AI, Martech and Customer Experience – The Way of Marketing

1. How to touch your customers, in a good way

Two words dominated many of the presentations and conversations at Cannes this year: customer experience. It was almost as though many of the attendees have suddenly discovered the concept of the purchase funnel and the need to keep customers engaged and connected every step of the way. Yes, it seems the blindingly obvious isn’t always obvious.

Take Procter & Gamble’s new AI-driven digital brand ambassador, Yumi. It is designed to create a warmer, more personal relationship between consumers and the brand it is flogging, SK-II skin-care products.

Never mind that Yumi is a digital construct: P&G’s chief executive officer for the global SK-II business, Sandeep Seth, argued that Yumi personifies the company’s goal to combine technology and creativity to benefit customers.

“She provides the warmth and connection of human touch in the form of a digital experience to make the overall skin-care experience at home and in store more enjoyable and compelling,” he said.

The Cannes crowd loved Yumi, in part because she provided a welcome break in fairly run-of-the-mill presentation about AI. Perhaps they also understood that Yumi represents an interesting way to (in theory) improve the experience of P&G’s customers.

Pulling power

Perhaps the biggest statement in defining the industry’s newfound love of customer experience came earlier this year when Cannes favourite David Droga sold his agency Droga5 to Accenture Interactive.

In discussing the surprising acquisition with Accenture Interactive CEO, Brian Whipple, Droga told a packed Lumiere Theatre: “We seem to be an industry that puts everything it does into silos. But the consumer sees it as all one thing,” he said.

“I could come up with a great creative story but then if [customers] go into the store and the experience isn’t there, it all goes to shit. The way to save creativity is to make sure it can be effective all the way through [the purchase funnel]. I don’t want to be the best interior designer in the business if the house is going to fall down.

“Our industry is changing and I just needed more levers to pull.”

Bottoms up

For Gucci, improving the customer experience started with a realisation that is obvious to anyone who doesn’t work in the luxury fashion business.

“Luxury fashion had become recognised for being a little stand-offish,” Robert Triefus, executive VP, brand and customer engagement, Gucci, said.

“We wanted to disrupt that. But you need [all staff and management] to believe in those values in order to pull it off, so we started a culture of experimentation, risk taking and empowerment from the bottom up.

“Human touch is at the centre of everything we believe in. When we opened a store in New York, we actively hired staff without retail experience. We wanted musicians, artists and storytellers, so when you come into [the] store it’s a joyful experience across every engagement.”

Easy and caring

With customer experience a hot topic right now, companies such as Ford Motor Company, Amazon, Apple and Delta Airlines have tapped senior executives to improve the experience.

“We can see where the customer pain points are and improve them. We are going to have a laser focus,” said Elena Ford when she was appointed chief customer experience officer at Ford Motor Company in October last year.

“Whether it is getting oil changed or dealing with a call centre, experience is important. Loyalty is very important. We want to be easy, thoughtful and caring about the way we handle situations. Every day, I will wake up and worry about how customers feel about their interactions with Ford, whether they’re browsing our website or dealing with Ford Credit renewal.”

Mitsubishi Motors North America chief marketing officer, Kimberly Gardner, backed up her colleague. “A lot of our challenges are how do we prioritise the right parts of the funnel to ensure there’s a smooth experience,” she told the Cannes audience. Car buying is a rollercoaster and there are so many touchpoints, but customers see it as one thing. We silo ourselves into these little pockets but that’s not how the consumers see it.”

It’s easy to be cynical about such statements, given companies should always be focused on – and understand – the experience of their customers and should not get to the point where they need to hire someone with the grand title of chief customer experience officer.

Like much of what was said at Cannes this year, the discussions about how to improve the customer experience broke little new ground. But they were a useful short-hand guide to how some companies are focusing on the people who count the most: their customers.

2. Martech is everywhere, now talk about it

One question on the lips of many CMOs in Cannes was what exactly to do with their martech spend.

In one instance, an Australian CMO told Mi3 that they are convinced “most brands only use about 20 per cent of the tech stack they pay for, and when you ask how much of that 20 per cent is actually driving real effectiveness, you have to question whether our money is being best spent in that area. That discussion is something I found was really missing from the Palais this year.”

Indeed, when you consider martech is now a $US100 billion industry that continues to blow out in cost due to implementation programs necessitating ongoing staff resources – and according to Gartner, accounts for 29 per cent of marketing budgets – you have to wonder why the subject wasn’t broached in greater detail.

Of course we were never going to hear any scepticism or evidence of a lack of effectiveness from Adobe or its contemporaries, and perhaps the fact we didn’t see a great deal of evidence for the effectiveness of martech over the likes of greater investment in customer experience should be cause for alarm.

Numbers racket

What we did hear from the likes of Forrester Research, Procter & Gamble’s chief brand officer Marc Pritchard and British marketing academic Peter Field was the classic refrain: sure, a product can give us the clearest numbers, but that doesn’t make those numbers the most worthy of our investment.

As mentioned in our first instalment, Forrester indicated the possibility of the advertising industry generating an extra $US10 billion in net revenue by shifting “billions of dollars out of tech to fund agency creative”.

The research company indicated that despite its findings, adtech and martech are expected to grow by 9 per cent by 2022 compared with growth of just 2.4 per cent for ad agencies. Forrester also claimed that for every one-point drop in the customer experience index alone, clients lose 2 per cent on returns.

If it’s a greater discussion of effectiveness you’re after, look no further than Peter Field’s presentation, which identified that a lack of credible brand health metrics and measurement tools are among the key drivers behind the marketing sector’s increasing shift to a short-term focus.

What’s the problem? Bad marketing practice is rooted in short-termism.
Field said “high performers” – companies that invest in long-term brand-building activities – achieve five times as much market share as “low performers” (companies that devote much of their marketing to short-term activations) and have 16 times greater creative effectiveness.

“High performers are half as likely as low performers to use short-term advertising,” he said. “High performers are also less likely to employ targeted approaches. High performers use more traditional media and low performers tend to go for the online video and non video.”

Marc Pritchard said in a morning chat with The Economist that “there’s a much broader ecosystem out there and a lot of other things we can be doing to stop rotating on the same platforms.” So, why aren’t we?

3. AI – shallow and not that bright 

There was a lot of talk about AI in the Palais and along the beach this year. But unlike previous years when AI was being hailed as a key part of the brave new world of marketing, this year the talk was more sceptical and questioning.

During a session on the art of asking questions, Harvard University professor Steven Pinker was asked if AI could ever surpass humans in creativity.

“There’s no reason it couldn’t as it will keep getting better,” he said. “Of course, as AI can do it, we won’t call it AI anymore; it will be the norm.

“But a lot of what is called AI now isn’t deep learning. It is quite shallow learning because it is just focused on soaking up correlations in big data. It doesn’t take that data and turn it into real learnings.”

Greg Cross, co-founder and chief business officer of the AI company Soul Machines, agreed – to a point.

“AI is not that smart right now, but it is an exponential tech that cannot be ignored,” he said. “It will be an integral part of your competitive advantage for adopting now. It may be something you may never get back.”

Rogue AI

The fact AI isn’t particularly smart or deep right now is not its only problem.

Rob LoCascio, founder of the multi-billion dollar AI marketing company LivePerson, believes Silicon Valley has largely been oblivious or ambivalent to the dangers of social media, and AI risks the same problems if governments don’t intervene quickly. He says the trouble spots include how bias is being written into algorithms.

LivePerson’s AI platform handled 400 million customer conversations last year for companies, half of which had AI involvement. But without government involvement to enforce standards, LoCascio fears unregulated AI will face a backlash.

“Right now customer care, marketing and sales, they’re all using this stuff, testing and learning and playing,” he told The Australian Financial Review last month.

“Ultimately, the brand or the business is responsible for the customer experience and if you’re detrimental to customer experience or the customer has a bad interaction with you, they’re going to be brutal on you and your brands. They’ll believe you’re not being ethical, it will all get shut down and will go to the lawyers and regulators in business.

“We’re at a reckoning. The first will be CEOs saying ‘shut this thing down and let’s stop using it’. This is what I’m trying to prevent because it will stop our industry from getting to the fourth industrial revolution.”

Bank look

Not surprisingly, the presentation at Cannes by Greg Cross and his partner, Mark Sagar, was generally bullish about the potential of – and outlook for – AI.

Soul Machines is creating a human-based operating system for AI. Part of its work has led to Fatima, a face they have created to represent a bank.

“Fatima is aiming to bridge the human machine divide and create more fluid communications,” Sagar said.

“We’re moving into an era of naturally-generated content where the content will be different every time you interact and it will be different in a personalised way. The aim is to help guide customers to particular goals with greater comfort and ease. It democratises CX by creating personal CX for every single customer. No longer is intensive, personal customer service only for those willing to purchase luxury goods.”

Cross added: “We live in an experience economy. What if we could make one-to-one communication scaleable?”

Soul Machines is trying to answer that question with Yumi, an artificial brand ambassador it created for Procter & Gamble’s SK-II skin-care products.

Knowing Yumi

Yumi is part of P&G’s marketing focus is to “drive creativity through humanity”. According to the Soul Machines executives, that means searching for ways to create warmth and two-way connections with consumers.

Using Google Dialogflow as a language platform, Yumi can interact as a human would to provide beauty advice and help steer consumers toward SK-II products.

“Yumi is more than a digital influencer,” said Sandeep Seth, P&G’s chief executive officer for the global SK-II business, said at Cannes. “She is a digital human capable of interacting and engaging in ways technology hasn’t been able to do until now.

“Yumi personifies our goal to combine technology and creativity to benefit customers. She provides the warmth and connection of human touch in the form of a digital experience to make the overall skin-care experience at home and in store more enjoyable and compelling.

“We’re looking forward to customers being able to turn to her for skin-care and beauty questions at any time of the day or night,” Seth said.

4. Speak their language: your brand is in the consumer’s hands

It was a phrase heard over and over again at Cannes: brands have been democratised. It’s not a new idea and none of the speakers delivered any particularly revolutionary insights on what it means for marketers. But some of the discussions about the democratisation of brands provided handy tips.

“Brands have become democratised; they are whatever the people happen to be saying,” Debbie Millman, founder and host of the Design Matters podcast and one of the leading designers in the US, said.

“Brands still signal our beliefs and affiliations. [But] in the last two years or so, the top-down arrangement of the corporation dictating brand meaning has flipped, and that is something to be excited about.

“People have taken over the process of creating marques and movements, using exactly the same tenets as corporations. We’ve seen that with movements such as Black Lives Matter, Me Too and Time’s Up.”

Pain gain

The core message from several speakers was that in a world where consumers are defining and leading brands, marketers and their business partners need to focus on creating the most meaningful brand interactions through reverse engineering campaigns from customer pain points or points of interest.

Anheuser-Busch’s chief marketing officer, Marcel Marcondes, argued that the “game” of marketing has changed.

“This is not a game of noise anymore,” he said. “This is a game of relevance and the only way to achieve that is to pay attention to them, not us.”

Marcondes likened the outdated approach of marketing as going on “consumer safari”, that is, looking at people with binoculars from a car, not having a conversation with them.

“It’s obvious, but you have to give people what they want,” he said. “Innovations are leading future growth, so you have to find opportunities to reverse engineer innovation from servicing consumer needs. We have to adapt what we do to better serve the people, not convince them they need us.”

Marcondes offered three other suggestions for paying attention to consumers and servicing their needs.

“Speak their language; it seems obvious and it is,” he said. “Overcome stereotypes. And, finally, show you care.”

Sell the sizzle

Always one to assert their creative dominance at Cannes, the Fernando Machado-led team at Burger King offered their own three pillars to ensure their campaigns hit the mark every time, even in the face of competitors with much larger budgets.

Attributing their success to design, technology and product innovation delivered with every campaign, Burger King delivered two particular standout examples of the reverse engineering approach to marketing Marcondes described.

The “Traffic Jam Whopper” campaign in Mexico City saw Burger King revolutionise what the team perceived as a stagnating consumer experience in food delivery. In doing so they achieved a 63% increase in sales and saw their app downloads increase 44 times. How? They solved a problem. By targeting the areas experiencing the highest traffic density in Mexico City and using a combination of dynamic outdoor and in-app purchasing in collaboration with Waze, Burger King could deliver Whoppers right to the car of those people stuck in traffic – the only food company to ever do so. Machado announced plans to roll out the technology in Los Angeles, Sao Paolo and Shanghai next.

A more classic Burger King approach came in the form of the “I’m Burning It” campaign. By utilising tech and some great design, the team managed to “hack” $US75 million in McDonald’s media spend, all the while engaging its own consumers in a fun experience that saved them some cash on their next Whopper.

Identifying that McDonald’s was spending four times more in media than Burger King in Brazil, the Burger King team redirected its outdoor ad budget into developing an app that could recognise any McDonald’s static advertising from billboards to in-restaurant menus and, using augmented reality, burn the creative flame-grill style and replace it with Burger King creative – while also giving the burner a coupon for a free Whopper.

With 400,000 ads burned and one billion impressions made, you have to admire the candour of Machado and his team – and acknowledge the significance of finding unique ways to engage consumers on their level. You just might boost your marketing presence by $US75 million.