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The Rise of Agentic AI Among Your Customers (Episode 466)

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Agentic AI is almost certainly going to be huge… and probably soon. Early versions of agentic AI already exist today. Some of them even work pretty well. And the early data suggests customers are OK with the idea of agentic AI.

Those facts lead to a few key questions for you:

  • What’s driving — or limiting — adoption of agentic AI?
  • When will we see agentic AI reach large customer groups?
  • Which companies in the agentic AI space are best positioned to win?
  • What will customer adoption of agentic AI mean for your business
  • And, most importantly, what should you do about this shift?

Some of these questions have easy answers. Some… less so.

In this episode of the podcast, I try to break down what’s going on with agentic AI, when your customers might make the switch, and lay out a few ideas that you can put into practice, today, to ensure you can succeed both today, and whenever agentic AI breaks big.

Want to learn more? Here are the show notes for you.

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Transcript: The Rise of Agentic AI Among Your Customers (Thinks Out Loud Episode 466)

Hi, and welcome back to the show. Over the next few weeks, I plan to talk about the future of customer experience in digital.

Search, of course, is the dominant paradigm for customer experience. If search wasn’t the most common experience, Google wouldn’t be the 800 pound gorilla that scares the crap out of every other beast in the jungle. But with the rise of artificial intelligence, and soon, agentic AI, Google is in a precarious position.

My friend Mike Moran wrote me a thoughtful note about the risks that agentic AI in particular presents to Google, and I think he’s mostly right. I also think that it’s a very complicated and more than a little uncertain situation. And it’s tough to explain without first talking about what is and isn’t likely to happen and why I think that.

So today I’m going to talk about the adoption of agentic AI, its likely effects on customer behaviors, and what that might mean for your business. Full disclosure, this one might get a little long, so I hope you’ll hang with us throughout.

I’m Tim Peter. This is episode 466 of The Big Show. Let’s dive in.

What’s the big deal about agentic AI? So the basic idea, if you’re not familiar, is that agentic AI can perform a wide array of tasks. It can adapt to a variety of situations and it can make decisions on your behalf without requiring you to provide much, if anything, in the way of oversight. In short, it’s an AI assistant that takes care of things that maybe you don’t have the inclination, the knowledge, or most commonly the time to do yourself.

The two examples I see of agentic AI that people share all the time are having an agent plan a vacation for you or researching some particularly thorny business challenge. You simply set the agent to the task and within a short period, usually a couple of minutes, it’s taken care of everything for you.

In the vacation example, for instance, it would provide you with your completed reservations and an itinerary. You just go where you needed to go. In the business research situation, it would give you a checklist and a guide for how to address the problem. And in some cases, it may have already completed some of the tasks itself, like emailing vendors or team members, that sort of thing.

These tools already exist today. These are not science fiction. Some of them are pretty good and getting better. I mean, most aren’t, but they’re real and they’re coming in a much bigger way — and probably relatively soon. Which leads to a few big questions.

  • The first is what’s driving or limiting adoption of these tools?
  • The second is when will we see these reach large customer groups? When will customers ultimately start using them, you know, every day?
  • The third is which companies are best positioned to win?
  • And the fourth, and most importantly, is what will their use mean for your business and what do you do about it?

I think anytime you talk about new technology, there are always three main pillars that either drive or limit, depending on your point of view, adoption. There may be others, but this tends to cover the bases. They are:

  • The capabilities or utility of the tool
  • The distribution of the tool, that is, does it have access to markets, and…
  • Its monetization, how the is tool paid for.

I think that the answers to most of the other questions — the timing to reach mass adoption, the company’s best position to win, and to a lesser degree what they mean for your business — all follow from the adoption question.

Put more simply, until these tools are used by a meaningful segment of your customers, a meaningful set of your customers, the rest of the questions really don’t matter.

I also want to be super upfront that I suspect that adoption, mass adoption, could occur literally any day now. Digital has long shown us that customer adoption follows what I always call Hemingway’s “bankruptcy pattern.” You know, “How do you go bankrupt? It happens slowly, then all at once.”

We’re in the slowly moment right now. But all at once could happen at any time. People could wake up tomorrow, realize that these tools provide better capabilities or better utility, and just simply switch instantly.

To talk about these each in a little more detail, capabilities and utility is still not perfect for most of these. Now, one of the biggest things limiting the utility of these tools today is their access to data and their access to websites. We’re seeing things where these tools have to work with the web as it is. And some people may not want that to happen.

For instance, Amazon is restricting Google’s Mariner, which is one of their agentic AI platforms, as well as others by using its robots.txt file — which, if you’re not familiar, is a tool that many websites use to tell search engines what they can and can’t do on a site.

It’s to be determined whether or not agentic AI will always follow those rules, but it certainly could be a problem for them. I strongly suspect Amazon will almost certainly do some level of IP based filtering to write blocking specific IP addresses to prevent these tools from working with their data, right? Because they want to they want their tools to work with their data, not other people’s. It doesn’t look like companies like WalMart or Shopify are doing that yet. We’re going to have to see how that will play out. What’s absolutely true though, is that agentic AI needs to work with the web as it is.

I’ve shared these stats plenty of times here. There are over 200 million actively updated websites out in the world and over a billion total websites. Agents that have to wait for “the entire web” to update to their needs probably never take off or at least they’re going to be pretty late to the party. And I don’t think customers will adopt a tool that doesn’t give them what they’re accustomed to today. If it doesn’t provide utility, nobody’s going to switch.

Now, I think Google has a real advantage in this area because it already crawls the whole web. It knows how the web works and what’s on the web better than just about anyone.

Another factor influencing utility is compute capabilities. How much raw computing horsepower do they have available to them? And the Big Tech companies hold all the cards here. Microsoft, Google, and Amazon, they’re the things that ChatGPT, for instance, sits on top of, right? The Big Tech players are in a pretty good position. We also see that Oracle is getting into this game in a big way.

By contrast, if we think about app developers, they’re at a relative disadvantage compared with hardware or cloud providers if they can’t make the capabilities work on device. Even somebody like Apple’s got a problem there because they don’t provide a lot of these capabilities within the cloud directly. If you could make a device work, then that might play to Apple or Samsung or Meta’s capabilities pretty well. But right now, the cloud is where it’s at, and that really seems to favor a few members of Big Tech in particular.

There’s also a real question about privacy and AI. The CEO of Signal, Meredith Whittaker, gave a talk, appeared on a panel recently and raised some excellent points about how much access these tools would require to your very personal, very private information — something I’m going to talk about more in just a moment — for them to be able to do the kinds of things that most of their developers are promising. I don’t know how much that’s gonna matter to many consumers. We’ve seen people give data freely to all kinds of people lots and lots of times in the past. So that may be an odd issue, but it’s something to pay attention to. I suspect it’s gonna vary by market and region.

I will tell you the early data suggests that may not be that big a deal. Booking.com did some recent research and found that, and this is a quote, “just 12% feel comfortable with AI making decisions independently, while 25% remain unsure and 10% feel very uncomfortable, refusing to trust AI without human approval.“

Now when you add those up, you go, well, wait a second, that’s about 47% of people. That sounds like a pretty big number. I’m not sure though. Those numbers make me more certain that adoption of AI assistance will happen quickly rather than slowly as they gain capabilities, as they gain, as they offer utility. Why do I think that? Well, because you have to remember that roughly 10% of US consumers today don’t own a smartphone, 90% do. There’s always going to be 10% of the population who don’t get on board with a new technology. If today, this early in the game, only 10% feel very uncomfortable, it might mean that resistance, at least for now, is pretty light. Yeah, those numbers could get larger. The smartphone data, though, suggests that I can’t imagine them getting smaller. And that’s a positive sign for AI agents in the near term, as long as they can deliver utility.

Also, they also have to manage the second leg in this particular stool, which is distribution, know, access to markets. And I think the biggest item affecting distribution here is the form that agentic AI takes.

We don’t really know what Agenda AI is going to look like in the longer term. Is it a standalone app or function? Or is it embedded inside each of the apps and devices that we already use every day? I suspect it’s going to be the latter, but I wouldn’t rule out the former. If it’s just built into the mobile OS, then Google and Apple are in a really good position.

If it’s a standalone app like Siri or Alexa or Instagram or Google search on your device, or it’s part of the core device operating system — think Siri or Alexa on Google search on Android — I think the device OS developers are likely to provide hooks for other app developers to leverage. Think about something like Apple’s WebKit for browser functionality within an app or Google’s ads and map APIs that allow you to place ads within an app or show people directions within an app.

Because again, the developers also need access to device capabilities and the cloud, which again brings us back to our Big Tech friends being in a somewhat comfortable position here.

If it becomes an app, who knows? That’s the Wild West. Anyone could be the app that consumers choose. Obviously, ChatGPT wants to be one of them. Perplexity wants to be one of them. But it’s impossible to say. Nobody could have predicted Facebook or Google when they first started and look where they are today. Plenty of other competitors could have wanted the theory and that absolutely could be true this time around too.

There’s also the possibility that we’ll have new devices that people use, you know, instead of using our existing devices, our phones and the apps on them. Maybe we’ll have smart glasses, maybe we’ll have smart watches or other wearables that actually connect to our AI that does these things for us.

Meta, for instance, cares about this one a lot, like so, so much. Mark Zuckerberg just shared a lengthy post outlining his vision for what he’s calling “personal superintelligence.” And one of the most important paragraphs in that post said, “personal super intelligence that knows us deeply, understands our goals and can help us achieve them will be by far the most useful. Personal devices like glasses that understand our context because they can see what we see, hear what we hear, and interact with us throughout the day will become our primary computing devices.” [Emphasis added.]

Notice he talked about glasses that understand our context, not smartphones, not watches, not anything else. In other words, that’s Mark Zuckerberg saying, I really want you to use our devices, not Androids, not iPhones, not watches from Google and Apple.

I’ve talked about this before, but Meta needs adoption of new devices or they’ll always be as vulnerable to gatekeepers like Apple and Google as anyone else. That same problem is one of the reasons that ChatGPT has talked about creating its own phone and its own web browser and why Amazon is buying a company called Bee. Bee, if you’re not familiar, makes an AI powered bracelet that, according to the Wall Street Journal, “records everything you say.” Nothing to worry about there, nothing to be scared about there. Right?

In each of these cases, though, whether it’s Meta, whether it’s ChatGPT/OpenAI, whether it’s Amazon, the companies want and need to be independent of Google and Apple because gatekeepers are going to gate and all that.

What’s funny is they might be right. You know, what we talk all the time about people love their phones and, you know, they haven’t really chosen other devices, but agentic AI could be the killer app that drives adoption of new devices rather than the other way around, rather than “we have these new devices and they drive the adoption of agentic AI.”

I’m going to tell you, I lean towards mobile OS winning. I think that’s, you know, the dominant platform. Probably. But that’s undoubtedly biased on my part because it’s a device I use every day and I still see everyone else using. You know, maybe glasses or watches or bracelets or pins clipped to our clothing will be a better form factor. I’m not saying I’m absolutely about saying that it couldn’t happen. Outside of Star Trek, though, there’s just no evidence supporting that kind of move yet.

Of course, it doesn’t matter how these players bring agents to market if they can’t solve for the third leg of the stool, which is monetization. Now, this is the toughest one to predict from my perspective.

I have to assume that it’s going to work in ways that we’ve seen in the past. You know, venture capital will be happy to fund these at a loss to gain market share — huge market share — under the assumption that money will follow. Take a look at what’s happening with OpenAI and ChatGPT.

It also means that monetization is a far later concern for all of these folks right now, which makes it tougher to predict. Nobody’s trying to figure out how to monetize these perfectly yet.

How much will consumers be willing or able to pay? Tough to tell. They don’t pay for search. They don’t pay for social generally. Will these tools work on affiliate programs and take a cut of every sale? Will they be entirely ad supported? It is so hard to know for sure, which means it’s also tough to know who wins.

I suspect ads will likely play a non-trivial role, which means that the folks with the most ad experience, Google, Meta, Amazon, Microsoft, probably have some kind of head start there. Maybe. Obviously, some smart folks in a garage could come up with entirely new monetization schemes, but it’s just really tough to tell.

So who’s going to win with this kind of world?

Well, if you haven’t figured it out by what I’ve said, I still think Big Tech as a whole has a huge advantage. Google, Microsoft, Amazon, ChatGPT, and maybe Meta have the capabilities. Google, Microsoft, Amazon, and Apple have the distribution. Meta might get there if they can get more folks to buy their hardware. It’s certainly what they’re banking on. And ChatGPT is clearly trying to move in that direction. On the final part, on monetization, Google, Amazon, and Apple have that in place. Google through ads, Amazon through commerce, and Apple through its hardware and mobile OS. Microsoft might have it, and Meta and ChatGPT seem to lag here without hardware or ads respectively.

The only two companies who consistently come up in all three categories, though, are Google and Amazon. Google has an added challenge, of course, in terms of its antitrust situation, which is a big deal and could trip them up massively. They might be able to buy their way out of this, you know, with major fines or, I don’t know, contributions to presidential libraries or some nonsense like that, you know, but we don’t know.

And I certainly wouldn’t count out Microsoft, Apple or ChatGPT. They are each strong in some of the key areas. Weirdly, I do think ChatGPT seems the weakest to me. But given that they’ve got a huge VC backing, they’re absolutely not going down without a fight. Of course, finally, I would never discount the two kids in a garage scenario, you know, some innovative geniuses who figure out how to reduce compute loads or move AI on device or drive a whole new monetization system that could upend everything we know, assuming one of the incumbents doesn’t buy them first.

So given this, given that it’s still early days and it’s tough to really predict, the question becomes, what do you do about it?

I think this part is actually really easy because first, you want to pay close attention to your customers. That’s always true, but it’s especially true in a rapidly changing marketplace. Remember that idea of “slowly, then all at once?” When this breaks for AI agents, assuming it happens, it’s probably going to happen fast. You want to at least be a fast follower. You want to be ready when your customers are.

Second, don’t be afraid to be a fast follower. With this much change going on, you can occasionally get some quick wins through a first mover advantage, but you can also waste a lot of time chasing trends down a dead end. I’m sure there were companies that made a little bit of money with the metaverse or NFTs or, I don’t know, Second Life back in the day.

I’m also pretty sure some of them would have rather spent that time focusing on other bigger, more meaningful trends for their business. I lean toward the saying that you’re better served being a fast follower than getting way, way out in front of your customers on this one.

Our “core and explore” methodology, which I’ve talked about before and I’ll link to in the show notes, or that you can read more about my book, Digital Reset, is a really useful model at times like these. Feel free to check those out. Just remember that the fast is as important as the follower.

And you can’t move fast if you don’t know what you’re doing or where your customers are heading, which leads to my third, final recommendation: Keep learning.

These tools and customer adoption of them are changing so crazy fast right now. You absolutely should be testing these and learning more about them for you and your business. You should be learning how they can help you better connect with customers today. You should continue to focus on what works, the core of “core and “explore.” And you should explore a little bit, spend a little bit of time testing them out to see what might happen.

Finally, you need to get more comfortable with change because we’re going to see change happen whether we like it or not.

Now, will customers adopt agentic AI? Yeah, I think so.

When? Tough to say, but it’ll probably happen all at once when they do. And it will depend upon utility, it will depend upon distribution, and it will depend upon monetization of these tools.

Who wins? Probably one of the Big Tech giants. But don’t be totally surprised if some wild card seizes the day.

Most importantly, what do you do about it? Pay attention to your customers, be a fast follower, and keep learning.

Because ultimately, as customers use these tools, it doesn’t really matter which one they choose in the long run. It matters that you’re focusing on your customers’ needs so that they and their agents ultimately choose you.

Show Wrap-Up and Credits

Now looking at the clock on the wall, we are out of time for this week. I’m willing to bet that you might know someone who would benefit from what we’ve talked about today. Are you thinking of someone? Why not send them a link to the episode? Be sure to let them know what you think too. Keep the conversation going.

You can also find the show notes for this episode, episode 466, and an archive of all of our past episodes by going to timpeter.com/podcast. Again, that’s timpeter.com/podcast. Of course, be sure to like and subscribe wherever you get your favorite podcasts.

And if you’re looking for something new to read, I’d love to suggest my book called Digital Reset, Driving Marketing and Customer Acquisition Beyond Big Tech. You can pick up a copy on Amazon.com Digital Reset, Driving Marketing and Customer Acquisition Beyond Big Tech or bookshop.org. And let me know what you think. I’d really love to hear from you.

Thank you so much for listening. This show would not happen without you. We’ll be back with a new episode next week, and until then, please be well, be safe, and as the saying goes, be excellent to each other. We’ll see you soon.

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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