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The rise of the programmatic consumer

News, 03 October 2016

LONDON: Programmatic marketing is increasingly being matched by programmatic consumption, in which consumers avail themselves of algorithms to make decisions on their behalf, so saving time and attention for other things.

According to J Walker Smith, executive chairman of Kantar Futures, this "Know-Demand Economy" requires marketers to radically rethink how they interact with customers.

Writing in the current issue of Market Leader, he observes that consumers don't simply spend money when shopping and buying, but also the currency of engagement – or the time and attention it takes to shop and buy.

"This is off the books for marketers, yet the currency of engagement is a real expense for consumers, and it can no longer be taken for granted that consumers will pay it."

And this is what is driving a form of marketing resistance, which, he suggests, is not so much about dislike, annoyance or fear as a disinclination to pay that engagement cost.

Ad avoidance is nothing new, but the proliferation of channels has introduced "a problem of capacity" and that is one reason for turning to the recommendations of fellow consumers.

"Other people have done all of the work already, so utilising their information and guidance lowers the costs of engagement."

Another way in which consumers can achieve the same end is through the use of smartphone apps that operate as personal algorithmic assistants to make decisions for them.

"Pretty soon, people will be using their smart appliances and other devices in this way too," Walker Smith notes, citing the "endgame" for Amazon Dash, in which the appliance itself will automatically reorder when supplies are low.

"On-demand is the buzz of the moment, but know-demand is the future," he says. In this environment, however, "the consumer evaluative process goes away, or is at least significantly truncated", as algorithms take in information and assess it before matching it against a consumer's preference profile and then selecting and ordering the best option.

So, in the not-too-distant future, "the marketing objective of getting into a consumer's consideration set will give way to getting into a consumer's preference profile".

And new areas will need to be addressed, such as marketing during usage – which will become the moment in the consumer journey in which to build brands directly – and how to reward consumers for less engagement rather than more.

Data sourced from Market Leader, additional content by Warc staff