Wednesday, 3 December 2014

There's a storm coming to marketing

Rory Sutherland tweeted a fascinating link a few weeks ago. He does that a lot, but this one in particular has stuck with me.

The link points to this article on Wikipedia, about Moravec's Paradox. Essentially, Moravec's Paradox explains that it's easier to program computers to do stuff that we think is complicated, than to do stuff that we think is easy.

Teach a robot to play world class chess? Done. Deep Blue beat Kasparov in 1997 and it's all downhill from there.

Teach a robot to walk as well as a human toddler? Nope. Now we're stuck.

As artificial intelligence improves, Moravic's Paradox suggests that you should be fearful for your job if you work with data analysis and structured processes. On the other hand, there's no imminent danger of somebody building a robot that's adaptable enough to fix the central heating in every different home. The plumbers will be fine. The jobs that we think of as 'easy' - manual labouring and skills that require some physical coordination - are way beyond the capability of today's computing, but the jobs that we think of as 'hard', may not be.

Keep Moravic's Paradox in mind as we look at a couple of new tools.

First, CasualImpact by Google. (Yes, that name needs a space. No it hasn't got one.)

CausalImpact is a tool for estimating what advertising has done to web traffic. You feed it your traffic stats and your advertising stats and it estimates how hard the advertising is working to create more traffic.

In essence, this is how I've been earning a living for the past fifteen years. Google just automated it.

OK, that's over-dramatic, Google hasn't made me redundant, yet. CausalImpact is a very small stepping stone, which only works for website traffic, in many cases won't work at all and you need a fair bit of technical knowledge to be able to deploy it, because it comes as an R plugin.

R plugins are hard, because R is hard. But then people like @jjmulz do helpful things like this.

And suddenly the ground I'm standing on starts to look shakier again. All programming tools are hard until somebody sticks an easy front end on them. If CausalImpact doesn't do it for you, try another Google funded project - the Automated Statistician. The machines are definitely coming.

This is all early days, but you can see where it's headed. Marketing analysis is a process and it has to be a fairly repeatable one, or you'd never be able to sell it to clients as a product. Without a process, every single project would be its own piece of R&D that might or might not work.

Marketing return on investment analysis is difficult, but so is chess and computers are better at chess than we are. You just have to teach them a framework for understanding the game.

What about the other end of the media planning process? The planning bit, before you get to measure what you've achieved? Charging into audience discovery, comes Profiler, from YouGov.

You probably saw YouGov Profiler via social media in the past few weeks. It's great.

Type in almost any subject area and it will tell you about the people who are interested in that topic. The scope of what you can look up is seriously amazing - you have to give it a try.

If you work in marketing, you'll quickly recognise the screens that pop out of Profiler as 'pen portraits'. These portraits are front and centre in every agency's pitch documents and annual plans. First we tell you about the audience who we want to see your adverts and then we tell you how we're going to achieve that.

Click on the 'Media' tab that you get on the output screen, bearing in mind that this is a demo and the full product will have loads more detail.

Damn, somebody's just automated another part of what marketing agencies do.

It is true that few businesses - other than marketing agencies - will buy access to the whole of YouGov's tool, because it would be too expensive for a piece of kit you'll use once or twice per year. Marketing agencies could still act as an intermediary, holding data and tools and running them for clients. We do this a lot now.

Except that if we've learned one thing about the web, it's that the web disintermediates. If you're sat in the middle of a transaction, making money by being a gatekeeper who controls access to a resource, then you should be scared of the internet. High street shops, travel agents, music labels, publishers... sooner or later, intermediary businesses get slapped by the web, because it puts buyers directly in touch with sellers.

If I was YouGov, I'd sell the Big Expensive Tool version of Profiler, but I'd also make it available on a 'pay as you go' model and let individual companies buy data, one query at a time. At the point YouGov or one of their competitors does that, the insight that agencies can create by profiling an audience becomes quite seriously devalued.

Just like Google's CausalImpact, the profiles that a company runs for itself probably won't be as sophisticated as they'd get from a professional analyst working in a marketing agency, but in many cases that won't matter. Amazon can't recommend books like an independent book store can, but it still forced most of the independents out of business.

Marketing agencies have spent years refining their processes. We're proud of our processes and they're what we use to differentiate ourselves from other agencies. We talk constantly about how we have a process to discover things differently, or connect them differently, or to measure the results better.

Computers are good at processes and this is going to become a serious problem for marketing companies and the people who work in them. Pieces of what we do are going to get automated. Pieces of what we do are already being automated.

The real revolution is quite some way off and you probably don't need to worry about it too much yet, because sexy bits of technology that you only just heard about, are usually ten to twenty years away from actually working properly. In the meantime though, we're going to see many innovations that chip away at the agency model and marketing agencies are going to have to work out - again - what it is that they can actually charge clients for.

We only did planning, until our clients mostly evolved onto fairly similar, effective, best-practice media plans.

Then we did 'added value': Processes, discovery, insight and post-campaign analysis.

When the processes, insight and analysis start to be automated, what will we do then?

My strong suspicion is that a marketing agency's true value lies in human interactions and in explaining the world, person-to-person to our clients. Rather than selling 'things'; media plans, PowerPoint decks, research studies and analyses, we're going to have to become much better at charging for these human interactions. If we don't, we'll slowly be automated into irrelevance.