(Originally published on Forbes)
We all know the saying: Half the money we spend on marketing is wasted—we just don't know which half. Looking at Forrester and Gartner forecasts for 2018, this kind of waste is not going unnoticed. Ad budgets are in peril. Forrester concludes "ad spend will be flat in 2018 and cause a painful correction in the agency and adtech markets." Gartner agrees that marketing budget growth has stalled, and recommends that execs proactively prepare for budget cuts. It appears we are in for a year of reckoning.
At the same time, 2018 will be the year that another seismic force begins to take hold and transform marketing and advertising. Artificial intelligence (AI) is coming, in every field and in every business, like it or not. Its effects in marketing, if understood and harnessed correctly, will be game-changing.
So that wasted half we can't keep track of? Embracing AI means we can finally understand and address that inefficiency, and develop the clearest picture we've ever had of what is actually working. AI stands to make a huge impact on your most valuable resource: time. Even today, we waste so much time on drafts of copy, image selection, and other time-consuming minutiae. Now imagine that all these tasks are carried out and tested simultaneously, showing you the optimal path forward with a 99% decrease in person-hours spent on the problem. AI will enable marketers to spend their time on strategy and brand building, not on mundane tasks.
Join the Party; Change the Game
Arguably, marketing is lagging in AI adoption. Credit scoring, fraud detection, flight path optimization, algorithmic trading, search, machine translation, early diagnosis of cancer in mammograms, spell checkers, and spam filters already all use narrow AI and machine learning: probabilistic models that feed on data and take action or provide suggestions.
Smart applications of AI and ML are beginning to surface in the industry, but we are noticeably—and not fashionably—late to the party. Central to our hesitation to embrace AI/ML as marketers is a deep-seated suspicion that we are facing a technology that will eventually render us irrelevant. As marketers, we need to discard this trepidation and find smart ways to embrace and utilize AI, and we need to do it yesterday. Fear of AI today is akin to fear of the internet in 1990: there is not any less marketing post-internet than there was pre-internet. Of course, the rules and the arena have changed radically, and in ways that we could never have predicted or foreseen, but by no means is marketing dying.
The basic question of marketing will never change, regardless of how much sci-fi technology is available to us:
What do customers want? Increasingly, they want a relationship with a brand that resembles a friendship. They avoid relationships that feel transactional and are savvy enough to know when pandered to, retargeted, or treated generally like sheep with credit cards. The consequences for marketing are clear: consumers expect to be marketed to in a personalized, concierge-like manner. Brands are expected to add value, refrain from being pushy, and know to say the right thing at the right time.
Achieve the Three Ps
AI will enable marketers to reach the ideal of being prescriptive, personalized, and predictive: the three new Ps of marketing. The data equivalent of 250,000 Libraries of Congress, or 90 years of HD videos (2.5 exabytes) is produced by humanity every day. Locked away in that deluge are powerful insights into what consumers want and how they want to be marketed to, but would take any team of data scientists years to decode—and that data is growing exponentially. As AI tech advances, unlocking this insight becomes a matter of days, hours, or even minutes. The proper implementation of AI could be like having a world-class data science staff in your marketing department, spun up overnight and customized for your business.
On the creative side, I know nerves are raw. But those fears are overblown, and the picture is tainted with pessimism. AI will never replace marketing departments, but it will supercharge them and simply allow for more companies to have access to greater and greater methods of optimizing, measuring, and expanding their marketing efforts. And perhaps most importantly, marketing will change the way we experience the world as consumers. Instead of being spammed by irrelevant messages, consumers will have the digital equivalent of the world's greatest assistant or butler, much more Alfred Pennyworth than HAL 9000.
The future is indeed awesome for marketers, for consumers, and for anyone that can embrace AI and figure it out today.