“I refuse to be dazzled by the seeming triumph of machinery.”
Starting in 1811, disgruntled English textile workers staged a series of protests, during which they destroyed the spinning frames and power looms, which had automated the manual labour they relied on for a livelihood. These protestors would come be known as Luddites, a word that has more recently been used in a derogatory fashion to describe individuals who oppose new technology.
Much like in the early 19th Century, today’s marketing industry is going through an existential crisis of its own as new technology automates the way we buy and sell advertising, communicate with customers and track consumer data.
In the thoroughly bourgeois setting of advertising, it’s unlikely that sales managers, creatives and media strategists are going to storm offices and destroy computers and servers—this would, after all, be an exercise in futility, given the increased prominence of cloud-based networks—but automation technology is a topic being avidly discussed across the industry.
At the Australian Digital Marketing Forum, Google Australia managing director Maile Carnegie said businesses that fail to reinvest in marketing—and, not surprisingly, particularly in digital technology—are “cost-saving their way to decline”.
While bordering on chastisement, such sentiments aren’t unique to Google. Ask the executives working at the local tech players like Marketo, Brand Machine, Adslot, Datamine, Marketing Impact, Mi9, Ubiquity and many others, and you’re likely to hear different variations of the same argument, with the general consensus being that a failure to automate time-consuming processes could result in businesses falling behind tech-savvy competitors.
“Danger of a company not doing it?” ponders Marketo’s New Zealand country manager Rob Cooke. “Well, what’s the cost of a defected customer who went to the competition because they bought something from you in the past, but then never heard from you again? Or if they did with a ‘monthly email campaign’, the communication wasn’t relevant and personalised, so they didn’t feel valued?”
This is at the core of what ad tech players sell to marketers and agencies. Automation, the sales pitch goes, provides a means by which to expedite the process of mining insights from data and then using these to deliver targeted messages to consumers instantly.
There’s automation for that
Email messaging, ad trading, data management, customer segmentation and even social media posting can be automated to some degree—and for every niche, there’s an ad tech partner offering a drag-and-drop interface capable of affecting real-time changes remotely.
So, given that it’s common to find these activities within the modern marketing remit, should marketers look to systematically introduce automation across the board?
James Butcher, the national sales director for Microsoft’s MI9 offering, says no.
“We should be careful that not all processes are placed under the assumption that automation equals improvement,” Butcher says. “There are still elements of a marketing plan that automation doesn’t, and possibly will never suit. As an example, true native executions, not in-stream catalogue banners, is something that requires the creativity that only people can provide.”
And while it might be true that not everything can be automated (yet), businesses across the industry are signing on in big numbers with ad tech partners.
“We count some of the largest Kiwi media agencies and publishers among our client base,” says Adslot group commercial director Tom Peacock. “In no particular order these are Neo, OMD, Spark PHD, and FCB on the agency side and Fairfax, Trade Me, NZME and Ad Hub on the publisher side.”
Adslot’s haul of big names isn’t unusual in the industry, says IAB chief executive Adrian Pickstock.
“We don’t have information on how many New Zealand companies are shopping around for marketing automation partners but there is certainly growing demand for it from marketers,” Pickstock says. “This is reflected in the steady rise of programmatic spend. In 2014, eight percent of display advertising was attributed to programmatic in New Zealand, and this rose to 13 percent for the first quarter of 2015.”
And looking at the trends in the more mature US market, Pickstock believes that this is only set to increase as the local industry continues to adopt digital marketing.
“Programmatic advertising revenue totalled $10.1 billion [in the US]in 2014, accounting for almost $50 billion total internet advertising during that time,” Pickstock says. “The study revealed that ad-tech companies’ revenue comprised about 55 percent of the programmatic total last year, while publishers collected 45 percent.”
Returning to the regions
In days gone by, local marketing was all there was – the classic window poster and ads in the local paper. Then came the mass media revolution and generic, centrally-run national campaigns, which did the business for years with not much else needed to support them. Today, as the fight for consumer attention becomes increasingly tough and marketers look for ways to increase relevance, localised marketing is back in the spotlight.
In a major US survey of chief marketing officers, 59 percent saw localised marketing as essential to driving business growth and profitability. And while ‘bandwidth strain’ at head office previously limited localisation efforts, Brand Machine managing director Andrew Mitchell believes that automation technology is giving clients the opportunity to return to the concept of local marketing.
“Recently a client ran a campaign [on the Marketing Hub platform]where 200 towns and suburbs each had a different locally relevant headline,” Mitchell says. “The whole thing was driven out of a database, with no creative management required at all by the client.”
Recent Gleanster Research shows top performers who localise marketing report an 18 percent higher response rate over generic communications.
Mitchell says the key to improving local marketing performance is switching modes from central management to a distributed ‘DIY’ approach; local teams activating communications themselves using a modern automation platform. “It’s physically impossible for the local opportunity to be realised if everything is managed by head office,” says Mitchell.
He says brands are quickly realising local teams need the freedom to localise and activate quickly to help hit their numbers, and with a local automation platform marketing teams can rest easy that full brand and legal compliance is assured. “Now you can let the dog off the leash and let it run,” he says
A major drawcard of marketing automation technology lies in the promise of greater measurability of campaigns.
For generations, marketers have had to endure snide remarks referring to their trade as the colouring-in department. And the difficulty in quantifying its numerical value meant that marketers were in some ways restricted at the executive table.
However, the advent of big data and online tracking has allowed marketers to now follow consumers from their first encounter with an ad through to the point of making a purchase.
“Consumers are no longer just numbers,” says Cooke. “No longer just a volumetric of an unknown mass of people doing stuff. By reacting with personalised communications to the actual activities and behaviours of customers as individuals, you are creating value out of the numbers.”
The common argument spawning from this is that marketers now have numbers to justify their actions and that this gives them greater bargaining power in terms of where a company should allocate its funds.
“If you’re able to quantify what is working and what’s not, it makes it a lot easier to make a good decision when things start to turn against you,” says Datamine managing director Mike Parsons.
However, as a corollary, the Marketing Association chief executive Lance Walker points out that marketers have now, perhaps, become too obsessed with data.
“Too often ‘the numbers don’t stack up’ argument becomes an excuse for not doing something, as opposed to giving it a crack,” wrote Walker in a recent article based on his speech presented to Marketing Association members. “It concerns me when I see young enthusiastic marketers poring over spreadsheets and debating whether the response rate for a new, untested campaign is going to be 1.1 percent or 1.2 percent. Who cares? By the time we’ve debated that we could have got out there and tested it and found out.”
This focus on numbers also lends itself to short-termism, in that marketers could be encouraged to modify a campaign if early results don’t look promising enough.
Butcher concedes that these issues have emerged in the industry but believes it has more to do with the numbers marketers are choosing to focus on.
“We have become too obsessed with the wrong numbers,” he says. “True measurability and understanding the impact your creative has had on your target audience remains incredibly beneficial in any campaign and is one of the core benefits that ‘interactive’ as a channel provides. But I still see too much emphasis put on the click-through rate of a campaign, not enough care taken on viewability and brand safety.”
Stepping stones to sentience
The holy grail of artificial intelligence lies in creating a sentient machine. And while this space is still very experimental, there is evidence that we aren’t too far away from machines being able to paint, write and draw with proficiency indistinguishable from the human hand.
Machines write poems
In March this year, The New York Times ran an online quiz that asked readers to deduce whether an algorithm or a human had written an excerpt of text. Standard fact-based journalism, opinion pieces and even poetry were thrown into the mix, and in each case it was incredibly challenging to determine the answer.
Aaron the painter
Algorithmic art has existed for quite some time, and in some cases simply requires the human to punch in a few instructions. But Aaron, an art-creating programme developed at Stanford University’s Artificial Intelligence Lab, is completely different story in that it is being taught by its maker Harold Cohen to paint with more and more complex techniques each year. According to Gizmag, Cohen didn’t show Aaron any pictures but instead taught the robot with lists of object and body elements and the relationships between them. What is most striking about Aaron is that it isn’t instructed to paint anything; it simply paints whatever emerges from within the confines of its artificial imagination.
Google’s computers are underpinned by an artificial neural network, which takes inspiration from the brains of small animals. Recently, software engineers have been glimpsing into the passive musings (essentially dreams) of the network through a series of experiments designed to determine if the artificial intelligence is in fact learning. Usually the engineers would present an image, and the network would interpret what it is—this is the science behind image recognition. However, for the experiments, Google determined that it could reverse the process by presenting the network with an object and then asking it to generate an image of it. The result is a remarkable assortment of abstract interpretations of things that could easily be considered art.
Rinse and repeat
If marketers do look at the right numbers and see a desirable result, then this could encourage them to repeat a specific creative approach—leading to concern that automation could water down the level of creativity in the industry.
Parsons argues that this isn’t the case, and that the onus is on marketers to experiment when using the technology.
“Just pushing the same button over and over doesn’t really prepare you to do a great ongoing job; that’s lazy and complacent,” he says. “Constantly having a champion or challenger mentality and encouraging innovation adds to analysis, rather than detracting from it.”
However, marketing is, after all, designed to drive financial results, and creativity sometimes seems surplus to these requirements. Nowhere is this more evident than in the price-led retail advertising that shouts at the nation. In a recent interview with NZ Marketing, Countdown general manager of marketing Bridget Lamont provided a pretty matter-of-fact justification as to why retailers continue to engage in this form of advertising when they have so much creative firepower at their disposal: “Why do we do it? Because it works. Why do we put unaddressed mailers into 1.4 million letterboxes (which is just a paper version of shouting)? Because it works. I’m a pretty simple person. In terms of our media strategy, I’m going to advertise where the eyeballs are. In terms of our style of communication, I’m going to do the stuff that works.”
More recently, Countdown has also extended this approach to the digital channel through its highly successful email programme.
“We have a large database of around half a million customers we can communicate with via email, and 350,000 of these customers receive a myCountdown email each week,” Lamont says.
The emphasis of this programme isn’t so much on the creative presentation of the information, but rather on the level of personalisation in each communication.
“The sales uplift we see from highly personalised communications speaks to their effectiveness, and the more personalised we get the better our open rates. For example, our customers love knowing how much they have saved since we introduced Lockdown and we see open rates of over 40 percent when we give them an update on their savings total.”
This is not to say that every automated communication is going to be utilitarian in its execution. In much the same way television allows a single brand to deliver shouty and creative messaging, so too does ad tech facilitate the means by which to execute both. And Union Digital general manager Todd Wackrow believes that as the industry evolves marketers and creative agencies will become better at exploiting the opportunities offered by ad tech.
“Ad tech should [already]be opening up creativity, but currently there is a bit of a knowledge gap between the technical side and the creative and strategic departments within agencies,” Wackrow says. “To date, I think this lack of knowledge is holding back creative executions using ad tech, but as agencies and marketers become more aware of what is possible I see this changing rapidly.”
And Wackrow goes on to say that the real advantage of ad tech doesn’t lie with marketers but rather with the customers receiving automated messages.
“Ad tech will go to the next level when the industry stops thinking about what it can do for them, and starts to truly think about what it could do for the consumer,” he says. “There is a lot of negative talk about the data the likes of Google and Facebook are collecting, but ultimately I just see this as evolving to individuals having a personalised web. Imagine a world where every ad you see online is tailored to your personal tastes? Wouldn’t this be better than being hit with irrelevant ads?”
These personalised ads still need to be created. And while Google Creative Lab’s Tom Uglow has previously described creation as “a very complicated pattern-recognition algorithm”, it will still take some time to crack, meaning that creatives will still be required to develop the content that’s distributed through automated channels, despite the fact that Google can dream and machines are already writing poems (see sidebar).
In a recent blog post, DDB chief creative officer Damon Stapleton points out that technology in itself is not a solution.
“There is a tendency to hold onto the latest technology or system like it is some sort of panacea for all our ills,” he says. “This is something that happens in an uncertain world. It is natural to crave certainty. Certainty and creativity however are not a great mix … When the world is shifting and changing I think many believe storing up on knowledge and having a lot of information will be the solution. It will give you an exact answer. The truth is that even great answers ultimately give you more new problems to solve. And tomorrow the answers will have changed again. That is why we need thinking and creativity. These are the abilities that not only keep up with time but let us travel ahead of it. And time is not a single answer. It is an endless story.”
Further to this, Swiss futurist Gerd Leonhard recently visited the Spark offices in Auckland and shared the prediction that mass automation within the next five to ten years would abrogate around 40 to 50 percent of all jobs currently in existence. This, he says, would result in existing jobs being spread across the population more evenly, reducing the eight-hour workday and giving people more time to focus on right-brained creative activities, like painting, drawing, writing poetry and creating ads for programmatic networks (economist John Maynard Keynes believed this would happen too, but he severely underestimated the competitiveness of humanity). And while a touch far fetched, this prediction might provide at least a glimmer of hope to creatives who currently find their workdays stretching a little further as they develop numerous iterations of the same ad, lest something generic is served onto the tablet of a 26.7-year-old, stay-at-home father of triplets with a penchant for reading conspiracy theory websites on the dark web.
- This feature was originally published in the September/October edition of NZ Marketing magazine.