Orange County will have a prominent role in the marketing industry’s deepening use of artificial intelligence as more tools emerge to help brands connect with consumers on a personal level.
Kia Motors America Inc. in Irvine and Fashion Island in Newport Beach are using chatbots —software that communicates with users via text or voice—to provide product information and simplify online purchases. Taco Bell Corp. in Irvine also is among early adopters of the new advertising layer. The fast food chain’s TacoBot can be used with popular messaging service Slack to place pickup orders. It plans to launch a similar experience through Facebook’s Messenger app.
Programmatic—or automated—ad buying grew from $5 billion in 2012 to $39 billion this year, $24 billion of which was disbursed in the U.S. market. That’s projected to increase 31% next year, surpassing social media’s anticipated 25% growth and online video’s 20% jump.
“At first, programmatic marketing was often used to reach target audiences as cheaply as possible, with little regard for the quality of the sites in which the ads appeared,” said Zenith’s recently released 2017 Programmatic Marketing Forecasts report. “It is now being used in conjunction with valuable data segments to target individuals in intelligent and creative ways, identifying those most likely to be receptive to a brand’s messages and encouraging them along the path to purchase, often in premium environments.”
Not all tech innovations are reserved for the online space—Amazon.com recently introduced a brick-and-mortar store model without cashiers or salespeople. Shoppers at its Amazon Go store in Seattle can swipe the retailer’s app as they enter, pick up what they need from the shelves, then just walk out.
Retail sales will continue going up, in any case, according to a recent study by the Los Angeles County Economic Development Corp., which predicts that Orange County’s taxable sales will increase 6.2% this year to $66.2 billion and reach $70.3 billion next year. Retail trade will add up to 154,300 jobs here this year, rising to about 155,600 in 2017.
Company to Watch
Karma Automotive LLC
Karma launched the Revero in September, a $130,000 sports car powered by electricity, gas and solar energy. The automaker was known as Fisker Automotive and Technology Group LLC before Wanxiang Group Corp.—one of the largest auto parts makers in China—bought it in a 2014 bankruptcy auction for $149 million in cash.
The vehicles, when ready, will be sold through a network of 10 dealers and Karma’s company stores, one of which is at its new corporate headquarters in Irvine. The first Reveros will be delivered from Karma’s 556,000-square-foot facility in Moreno Valley by year-end, according to Dan Catalfumo of Palm Beach, Fla., who was among the first to order the vehicle, sight unseen.
Company officials, however, appear not to be in a rush. Wanxiang has “patient capital,” according to Chief Revenue Officer Jim Taylor. “He’s in this for the long haul, and the first thing he told us is, ‘Just get it right.’ We kind of hit the lottery with this owner. The only expectation is, “quality, quality, quality … and that’s when we’ll start delivering it to customers. But we are happy to take the order ahead of time.”
Karma’s marketing team, meanwhile, is after the customer who wants exclusivity and excellent design, which it identifies as a demographic of about 250,000 people with household incomes above $300,000—most of whom already own luxury cars.
Revero marketing efforts “have to be extremely surgical,” Taylor said. “It’s not, ‘I have it, and you can’t.’ It’s, ‘I found this, I have this, I chose this, and it’s not the exact same as yours.’ … We only expect to sell a thousand or two.”
Karma also is developing another, yet-to-be-named vehicle.
“It’s one of those things in the car business—you have to be able to walk and chew gum at the same time,” he said. “We got this car that we are launching, but because cars take so long to make, simultaneously, sort of in the back, we are going like crazy making the next one … That’s why we wanted the Kawasaki (building),” he added, referring to the company’s new headquarters in Kawasaki’s old Irvine digs.
Person to Watch
Jim Jannard
The founder of Irvine-based Red Digital Cinema Camera Co. has yet to release details on a secret, “the most mind-numbing project” he’s ever worked on.
“I am at a stage in life where it needs to “be big or go home,” Jannard posted in October on Red Digital’s online users forum, then followed up last month with, “Stay tuned.”
What’s “big” for the inventor with about 90 patents to his name and who sold Foothill Ranch-based Oakley Inc. in 2007 to Luxottica Group SPA in Italy for $2.1 billion?
He dropped a few hints about the project in May, including, “It has to do with space. And travel. And time. And electronics. Get ready to place your deposit. It will be guaranteed by me.” Jannard allowed that it’s “not energy related. We will leave that up to Elon Musk.”
