2017: The Year of Predictive Marketing
By Randy Wootton, CEO at Rocket Fuel Inc.
The predictive revolution in digital marketing is upon us as we move into 2017, ushered in by four forces: Unified Profiles, Algorithmic Attribution, Applied AIand Dynamic Creative. The most innovative predictive marketers will harness these forces to create individualized, custom consumer experiences unlike anything done before.
1. Unified Profiles
A primary challenge today in creating unified profiles is not the amount of data available, it is the ability to turn data into action. The combination of deterministic ID verification and accurate probabilistic ID algorithms at scale creates a difficult web of complexity that has yet to be fully solved. In 2017, predictive marketers will formalize “data strategies” that start with aggregating data from different venues in different formats from different systems of record (e.g., SFA, CRM, MarTech, AdTech).
To reap the full benefit of this data, marketers will need to focus on data hygiene to ensure this aggregated data is accessible and actionable across technologies. Ultimately, this will result in a deeper and more unified understanding of consumers as individuals versus consumers as part of a segment.
There’s already a tug of war between the value of identity solutions as a way of powering contextually relevant, cross-device advertising versus the need to protect consumers from unwanted or excessive third party data collection. This will only become more intense in 2017. Marketing leaders from the world’s biggest brands will need to work with industry trade groups and government regulators to frame a viable solution, or we may all be looking for jobs in 2018!
2. Algorithmic Attribution
Predictive marketers are starting to better understand their audiences as individuals via unified profiles and are able to create meaningful experiences across every device, leading to last touch attribution falling short. By definition, last touch doesn’t capture the complexity of interactions between a brand and consumer that might result in an eventual move from awareness to conversion, nor does it capture the complexity of interactions across devices.
2017 will see the testing and development of new AI-powered “algorithmic attribution” models that move away from last touch and toward more comprehensive assessments. These models will certainly redefine the way predictive marketers measure ROI and, potentially, could radically change the way they allocate dollars. There will be new winners and many losers across the adtech landscape.
3. Applied AI
2017 will be a year in which AI takes another step forward in prominence and capability. The past year saw marked advancements, with IBM pushing its Watson AI more aggressively and Salesforce launching Einstein as Marc Benioff touts an “AI-first world”. AI is cool again. Part of this is due to the rise of the Internet of Things. There will be 30 billion connected devices by 2020, according to McKinsey & Co, and while not every connected device is an advertising opportunity, every device is a potential source of data that can deepen a brand’s understanding of a consumer’s context, behavior and intent.
Big Data has now become IMMENSE Data and the challenges of collecting, processing and acting have multiplied exponentially. Predictive marketers who want to take advantage of this data to create meaningful experiences in the moments that matter need the computing power to augment both their ability to understand, act and respond in real-time — what we call Applied AI. To tie all the pieces together, marketers need the ability to learn from the data and improve the specificity of a campaign — getting the right creative to the right audience at the right time. With the amount of data being assembled and put to use, an amount that is beyond human scale, artificial intelligence provides the most effective way to process the data and make informed decisions.
4. Dynamic Creative 2.0
The next marketing problem that AI will help solve is creative. A seminal example is ING’s “The Next Rembrandt” campaign which used data to create an astonishing, entirely new painting in the style of the old master. But this is only the beginning of what we call Dynamic Creative 2.0. Through AI-powered media optimization, marketers can identify millions of people as individuals (aka unique snowflakes) but they are limited by the cost and complexity of building creative — especially video — to create truly individual experiences for each person. There are several exciting startups (e.g. Flite) that are already able to disaggregate video assets into components. In 2017, predictive marketers will combine AI with these creative management systems to process and assemble creative components into custom experiences in real time. Dynamic Creative will enable the most innovative creative directors to bridge the gap between art and science, which has far-reaching implications for how agencies and brands are organized. We have already begun to see the harbingers of this tectonic shift with the debate about the agency of the future.
The best part of being a digital denizen for 16 years has been the continuous innovation. Nothing is constant. As always, the winners connect the dots across trends to understand when there is really a new paradigm versus just a flash in the pan. We feel the predictive marketing revolution is grounded in foundational shifts in how we think about data, tech and identity, and will open up incredible new opportunities for those marketers who are able to embed AI into their marketing DNA.
