Apple Intelligence could usher in a new era for AI
In this article, Adam Simon (managing director at IPG Media Lab) outlines the way digital advertisers must adapt by integrating with AI ecosystems, enhancing personalization, optimizing for voice search, and building brand loyalty to avoid disintermediation from traditional touchpoints as AI assistants like Apple Intelligence gain prominence.
In early August, Apple released iOS 18.1 developer beta with the first Apple Intelligence features that are expected to roll out later this year with the upcoming iPhone models. Given Apple’s industry-leading position and the immense global popularity of its products, the imminent arrival of Apple Intelligence will mark the beginning of a new era for the AI-powered chatbots, causing a strong ripple effect in the AI discourse that we are having in the media industry.
As Apple detailed during its WWDC developer event in June, Apple Intelligence will be primarily powered by Apple’s proprietary large language model (LLM) and designed primarily for handling practical tasks such as smart reply and email summaries, natural language search in Photos, and taking actions within apps. Siri will also get a much-needed upgrade, gaining advanced functions such as maintaining contexts across multiple requests, although Apple reportedly may withhold some of the AI features, such as Siri’s ability to understand the context and take action within third party apps, for early 2025.
Apple Intelligence stands out from the other AI products on the market for two reasons: its dedication to data privacy, and its pragmatic focus on utility-driven, narrow use cases. On the former, Apple’s LLM will run either on device or on Apple’s own private servers for enhanced privacy; on the latter, it is designed to focus on leveraging the personal data stored on iPhones to solve practical use cases, while outsourcing broader queries to third-party models like ChatGPT.
Speaking of ChatGPT, the famous AI chatbot created by OpenAI is leading the market with over 200 million monthly active users after being the first one out of the gate and benefitting from an early distribution deal with Microsoft. OpenAI recently began rolling out an advanced voice mode that showcases ChatGPT's incredible capacity for natural conversations and simulating emotions, setting a high bar for conversational AI. More impressively, it now supports multimodal input, meaning that it can draw from visual and audio cues to help formulate its responses, making the conversation flow even more naturally.
Yet, compared to Apple Intelligence, ChatGPT’s general-purpose positioning may not overcome its disadvantage of not having system-level access to personal data that would make a chatbot more useful for users. For all its knowledge of the world, ChatGPT wouldn’t know to remind you, for example, of an upcoming dentist appointment or the concert tickets you booked months ago. In contrast, Apple's integration across its ecosystem makes for a more cohesive and context-aware personal assistant. That’s the one competitive advantage that no one else, except for Google, has in the AI assistant market.
Despite some early controversies around its product rollout, Google is making its Gemini AI more accessible to users worldwide. The Alphabet company recently announced that Gemini AI will be integrated into Android devices, starting with the latest Pixel phones, and Gemini Live, the voice chatbot mode of Gemini, will soon replace Google Assistant for handling voice-activated tasks. These moves highlight Google’s competitive advantage as one half of the mobile OS duopoly (along with Apple) capable of answering personal requests that rely on information from emails and calendars, as well as general knowledge inquiries.
Besides building the next-gen personal assistant, Google also has a vested interest in AI search. Google has dominated the search market for over two decades, and search ads make up most of the company’s revenue; despite recent antitrust litigation against Google, both facts are unlikely to change in the foreseeable future. That said, recently Google has faced mounting competitive pressure from OpenAI and Microsoft in the AI search field. In May, Google launched AI Overviews in the US to provide AI summaries of its search results, a feature that has since been rolled out worldwide. Microsoft’s Bing and OpenAI, along with startups like Perplexity, have followed suit with their own AI search products, aiming to turn traditional search into “answer machines.”
More recently, AI search engines are competing not only on technology but also on securing publisher partnerships, as shown by Reddit’s recent restriction on search engines except Google, with which Reddit has a content licensing deal. To adapt, AI companies must build trust with publishers by ensuring transparent content use, respecting copyright, and sharing ad revenues. For digital advertisers, the integration of sponsored spots in AI search results is still being tested. Perplexity is taking the lead in both these cases, having recently announced a revenue sharing program for publishers, and with sponsored results expected before the end of the year. As the market develops, advertisers should collaborate with AI companies to ensure non-disruptive ad placement and monitor key performance indicators to assess ad effectiveness in AI search.
Another popular way that people are interacting with AI is through enterprise chatbots at work. For example, JPMorgan Chase recently launched LLM Suite, an AI assistant designed to employ multiple LLMs for 60,000 employees, to assist them in tasks such as summarizing large documents. IPG Mediabrands also has developed our own AI platform, powered by the latest Google and other leading generative models. This platform is available to all employees and enables every individual and craft to build custom AI solutions without needing extensive coding experience.
Besides these popular use cases, emotional support and companionship is also emerging as a potentially viable use case for chatbots. Some AI companies are deliberately positioning themselves as AI companions. Chatbots are emerging as a supplement to human connections, especially at an acquaintance-level of familiarity and emotional intimacy. These AI companions, like Replika or dot by New Computer, offer a semblance of empathy and support that some users find more reliable than human partners.
Interestingly, Meta’s approach to AI assistants can be seen as an attempt at covering multiple fronts. On the companionship side, the company recently shifted its focus from celebrity AI chatbots to AI chatbots designed for creators, allowing them to leverage the tools for fan engagement. On the utility-driven side, Meta also incorporated its own Llama 3 models into its hardware products like its Ray-Ban smart glasses and Quest VR headsets, enabling voice command capabilities to enhance the user experience by providing hands-free control and interaction within mixed reality environments.
This gap between the general-knowledge chatbots, such as ChatGPT and Anthropic’s Claude, and those positioned as personal assistants or companions, point to a developing tension in the AI market — what’s the best product-market fit for AI chatbots? Right now, no one seems to know for certainty, and we’re still in the trial-and-errors stage.
All things considered, Apple Intelligence is set to usher in a new era for conversational interfaces and voice assistants that look different from most of their competitors. Digital advertisers need to future-proof their media strategies to account for AI's transformative influence. If a sizeable portion of iPhone users start to rely on a revamped Siri to book a service, purchase a product, or find information, they might bypass the traditional touchpoints of apps and websites, where brands can engage them directly, thus disintermediating consumers from brands' digital touchpoints.
To prevent that, digital marketers need to start integrating media assets with AI ecosystems, enhancing personalization, optimizing for voice search, and above all, building authentic brand loyalty by fostering strong emotional connections and value-driven engagements with customers. Only by staying ahead of the curve can digital advertisers maintain their relevance and effectiveness in the evolving AI landscape.