Posts

AI and Blockchain Dominate DMexco (But Not Reality)

We withdrew from doing business in Europe temporarily until GDPR sorts itself out, so we didn’t feel the need to attend DMexco.  However, the people who did reported back that it was a more heavily European-market focused conference, and like Cannes, a bit smaller. As usual, following it on Twitter gave us an overview, and since we have deep technology chops we were able to understand that most of the presentations were about the future, and not about the present. Neither AI nor blockchain are ready for prime time.

The most common current use of artificial intelligence outside marketing is for predictive analytics in industry. It is used in factories, where connected devices have produced a kind of industrial “internet of things.’ Thus present day AI can tell us when a machine will need maintenance, based on historical data. But most consumers are not machines, and AI is still not in a position to predict big changes in consumer sentiment, such as the fall-off in demand for soda. Large trends in consumer sentiment have caught marketers unaware, if all they’re using is data from AI. So AI is still somewhat backward facing rather than forward facing. That’s why IBM Watson still does not make 100% accurate medical diagnoses.

For example, there were a dozen presentations on AI, including Deutschebank’s, despite the fact that most people in advertising don’t now how best to use it.  The most heavily used AI applications require vast datasets, and when companies say they are using AI to target customers at every stage of the customer journey, what can they possibly mean in the context of GDPR? Moreover, AI cannot yet tell us what customers want, since the action of an individual is fine-grained. At best, it can tell us what classes of consumers want.

Eventually, AI will be used to identify targeted ad buys, but it is not quite there yet. 

The classic example of programmatic advertising is SEM advertising on channels like Google (AdWords), Facebook, and Twitter. Companies like PredictiveBid and Israel-based Albert have decided to put a significant amount of their focus on programmatic advertising specifically.

Programmatic ads bring a tremendous amount of efficiency to bear on the “inventory” of website and app viewers. Platforms like Google and Facebook have set the standard for both efficient and effective advertising – and it can be supposed that these systems will become more and more user-friendly in terms of allowing non-technical marketers to start, run, and measure campaigns on line

Yes, but! What we’ve been hearing more and more lately from marketers is that Facebook ads, despite the granularity of their targeting, do not convert.  We said this years ago:-)

Where AI is actually useful today is in improving search,.especially for smaller ecommerce sites. Obviously Amazon and Google have their own search, and those heavily use AI.

Closely related to search is recommendation, and if you watch Netflix or shop at Amazon you can understand that although recommendation engines have been around for a long time, and are depended on by consumers, they’re far from perfect.

Another area for exploration is text-to-speech or voice. There are a number of possibilities for AI here, from digital assistants to conversational commerce.

But if you went to DMexco wondering what you could put into practice today, there was probably precious little.

 

 

 

Agencies Merging in the Face of GDPR

One of the ways agencies grow is by buying smaller agencies. In theory, that gives them access to more clients, a fresh creative staff, and a way to create scale to ward off competitors. However, mergers and acquisitions are only as good as their integrations into the mother ship.  According to an article in AdExchanger,

There were 398 acquisitions in 2016 with a total investment of $14 billion.  The Big Six – WPP, Dentsu, Havas, Publicis, IPG and Omnicom – were responsible for 89 acquisitions, at a value of more than $3.3 billion.

Figures through September showed 291 acquisitions this year. And in this game of agency supermarket sweep, many of the targets come from the data, digital and programmatic aisle.

This could prove tragic in the long run. The good news is that at long last agencies seem to understand that digital, data and programmatic are capabilities they need to have. But they are one step behind in the race to the future. As a result of coming new data privacy regulations, such as the European GDPR (Global Data Privacy Regulations), many marketers have data at the forefront of their minds, but for the wrong reasons. They know they are going have difficulty using it the way they did in the past, because now the consumer will be in control of her data.

What the big agencies really should be doing is studying up on those regulations and coming to grips with the limits that will be placed on the use of data in the future. Agencies are usually headed by people who may know the creative side of the house but don’t keep very good tabs on data. There will be an amazing culture clash when the data-driven geeks arrive in the house. There will be equally big problems because programmatic itself is coming under scrutiny for brand safety issues and ad fraud. So far, the geeks and the creatives have been kept separate, in separate companies. If they come together under one roof, that holding company will have to tighten its controls to make sure that the data flowing through its acquisitions is in compliance with the new regulations, or the fines will be significant.

So what the agencies will need now is a new cadre of management familiar with aspects of the business that have been lumped into a separate bucket called “martech.” And they will probably have to beef up their compliance departments as well.

In the rush to integrate acquisitions and learn more about how to manage data, guess what will get short shrift again? True creative, the kind that makes advertising users want to see.