AI Agents Will Kill Marketing As We Know It, According to Perplexity's Founder

Summary

Marketing Against The Grain: AI Agents Will Kill Marketing As We Know It, According to Perplexity's Founder

Release Date: January 2, 2025
Host: HubSpot Podcast Network
Guests: Kipp Bodnar (HubSpot’s CMO), Kieran Flanagan (Zapier’s CMO)

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Introduction

In this eye-opening episode of Marketing Against The Grain, Kieran Flanagan and Kipp Bodnar delve into a groundbreaking perspective on the future of marketing in an AI-driven landscape. Centered around a thought-provoking two-minute video by Aravand, the founder of Perplexity, the discussion explores how AI agents are poised to fundamentally transform advertising and the roles of marketers, especially within the B2B software sector.

The Paradigm Shift: AI Agents as Gatekeepers

Kieran Flanagan kicks off the conversation by highlighting Aravand's visionary ideas on advertising in an AI-dominated world. Aravand posits that AI agents will become the primary consumers of advertisements, effectively rendering traditional human-targeted ads obsolete.

“[00:02:35] Aravand: ...the user never sees an ad, right? So unlike Google, the different merchants are not competing.”

Key Insights:

• AI Agents as Advertisers’ New Audience: Instead of targeting human users directly, marketers will need to craft advertisements aimed at AI agents that filter and select products on behalf of users.

• Pre-Programmed Specifications: These AI agents operate based on a predefined set of criteria provided by users, such as budget constraints, preferred features, and specific needs. As a result, advertising will transition from emotional and brand-centric appeals to strictly functional and specification-based messaging.

Implications for Paid Advertising and B2B Software

Kieran elaborates on the profound implications of this shift, particularly for paid advertising and B2B software marketing:

“[00:04:11] Kieran Flanagan: ...you are actually creating them for the agent. Because the agent is the one that is actually looking through all of these adverts to figure out what the best product is.”

Key Points:

• Automation of the Procurement Process: AI agents will autonomously handle the entire procurement process, from researching potential products to making purchasing decisions, leaving marketers to adjust their strategies accordingly.

• Reduction of Brand Influence: Traditional marketing efforts that rely on creating emotional connections and brand loyalty will lose their effectiveness. Instead, success will hinge on meeting the exact functional requirements specified by the AI agents.

• Challenges for Marketers: The shift demands a re-evaluation of how marketing budgets are allocated and how advertising content is created. Marketers must now focus on optimizing their offerings to align precisely with the criteria set by AI agents, rather than appealing to human emotions and preferences.

The Future of Marketing Roles

As AI agents take over more aspects of the marketing funnel, the roles of marketers will evolve significantly:

“[00:05:31] Kieran Flanagan: ...all of the things that we may do may be to service agents. And that is a crazy thing to think about.”

Key Considerations:

• Enhanced Focus on Data-Driven Strategies: With AI agents handling user interactions, marketers will need to leverage data analytics more intensively to understand and predict the criteria used by these agents.

• Automation and AI Collaboration: Marketers will increasingly collaborate with AI tools to automate tasks such as content creation, data analysis, and campaign optimization, ensuring that their strategies remain aligned with the evolving technological landscape.

The End of Traditional Advertising

Kieran underscores the transformative impact AI agents will have on traditional advertising models:

“[00:05:55] Kieran Flanagan: That is the fundamental point. I as a user want to stay away of this. ... The future that Aravand is painting here is really a challenging one for marketers because it reduces everything to a pre programmed list of functional specs.”

Key Takeaways:

• Decline of Human-Centric Ads: As AI agents manage advertisements based on functional specifications, the traditional methods of engaging human audiences through creative and emotional appeals will diminish in relevance.

• Rise of Specification-Driven Marketing: Marketing strategies will pivot towards demonstrating how products meet specific criteria and solve particular problems, rather than building brand narratives or fostering emotional connections.

• Need for Adaptation: Marketers must anticipate and adapt to these changes by developing new approaches that cater to AI agents’ operational frameworks, ensuring their products remain visible and attractive within this new advertising ecosystem.

Conclusion: Navigating the AI-Driven Future

As the episode wraps up, Kieran emphasizes the urgency for marketers to prepare for the impending AI revolution:

“[00:12:26] Kieran Flanagan: ...a lot of the things that we may do may be to service agents. ... 2025 is going to bring us further and further down that path.”

Final Thoughts:

• Proactive Strategy Development: Marketers should begin experimenting with strategies that align with AI agent behaviors, such as optimizing product specifications and leveraging data-driven insights.

• Continuous Learning and Innovation: Staying ahead in this evolving landscape will require ongoing education and a willingness to embrace innovative marketing techniques that cater to AI-driven procurement processes.

• Collaboration with AI Technologies: Embracing AI as a partner rather than a competitor will be crucial for marketers aiming to thrive in this new environment.

Notable Quotes

• Aravand on AI Agents and Advertising:

  “[00:02:35] ...the user never sees an ad, right? So unlike Google, the different merchants are not competing.”

• Kieran Flanagan on the Future of Advertising:

  “[00:05:31] ...all of the things that we may do may be to service agents. And that is a crazy thing to think about.”

• Kieran Flanagan on Marketers’ Challenges:

  “[00:05:55] ...The future that Aravand is painting here is really a challenging one for marketers because it reduces everything to a pre programmed list of functional specs.”

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This episode of Marketing Against The Grain serves as a crucial wake-up call for marketers, urging them to reimagine their strategies in anticipation of an AI-dominated advertising future. By understanding and adapting to the role of AI agents as the new gatekeepers, marketers can navigate the challenges and seize the opportunities presented by this transformative shift.

Transcript

[Kieran Flanagan]

Okay, the founder of Perplexity just dropped the best two minute video describing the future of advertising in an AI world. And it really is a must watch. I'm going to break down the video, tell you what it means for how you do paid advertising in the future. But not just that, break down what it means for people who work in B2B software and how it's going to change all of our roles. You really want to stay tuned for this because the future of how we do our jobs is truly mind blowing. And this is the best 2 minute video to describe what that future might look like. All of that and more on this episode of Marketing against the Grain. I'm Kieran Flanagan. Let's get into today's episode.

[Kip]

Hey, guys, real quick. You know we love building custom GPTs on the show and we love sharing it with all of you. Well, we wanted to kick that up a notch. We just developed this free guide that teaches you how to build your own custom GPT on chatgpt. We've taken the guesswork out of it. We've got templates, we've got a step by step guide to design and implement custom models. So you can focus on the part that's actually fun, the part we love actually building it. And if you want it, you can grab a link in the description below and go check it out now. Now back to today's show.

[Kieran Flanagan]

All right, so one of the big questions has really been what does advertising look like in an AI world? In particular because of the disruption of search. Search has been the biggest and best advertising platform of all time. Google have really built a printing press machine for money because of advertising. But AI really changes that and we've covered that time and time again on this podcast over the past two years. We've told you that search is changing, that paid is changing, but we've never really articulated how paid, paid might be disrupted. We've talked a lot about how organic search will be disrupted because of AI, but we haven't spent as much time talking about how paid advertising is going to be fundamentally disrupted because of AI. So the founder of Perplexity, Aravand, actually had a pretty good two minute video of how he thinks about advertising in the future of AI. And I think it's really going to blow your mind. So let's get into the video. Let's watch the first part of the video. I'll pause it and then react to it.

[Aravand]

Actually, one thing I've been just hypothetically thinking about is like, how would it look like if the Ads are at the level of agents. AI agents like the user never sees an ad, right? So unlike Google, the different merchants are not competing.

[Kieran Flanagan]

So the AI agent is the person or the thing actually consuming all of the advertising. The human never consumes the ad in and of itself. So really keep that in mind because that is a theme that I have talked about over the past two years and I want to get into that a little bit more. But let's jump back into the video.

[Aravand]

Competing for users attention, they're competing for the agents attention. That'd be very interesting. Brands need to first like get comfortable doing this because like, what does it even mean for you to like pay a certain dollar budget for agents that are like you're bidding amongst each other for the agents attention.

[Kieran Flanagan]

So to be really clear, what he is saying is that brands would have to create advertising to figure out how to attract the agent's attention. Now on this podcast I have talked about this explicitly, that in the future I can see an agent going through the full B2B procurement process, going through how to choose software, buy software and actually start to use the software. And I'm going to get into that because I think this theme is bigger than just paid advertising. But what he is explicitly saying here for paid advertising is in the future, when you are creating advertising and you are creating these ads and we are trying to attract engagement via these ads, you are actually creating them for the agent. Because the agent is the one that is actually looking through all of these adverts to figure out what the best product is. Because the agent is the thing that is doing the procurement on behalf of the user. And that is a huge, huge critical point to make. And I'm going to come back to that at the end of this video. But let's jump back in to go through it a little bit more.

[Unknown]

So the moment I say, hey, I'm going to go to Rantham, board for two nights, plan my schedule, do my bookings, and the moment on the back end the agent begins to do that. You will have five travel companies or platforms or airlines competing for the agent's attention. And that whole advertising economy, I mean there was probably then bidding for the lowest price or whatever is the setting that I gave.

[Kieran Flanagan]

So basically this is how paid advertising works today. You have a bunch of providers, they do a bunch of ads and they are trying to attract a user's attention. What we're saying here and talking about is that there will be a more formulaic way that the agent will decide like what is the right ad that attracts their attention because there's a pre programmed set of commands that you have given that agent. You have said to that agent, I want the cheapest. You have said to that agent, I want something in this location. You have said to the agent, it needs to have these certain characteristics for me to even be interested in it. And so the agent will be able to distinguish between these different ads and figure out like what is the right ad ad for the thing that person wants to have. Right. It's like basically has a spec list which is not good for all of us marketers and I can tell you why at the end of this. But it basically has this spec list that's pre programmed from the user and the user saying I want these certain characteristics. And it goes off and it sees these ads and it says, well these three ads have characteristics that I'm looking for so I can go do further research on those.

[Unknown]

All of that happens without me ever having to the user, ever the human user, ever having to see an ad.

[Aravand]

And the interesting thing is the agent can spend a lot more compute power, you know, so therefore it can still be aware that all these brands are advertising for my attention and despite that, like benefit from the advertising revenue. So that would be pretty interesting to consider. And I just want to stay away as a user from all of it.

[Kieran Flanagan]

That is the fundamental point. I as a user want to stay away of this. I used to have to do this stuff and I no longer have to do it anymore because the agent can do it on my behalf. Now what do we do as marketers? We create things to generate engagement, to attract, attract people towards our brands. To like get someone to feel something, to choose me over another brand. The future that Aravand is painting here is really a challenging one for marketeers because it reduces everything to a pre programmed list of functional specs. Basically I have these certain characteristics. It's actually how enterprise software is somewhat bought today. It's pretty hard to like do a ton of brand work for really large enterprise sales because they are agnostic of how they feel about you, like how they feel about you as a brand. They have a certain set, a list of functionality that you have to have for them to ever consider you. Doesn't matter how good your cool campaign is, it doesn't matter how warm and fuzzy they feel about you as a brand. If you don't have this spec list, this kind of list of functionality that you need to have to be considered in that procurement process, you don't get bought. And this is Basically saying that all software is going to be bought that way. That there's a pre programmed list of characteristics that someone wants within the software and the agent will take that list and do all of the research and procurement themselves. So let's kind of pull the thread here a little bit more. So that is the agent doing as. And so we talked about this a lot on this show. Honestly, if you subscribe to this podcast, you were really in the top 5% of people who are thinking about the future of the way things are. Because we talked about this probably 18 months ago. I've talked about this forever. Which, what's happening. Agents are pushing all of the things that we use today in the background because the agent is going to be the user of those things. And one of the ones we talked a lot about that was paid advertising. We've talked a lot about organic search. Google's Deep Research model that I covered before on the show, it's part of their launches of Gemini 2.0 launches is a really good example of this. Right Previously I would have to go do a bunch of research. This is me researching how do I actually add a chatbot to HubSpot's website and then how do I personalize that very first message that someone gets because that actually will increase your conversion rate of chat to actually creating a meet and book for your sales team. And Deep research basically highlights what's happening, right? So deep research will actually say, well, I'll go and do this for you. It researched 37 websites right? In the past that was something that I would have to do. And by doing that, I would actually potentially go to a competitor's website or I would look at other options for me to be able to do that. So I'm actually doing the research and me as a marketer, I can attract that person and I can convince them to maybe try my product to like, maybe see what I have to offer. No longer can I do that because the agent, Google's Deep Research product is going to do all of that research for me. And they're doing it based upon a pre programmed prompt that I give it with very specific characteristics that I wanted. And then you can see here what it gives me back. It gives me a pretty comprehensive tutorial of how to do this. I never have to visit any of these websites again. It actually says the works cited. So one thing you'll see that a lot of AI apps are doing today is starting to show it doesn't matter if it's a search product, like all these products where you're getting data from a CRM, you're getting data from database, you're getting data from wherever, wherever the AI is pulling the data from. People feel much more comfortable if it cites the resources so it knows it's not hallucinating. But I'm never going to go and look at any of these because I actually have a pretty comprehensive tutorial and it works really well for me. So we've gone from the paid ads to research in a product that I no longer have to go through, do all of the research for all of these websites. But the pinnacle of this is actually do I even really need to use the software? I covered Google Stream Real time before it can see your screen. So when you're using a product it can actually guide you around the product. So now we've gone from, you know, the paid advertising is done by an agent. Like it researches it, it figures out the best paid ad where the agent is doing all of the research. So I never have to visit a website, the agent is a partner with me so it can actually help me use software. So even how I use software is very, very different. But that's not all. If you look at Claude's model context protocol, it actually gives you a pretty good introduction to where we are heading. The multimodal agent, in this case Google Stream Wheel Time will be able to partner with you to guide you through the product. What Claude is showing here and I've started to build some of these agents. If you download a desktop app, you can build some of these agents yourself. What it can do is you can actually give Claude tools. So I can connect it to Brave Search and that means now it can search the Internet, but you can start to give it access to tools. And because you've given it access to tools, you can ask it to do different jobs within those tools. And so what will happen in the future is that multimodal agent will help to guide me through how to use the software, but it's learning how I use the software. So it's going to ingest that data from the browser and then it will be able to say, well I can just do this for you. Just connect me to this app, connect me to HubSpot, connect me to these other apps, Oauth me in and I'll do the work for you. So where are we now? Now where the agent is consuming the paid advertising ads to do the research because I'd give it a pre programmed set of script characteristics, it's doing the research organically, it's signing up to use the software and now it's using the software to actually do the things that I want it to do. So I have not touched any of the websites. I'm not even touching the software product. I'm a layer above where I used to be. The agent has taken my place. That is a critical thing for us to keep in mind for all of us marketers and all of us go to market people, is that in the future a lot of the things that we may do may be to service agents. And that is a crazy thing to think about. And that future is a very foggy future. I don't have like the clear guidance and how you do paid advertising for an agent, how you construct your website in a way where and it makes it easier for an agent to do the research where you create a product where the agent is the primary user. But that is the future that we are heading towards and 2025 is going to bring us further and further down that path. So that's everything you need to know about the future of advertising because of AI agents and the future of go to market in general because of agents. This is your episode Market against the Grain. Hope you enjoyed it. I'll see you next time.

[Kip]

I want to tell you about a podcast I love. It's called Created. It's hosted by John Ushai. It's brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Creative gives an inside look at how to build businesses as a creator, improve your creative process and stay ahead of the latest content trends. John, an ex YouTuber and Instagram employee, breaks down the creator economy with guests Logan Paul, Paris Hilton, Jason Derulo, Jake Paul, George Lopez, and more. In a not so recent episode I loved was with Liza Koshay. Remember her? She was one of the fastest growing YouTubers and Viners, growing a fan base well beyond 25 million subscribers. But then she stopped uploading. So what happened? That's a smart woman who made a drastic career decision. You'd want to tune into that one. If you're looking for insights on entrepreneurship and creating a powerhouse business, then this is the episode you won't want to miss. Listen to Created wherever you get your podcasts. Hey, it's Kip. If you listen to this podcast, you know how much I love keeping up with the latest and greatest in technology. But very few podcasts actually give you a dose of the future. The A16Z podcast is the exception. It's hosted by our friend and frequent guest Steph Smith. The chart topping show brings on movers with a track record of being both early and right, like Apple co founder Steve Wozniak, or the CISOs of OpenAI, Anthropic and DeepMind, even the very first CTO of the CIA. From the science and the supply of GLP1s to drone delivery to the economics of deepfakes, go ahead and eavesdrop on the future. Check out the a16z podcast wherever you get your podcasts.