Don’t Forget Marketing Fundamentals as AI Goes Mainstream

Walking the floors of CES2025, it was impossible to ignore the AI avalanche which continues to build velocity and seems unstoppable. Exhibiting companies are inserting AI into every product to vie for innovation awards, retail distribution, news coverage, and new customers; it’s easy to get swept up in the AI hype, promoting AI features instead of their differentiated benefits that actually deliver tangible value to consumers. The exhibiting companies who understand this win at CES and beyond.

On the first night of CES2025, Nvidia announced the extension of its software to robots and personal computers. It’s actively partnering with every major industry in the S&P 500 both directly and via system integrators. AI advancements like these and DeepSeek’s lower cost structure make it more widely accessible, the velocity will accelerate further.

The AI ecosystem revolves around Nvidia. Its market cap skyrocketed past $1 trillion. 78% of its employees are millionaires. All of the major large language models - GPT, Claude, Gemini, Llama, and DeepSeek - and their big tech sponsors - Microsoft, Amazon, Google, and Meta - rely on it. These commercial forces won’t slow down.

Mass AI adoption is clear at CES2025 as nearly every exhibitor showcased AI in its product offerings spanning massage chairs, candy machines, tractors, robotic dogs, and even wearable solar panels. There is nowhere that AI isn’t. This has serious implications.

• Margin Pressure

• Distraction to Great Marketing

• Regulation Impossible

Margin Pressure

Integrating AI into products is expensive - from data collection to activation. But customer expectations are rising faster than willingness to pay, and even faster than the costs of AI. In the short term, companies will feel the squeeze on margins as they try to keep up on all P&L fronts. In the longer term, innovation should provide some relief.

Many product categories are using AI to collect the same information - facial recognition, body temperature measurement, bio rhythm measurement, location tracking, and environment tracking. These product categories include smart home systems, entertainment systems, personal communications systems, car systems, and fitness systems to name a few.

Investors won’t pay for duplicative efforts by so many parties. So we’re headed for a winner take all and/or a common middle layer scenario.

There will be a whole new set of startups to alleviate this margin squeeze. The most contemporary one is DeepSeek who allegedly reduced computation power needed for LLMs. We already see startups focused on more efficient data center energy usage. Will the Big Tech cloud server companies (AWS, Azure, Google Cloud, etc…) continue to reign supreme (likely through M&A) or will they get disrupted?

Distraction from Great Marketing

As companies invest heavily in AI, they’ll need to keep the customer at the center. If they’re not addressing customer needs or talking about those benefits, they’re going to lose.

As I walked the floors of CES2025, it was exhilarating to see the companies who were truly aligned with customer needs -

• lighter & more flexible airplane wings by Airbus to lower fuel costs (see Delta Keynote)

• high capacity backup home power by Bluetti to protect homeowners during major storms

• noise cancellation headphones for construction workers by 3M to protect their hearing

• autonomous electric-powered farming systems by Caterpillar to lower farming costs

Then there were less customer-focused products showing gratuitous AI functionality that seemed more likely designed for PR and competitive land grabs; some of their basic flaws were even comical -

• car interior will change color scheme to match phone photo by BMW…what if you spill coffee on the arm rest controller?

• mattress will detect body temperature to adjust the heating/cooling system by LG…what if your spouse has different preferences?

• asking TV for the weather or basic info while watching movies by Google…isn’t this basic functionality on any device?

Even if product teams are focused on addressing customer needs, marketers are going to need to work hard to keep the positioning and messaging focused on just that - these benefits instead of the wow factor of the AI that helps deliver them. This is a classic marketing question that requires a benefit-led approach with testing as to how much of the AI product features are needed to support the benefit.

As executive teams invest huge sums of money into AI features, they will undoubtedly push to showcase them in their marketing while marketers will have the unglamorous and perilous role of pushing back on them all the way up to the CEO to ensure marketing best practices can lead these companies to the ROI they’ll need for the AI investments to pay off.

Regulation Impossible

There is nowhere to hide anymore. A complete data representation of any individual’s existence is now stored in servers of a large number of consumer technology companies. 1984 Big Brother has arrived. Anyone working in consumer technology, including myself, is facilitating its existence.

Do the data engineers at these companies, or their vendors, have the skill to manage all of the data? Are any of these folks concerned enough about the responsibility of safeguarding this data? Does it even matter if bad actors outsmart them?

Are the government officials responsible for overseeing this ecosystem capable of doing so? Basic personally identifiable information management is an ongoing mess that started in Europe with GDPR. It turned the corporate world upside down for at least a couple of years grappling with what it meant and how it could actually be implemented. Millions of companies are still struggling to do so. It’s been over 7 years to navigate basic data management. Now we’re talking about an entire representation of a human being with datasets distributed in more highly complex systems and structures.

Data privacy will likely get a lot uglier for years before there’s any semblance of governance that is sophisticated enough to navigate all this complexity (see Data Privacy).

For all these reasons and more, CES2025 was eye opening as to not just how AI will be used but also its serious implications. Marketers have a tremendous leadership opportunity to help the world navigate these new mainstream AI waters.