button, I can’t remember what I was going to do.

I can’t imagine how much it’s costing the broker’s marketing department to serve up the same ad dozens of times a day.

If persistence could’ve made me sign up for an account, I would’ve done so months ago.

Which begs the question why the ad spend managers on the campaign are still trying so hard to get me…

They’ll never succeed, for a simple reason. I already have a brokerage account. With the same brokerage…

Yes, I’m paying trading fees to my broker so that they can use the money to advertise my own account back to me.

Wonderful.

In fact, the idiots at whatever marketing agency they use only started advertising to me after I signed up.

Why is my stockbroker advertising to me?

Why are they telling me about how wonderful their “platform” is while I post complaints that they still haven’t released my tax summary for the last financial year?

Well, I’d love to know why…

But there’s a more important question: how much of online ad spending is for products already owned by the poor buggers stuck watching the ads all day?

Investors would frame the same question a little differently…

What would the revenue of Google, Facebook and Amazon look like if this pointless advertising problem were ever fixed?

Misdirected ad spend is the AI boom’s hollow “core processor”

Over at Strategic Intelligence Australia, we recently published an analysis along some rather similar lines. But added an angle focusing on AI, just to make the piece look more fashionable.

You see, the companies fuelling the AI boom are largely the same ones selling huge amounts of online ads. This means that ad spend dollars from everyday businesses is being used to fund AI development and data centres you hear about.

If that ad spend were to drop, you’d likely see a flow-on effect in AI investment too.

The irony is that AI’s analytical prowess might well be how we stop serving up ads to the wrong people.

Put the two ideas together and you come to an interesting conclusion: AI is about to destroy itself by pointing out there’s no need to advertise a product to people who already have it. Without that wasted ad spend, who will pay to develop AI in the first place?

Now, that’s not quite what I’m predicting.

It’d make for a good newsletter headline though, wouldn’t it?

And all investors would instantly know when to short the NASDAQ in anticipation of AI’s imminent self-destruction: the moment your online ads start actually being relevant to you…

Unfortunately, what’ll actually happen is less entertaining. But it could be more profitable…

Hoisted on their own petard?

The point here is that AI is supposed to make us all more efficient. It’s supposed to uncover that I already have a brokerage account with the company paying to advertise the account I already have.

Wouldn’t it be ironic if online advertising companies like Facebook, Google and Amazon develop the AI that makes their own online advertising more cost efficient?

Actually, it wouldn’t be.

Efficiency gains are good for everyone. Except the inefficient who get left behind and have to find something else to do instead. But that’s the price of growing prosperity over time.

Let’s say AI helps ensure that existing customers don’t see ads for products they already have. What happens next? Does total ad spending fall?

Nope. Someone else’s ad will begin to appear instead, advertising a new and different product. One that the customer might actually want.

Perhaps the ad will even be replaced by someone who understands that bad ads make me less likely to buy their products…

Either way, we’re not talking about a “bad” disruption to ad spend from AI. We’re talking about higher productivity for marketing spend.

Better returns on ad spending would allow businesses to increase how much they’re willing to pay to show an ad to you. That competition could drive up ad revenue for online ad companies, not down.

AI’s skills could improve ad spending in other ways to. If it can help exclude existing customers from seeing an ad, it can also track whether a customer who saw an ad became more likely to buy a product.

That connection is a marketer’s dream. Or worst nightmare. Because it would justify, or disprove, how the marketing budget was spent.

Not everyone knows when their advertising budget is being wasted. The feedback is not always as obvious as it was for Bud Light or Jaguar after their “campaigns.”

AI could mean we are on the cusp of a revolutionary improvement in the quality and targeting of the ads we see.

The ad space in my online life is not the only arena this’ll occur in. AI can revolutionise countless other industries too.

The big question is which industries AI will improve next. Investors who can predict which industry will profit from AI can harness that trend by buying the right stocks. Here’s the one I’m betting on.

Regards,

Nick Hubble,
Editor, Strategic Intelligence Australia