The past few years have seen digital metrics leave a huge impact on the marketing world. Across the globe, both online and offline, marketers are turning to data collection and algorithms to help them personalise and automate their efforts, hoping to deliver more relevant, and ultimately more effective, advertisements to existing and potential customers.
Parry Malm is the CEO and founder of Phrasee, notable for its extensive use of AI to generate marketing language that outperforms humans. We recently spoke with Malm about what digital metrics means to marketing today:
One of the main problems I find is that marketers are too afraid to try new things.
This seems to have changed around the time of the 2008 downturn before which people used to receive discretionary budgets and marketing was less metric-driven than it is today.
Since then marketers have essentially become spread sheet administrators and started thinking “Oh look, this ROI has gone up a bit so let’s spend more on that and less on that”, whilst ignoring the big picture of multichannel effect and brand building.”
Q: With such a strong focus on testing, what has been lost?
If you look at Coca Cola and the world’s largest advertisers, they spend more on display ads, sponsorships, billboards and TV than anybody else on the entire planet, and they don’t even measure it super effectively because they inherently know it works.
Whereas people somehow want to deconstruct marketing campaigns and consumer behaviour into spread sheets which inhibits the real power of what marketing is, which is effectively a psychological ploy to make people buy your product.
Q: So, how effective do you believe content and messaging is being tested?
Content is absolutely, fundamentally, incontrovertibly being tested inefficiently. People typically do one of two things:
They’ll test out micro changes, but then you receive micro improvements, so they are constantly chasing the tiny 0.1% uplift. Since when was that good?
They’ll test out two completely random things and one of the choices will win and they’ll start going “oh great that totally won,” and they won’t have a learning methodology in place to actually forward it on to future marketing outcomes.
Q: What advice would you give to marketers who are trying to make more meaningful changes?
One of the main inhibitors of progress is that when marketers try and take risks, they have to build up a whole business case and they have to do a whole report on it afterwards, and if it didn’t work there’s this whole kind of shaming aspect that takes place afterward.
If companies really want to transform themselves, then what they have to do is embrace failure and get rid of this shame-based spread sheet driven culture.
I’d love to see companies start to give marketing teams discretionary budgets. How are you supposed to do testing if you spend most of your time justifying why you should? By then, the moment’s already passed.
Q: What’s wrong with personalisation – isn’t this a positive step away from mass marketing?
I find what marketers do these days is hear a buzzword and then jump on to the bandwagon. In 2007, it was Web 2.0; three years ago it was big data; and now it’s all about personalisation.
There’s actually nothing wrong with mass marketing.
It’s a fact: whether it is online or offline, mass marketing works. But marketers are trying to apply these extreme personalisation techniques in channels which, while they may technically allow it, creates a massive brand opportunity cost from focusing energies in this area.
Personalisation and automation works 90% of the time but the detrimental brand effect from the other 10% is huge – it’s very easy to automate spam and destroy trust.
After my divorce, I kept my ex-wife’s loyalty card to a very well-known retailer (she got everything else). This retailer is meant to be the best at this stuff, but to this day I still get emails that are perfectly personalised offering discounts on tampons, because clearly I haven’t brought tampons in two years so I must have run out.
Another example is a Valentine’s email my friend received from Amazon this year, which was saying “buy something nice on Valentine’s Day” and the feature product was a toilet brush! It must have happened because it’s statistically likely she needs to buy a toilet brush, but it’s on a Valentine’s email?
If even these guys can’t get personalisation right, then it raises real questions for the rest of us.
Want to hear more from Parry Malm? He will be speaking at Technology For Marketing, taking place on 29 September 2016 with the title, ‘Watch your back, this machine can write better than you!’
With Parry Malm, CEO and founder, Phrasee. Phrasee uses artificial intelligence to generate and optimise your marketing language.