Marketing faces death by algorithm unless it finds a new code

Artificial intelligence (AI) is one of the most-hyped topics in advertising right now. Brands are increasingly finding that they need to market to intelligent machines in order to reach humans, and this is set to transform the marketing function.

A growing amount of content consumption today is shaped by machine intelligence – social networks and other digital properties recommending content based on various personalisation algorithms.

In the world of digital marketing, this means AI is becoming the gateway to consumers. It’s set to become more prevalent as objects, such as smart fridges, gradually become connected to the internet and purchasing decisions are increasingly driven by digital discovery.

Brands are shifting from the mindset that marketing to consumers is done through a one-way channel. For campaigns to drive the most value, they must be both human-focused and optimised for machine algorithms.

Cracking the code

In a survey of UK senior marketers by Callcredit, 82pc of respondents predicted digital intelligence will be the new battlefield for marketers, and 72pc said they felt more anxious in their role because of it.

But brands have been trying to market to machines for years. Investments in search engine optimisation, after all, are examples of companies attempting to predict how Google’s algorithms prioritise web pages for users.

“There’s a beautiful circularity to it,” says Brian Cooper, chief creative officer at marketing agency Oliver Group. “It’s like life imitating art. Algorithms try to mimic real life and then real life mimics the algorithms. Marketing will only survive if it continues to adapt and evolve.”

Brands have also been creating content for Facebook’s news feed algorithm (EdgeRank) since its inception in 2001. In May 2014, the algorithm was updated to favour natively uploaded videos – and brands now invest vast sums in trying to reach as many people’s newsfeeds as possible.

Spotting how AI algorithms are influencing marketing strategies, Ogilvy & Mather client Pizza Hut, switched from sharing YouTube links on its Facebook page, to uploading native videos directly to its Facebook page. Video views jumped from the low hundreds to the tens of thousands, even before Pizza Hut had applied any paid media.

AI is shifting from brands serving ads to the right person at the right time to serving them to the right device at the right time. This doesn’t only mean understanding smartphones, but also new AI-powered devices that suggest products or services based on a user’s history, such as voice-controlled smart speaker Amazon Echo.

“If brands are not part of that suggestion, they’re dead to that user,” says Ru Barksfield, CEO and co-founder at adtech firm, Fat Unicorn. “The necessity to market to machines is already a reality, and AI is definitely going to dictate how and which brands are directed to an end user.”

Human touch

With more brands engaging with AI, marketing must become more sophisticated. The best digital content must be recognised by machines while remaining human-focused and meeting the needs of potential buyers.

But while AI can build a creative idea, it’s not creative “in the true sense of the word”, according to Mr Cooper. Machine learning – the driving technology behind how AI can learn – still requires human intelligence to work out how the machine would get there. “It can’t put two seemingly random thoughts together and recognise something new,” Mr Cooper says.

Andy Edmonds, head of engagement at digital marketing agency iProspect, adds: “If we lose sight of the people that are the end users, we will also potentially lose sight of our brand.”

Alessandra Di Lorenzo, chief commercial officer for advertising and partnerships at online travel giant lastminute.com, admits machines have a big role to play in effective marketing today. But maintains that the message itself should always be crafted by, and created for, humans. It also depends on the type of campaign.

Where the content and channel is in a feed-based ad, and where the message is purely transactional, for example, it can be managed in an automated way. For creative and emotive campaigns, Ms Di Lorenzo believes the human touch is essential.

Lastminute.com uses programmatic technologies to combine first-party insights into the travel and lifestyle habits of its website users with other audience trends. The technology shows the company’s marketing team how browsing and booking behaviour is impacted by factors such as the clocks changing or the weather, helping them target consumers accordingly.

“While the serving of these ads is automated, the content itself will always be a human creation, made with people, rather than robots, in mind,” says Ms Di Lorenzo. “The beauty of human nature is that it is ultimately unpredictable.”

A new era

According to William Lidstone, chief marketing officer at marketing agency Razorfish, which recently created an AI app for financial services firm UBS, technology will change the role of humans in creating adverts.

"Theoretically, AI could already write every advert, film, book, formula and song that could ever be written,” he says. “That’s really just a question of processing power and storage.”

As the internet of things continues to take shape, AI will increasingly influence buying habits. While there are more people today who allow AI algorithms to determine the content they consume than the products they buy, the latter will catch up when consumers start automating buying decisions.

One area in which this is set to happen is the connected home. A smart fridge, for example, will automatically purchase new items when they’re running low. This trend, ultimately, could force brands to overhaul their marketing strategies.