I've recently read a very interesting insight on Scott Belsky's (COO of Adobe) blog implications.com:
AI will threaten subjectivity in purchase decisions, and with it the sway of brand and marketing. As we gain trust in the guidance of agent-assisted experiences, will the impact of brand, referral, and relationships in purchase decisions be diminished? Whether we’re buying batteries, sneakers, potato chips, or kitchen appliances, we are often influenced more than we care to admit by brand perceptions as opposed to factual comparisons. However, as your “AI Agent” gets to know you better - infused by every personal preference and previous purchase as well as every online review and consumer reports determination - you may start trusting the guidance of your agent more than any other signal.
We can see what's happening with the web search - tools like Perplexity or Bing chat not just give you search results, but summarize them, which slowly disrupts Google. Next step is even more powerful: when making decisions which products to buy, we might skip the search AND the decision process altogether. Our personal AI assistant will do the product search, analyze the reviews, compare products and buy on behalf of us, what's best for us. Just like now we don't second-guess Waze routes to go from point A to B, someday we'll let our AI choose and do all the necessary purchases for us.
Which raises a question: what's the role of marketing and brands altogether? Marketing exists to influence our decisions, but if we don't make those decisions anymore...
Right now about 15% of most products' cost is spent on marketing, so if you skip marketing, your product can be 15% cheaper, which means - personal AI shopping assistants, comparing your product to other products, will rather choose your product. This might mean that marketing budgets for
everyday products will shrink massively.
Marketing for
luxury products and services will probably not be impacted much, because even in the post-scarcity economy, some things are still scarce and probably even more demanded, so... luxury is luxury.
Domains are
brands. Which means that probably, if marketing budgets for non-luxury products and services shrink, so do the budgets for domains in general - as branding budget is part of marketing budget. What's the point of paying 1k or 10k or 100k USD for a domain to impress the customer or evoke trust, if the customer actually never even sees the domain? And the personal AI shoppers will find your store and your products anyway, even if you're using a 10 USD domain.
So from this perspective, I believe AI advance (long term) is bearish for domain name market.
But there's another use case evolving for domains -
personal identity. Which is what all the web3 domains are about (but web2 domains will be imported into web3 and be part of it too, they aren't going anywhere). At the moment our online identities are scattered all over - there's email, Twitter handle, IG username, FB username, phone number, your username in NamePros forum etc., however - I strongly believe that in the future, our digital identity will be based on one unique portable "username" - which is a domain (it can be linas.eth or linas.com or whatever other TLD, anything that's integrated into the decentralized system that will be the basis of web3 identity - so far the winning protocol seems to be ENS).
This use case is massive. Your universal username (domain) will be the ultimate status symbol in the future, so I believe in the future that's where the domain name market is going to get the most value from. There's 350 million domains in the world now. When everyone starts using a domain as their universal username, that number is going to grow to 9 billion (or more, because people probably will have not just their official identity, but also anonymous or pseudonymous identities). So that's the bull case for domains.
