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Not only are we seeing AI being used to find out things about our work or our studies,
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but it's increasingly being used in the world of marketing. The goal is to better connect with the
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consumer, but with the growth of large language models, do companies need to also better connect
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with the public, especially bots, because they in many cases are making the connections for humans.
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Pleasure to be joined once again by Stefano Pantoni, marketing professor here at the Wharton
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School. He recently delivered a presentation to Wharton's executive education course on this
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topic. Stefano is also co-director of the Wharton Human AI Research Program. Stefano, great to catch
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up with you again. How are you, sir? I'm great. Doing great. Thank you. Thank you, Dan. Nice to
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be here. You as well. So how much are we seeing humans rely on bots when they're making these
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decision processes, like when you're talking about in retail or some other area as well?
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Yeah, there's a lot of exciting change happening in marketing. You mentioned retail, certainly that
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is one very important domain. There are others. We were convening a group of executives as part of
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a new program on AI marketing that Eric Bradlow, our vice dean for AI analytics and myself were
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co-leading. And a lot of the conversations were in this phase. And I argue that we are basically
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undergoing two revolutions in marketing. The first one is well underway. And that revolution started
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in 2022 when ChatGPT was released. And that revolution is about search and discovery,
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how consumers find information about the marketplace. People increasingly learn about the market through interactions with chatbots like ChatGPT and others.
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The second revolution is just starting out. This year is turning out to be the takeoff year for
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personal agents. We'll talk about that later. But essentially AI agents are becoming more common.
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They're still adopted by only a small minority, but we can see that trajectory moving very fast.
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And that means that it's no longer about using LLM-powered AI agents for search and discovery,
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but actually delegating decision authority and making decisions on behalf of consumers or informing
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different steps on the customer journey. So in that sense, we are seeing increasingly
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the buying decision being co-created by humans and algorithms. So because you have so many people seemingly using ChatGPT right now, and to a degree,
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I think we still have many more people that will use it in the years ahead. How then should that
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impact the use of that technology really in the world of marketing? Yeah, so if you look at a recent paper that the team of economists at OpenAI,
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led by Ronit Chatterjee, published on what people actually do on ChatGPT, one of the three largest users was search and discovery. And of course, you can search and
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discover about all kinds of stuff. But one of the main elements of that process will have to do
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with a marketplace in some shape or form, people trying to solve a problem, people looking for a
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product to do a particular job, people learning about product category and a lot of other similar
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things, where in the past, you might have gone on a search engine like Google and then mined
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through a bunch of different links to try to explore what are the available offerings
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in a category, which brands offer which attributes at which level, for which price points,
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what is the availability of these products and everything else. Now they might do that
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more efficiently using chatbots, where you can ask a chatbot to tell you about that ski jacket
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versus that, you know, bicycle versus that whatever. And it will tell you which brand for
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which attributes that you're interested in, and then even help you design like a comparison matrix
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and point you to price points and trade-offs and help you make a decision. So take us into the
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world of the AI agent and the impacts and the bigger role that it's playing right now.
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Yeah, AI agents are basically systems. They're not just one thing. They are systems powered by language models, but that also integrate a lot of other things,
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including the use of APIs and script and other things that basically support decision making.
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And they are big in professional context, obviously, but they're also becoming big in
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consumer-facing functions. This year, we've had OpenClaw and Clawbots and Multibook, that kind of discussion where these open source agents have found very wide adoption
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in, let's say, tech-savvy markets. Then you've had perplexity, increasing revenues
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very quickly on the back of the release of AI agents. You've seen, for example,
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Anthropic releasing lots of plugins to the Clawbot to give it increasingly agentic features,
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and a lot of other examples of that sort, which shows how AI agents are, you know, after about
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a year of promise, what everybody was saying is they're going to come. They're actually here.
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So how then does this impact firms, companies, and how they have to look at their approach
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in that relationship they have with the consumer with the LLMs, kind of as the vehicle in between?
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Certainly, there are many ways in which these revolutions are going to impact the way the
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company is thinking about their marketing, or generally, they think about the way they
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interface with external environment. Some of them are quite obvious, already apparent today.
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Others are unclear. And we know things are going to change, but how exactly and for whom
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there is some uncertainty there. But for the more certain part, certainly we know that companies
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need to think very carefully about their visibility to language models and bots generally,
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so that when you type a query on GCPT or when you ask your Clawbot to do a search for you,
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it will find you as a brand and make it an available option to the consumer. Because obviously,
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if LLMs ignore you, then you're not even there as part of the conversation. So for example,
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many companies sell their products across many different platforms, many different, for example,
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e-commerce websites. And for many organizations, the back end is a bit of a mess, meaning
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that the same product might be described with different text tags or even different codes,
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depending on which platforms it's being sold on. Now, when these bots send out search queries
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across the internet to gather information to support a consumer who wants something,
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they will use the authority of the brand or the product with a very strong cue for deciding whether
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to recommend it. Now, authority can be gleaned by a lot of different sources, including customer
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reviews, including brand reputation and awards of different shapes. But one important thing is
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consistency across platforms when the bot is searching for the same products in a lot of
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different places. So if your back end is a mess and the same product is appearing as it's potentially
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to be different products on every platform, the bot will not find you. They will think that
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you are selling a very diffused set of stock keeping units and that has little authority,
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when in fact it's always the same product. It's just that the bot doesn't realize. This is one
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concrete example, which is really about getting your IT infrastructure, product coding, and
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interface with the vendor's systems in a way that supports more decision making. Now, another one
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that is quite obvious is also that your website, your own, let's say, web-facing real estate,
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has to be amenable to bot search. And the Internet that we have today is an Internet that was
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designed for people, not for bots. So it is highly visual. It supports the way that we
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like to do things. So you've got these drop-down menus that make search and navigation easier,
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but those are hard for bots. And so we need to think about what can we do to make it easy for
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bots to find information that they need on our websites. And so you started seeing now the
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emergence of protocols and standards and, you know, companies starting to release pages that
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are not designed for people, but are designed for machines. And so that is going to be a big area of
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investment and improvement too. Right. And don't companies have to also figure out a way to
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integrate the two of them together as well, right? Absolutely. We will need basically two Internets,
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one for people and one for machines. And these two Internets need to somehow speak the same
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language, meaning that there has to be consistency in the product information that, you know,
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things like availability and prices and product attributes and all the rest of it. And so we don't
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quite know exactly how to do that, but there are lots of startups and lots of efforts in this space.
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So I expect a lot of, let's say, investments and interesting innovation happen at this
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boundary between marketing, retail and supply chain. So in the presentation you made to this exec ed class, you talked about a topic that is
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very much in and around AI in general, and that's that of bias. Where does bias kind of factor into
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this discussion around AI? Yeah, the moment that we delegate the decisions to agents, then it becomes
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important to understand how do they make decisions. And we know that there is bias emerging
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potentially in language model output. Bias can mean different things depending on the discipline.
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If you are a statistician, bias is basically, you know, deviation from validity. So it's basically
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a formula. If you are more into, let's say, culture and society, bias might be about discrimination.
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And if you are a psychologist, bias might be about cognitive heuristics and biases that gets us to
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make suboptimal decisions. All of those are relevant in the context of bots. I'm a behavioral
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scientist, so basically I'm applied psychologist trying to understand how our thinking is shaping
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consumer and behavior and behavior of other individuals in the market. And so I'm especially
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interested in the cognitive bias aspect. And so it's a very weird idea where as a psychologist,
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the question you might start to ask if you're interested in the marketplace is not only,
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you know, how people think, but also how machines think. One of the things that you also
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mentioned in here, and so much of this discussion is around the technology, that there still is a human component that is going to end up being important in all of this.
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Yeah, absolutely. So the human component is important in many ways. One of them is obviously
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the consumer will want to retain control over that process to the extent that they feel that
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control is needed. And so you're going to have a sort of delegation process where consumers are
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going to learn to trust these agents, and we're going to delegate more and more authority
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as the agent demonstrates that they're doing a good job. There is that process of human interaction.
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But you also have potentially another process, which is that of thinking about then what is
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the role of human labor. Now, if you are interacting with companies today, oftentimes you interact
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through a chatbot, and that can be convenient and effective. But you can start thinking about
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the company when the default shifts away from interacting with a human service provider
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to interacting with a system like an AI system. Then the question then becomes, how would you deploy human labor to have maximum impact in the market? Sometimes you might find
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that companies can deploy humans to really signify care for the relationship, the importance of the
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customer, that we care. And so companies should think strategically not only about the deployment
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of AI labor, but also deployment of human labor, because I think doing so could really create more
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valuable relationships for companies. Do you hope that there's an overall message that is gleamed
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from this type of a presentation with the students that you had, but also companies in general?
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Yeah, my big picture takeaway of all of this is that it's not going to be human alone,
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it's not going to be AI alone, it's going to be human and AI. And companies that are smart
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about capitalizing on the collective intelligence of the organizations, both its AI systems and its
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human experts are going to be the ones that are going to thrive. Stefano, always great to talk
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with you. Thanks very much for your time today. All the best. Thank you, Dan. Have a great day.
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Thank you. Wharton Marketing Professor Stefano Pantoni.