Expert systems and why marketers are not adopting them
Why marketing does not adopt technology
When I first started driving a car, the radio had a cassette, the windows were hand-cranked, and the dash had chrome dials and gauges. Pure Analog. Now my car is a veritable treasure chest of intelligent systems. I still decide where I am going and how I will get there. But now I am informed about cars that are too near, the range of my gas tank, entertainment options via satellite, and real-time traffic ahead. Tools enhance my driving; they help me navigate many challenges and make it safer. I drive in an augmented reality.
This same supported environment is not a reality in the marketing industry. 71% of CMOs surveyed by the CMO council state that they are not using the analytics they buy. Instead, they trust in things they know how to manage. Hope for the best and explain what they know. They let their own cognitive skills act as an upper bound to their effectiveness when they could break through that ceiling with expert systems that augment their intelligence. Despite the advantages of having these systems, marketers are not adopting them for four reasons.
Creative is king
As the series Mad Men depicted, marketing leadership has a long tradition of standing behind its creative ideas. It has long been a way of moving forward and advancing. All the incentives and training around the industry link to strong campaigns. It’s a world where awards matter. Measurement is an elusive idea. Managers avoid hard discussion on return-on-investment. They either neglect it because it is not fun or because they are unable to calculate it.
The depth of this creative culture has withstood shocks. Most notably, the decreasing CMO tenure to less than 2 years has not created a demand for new techniques. Rather “I had the CMO position at (name a company)” has become acceptable. Part of the resume of any CMO is being a CMO somewhere else. It’s a reference that does not prevent them from getting their next position. Others in their organization see that there is no industry-wide penalty for failure, so there is no industry-wide change.
Once that layer of management becomes entrenched, colleges and university develop curriculums that meet the establishment’s needs. There is a reinforcing culture of fitting in and making it work. The system becomes transgenerationally bounded by what human expertise can solve. The unsolved part of the problem that is knowable remains untapped. Tools like artificial intelligence and machine learning lay waiting. It would be like driving a car with just the gas and the brake and ignoring the rest of the telemetry available.
Consultants encourage complexity
Operating in a corporation and managing a brand is hard. As a marketer, it would be reasonable to say I can only know so much. I need to maximize my skills. I will leave my missing expertise to the experts and manage them. So, what then about these consultants. Why are consultants still a necessity? The fact that consultants rake in $50b a year in professional fees servicing brands is a clue. Their expertise has value. But the value added for their clients does not always meet the fee for expertise.
The unjust component is how many consultants expand the need for expertise. They make things more complicated than they are. Some drive up the need for more data or more time to solve problems. These ideas among others are ways to expand their fees and generate more revenue. They are not just filling a need for expertise, but constructing false layers of requirements. False layers of complexity increase the belief that marketers cannot do it on their own. It reinforces the consultants’ position in the ecosystem while furthering their financial interests. They build a wall between brand managers and solutions. The end state remains elusive, but always somewhat nearer as each project ends.
Agencies do not invest
As brands push for better solutions and consultants pull their clients down more complex roads, it would seem agencies could break through the expertise inertia. Yet, by and large, they do not. It may seem folly for them to not step in; after all, they’re already well-positioned to provide it. But the expectation of more complexity and more requirements has impoverished the agency.
Over the past decade, media budgets have gone up. During that same period, consultant dollars have increased in the billions. Yet, agency revenue has struggled to keep pace with inflation. As pressure mounts on procurement to cut expenses, it has come on the backs of agencies. Reviewing the financials of publicly traded advertising companies reveals an insight. Looking at revenue per employee, adjusted for inflation, suggests that agencies have not had a pay increase in 8 years.
Cutting costs have scared agency leadership away from thinking about investments. They will only pay if their clients will pay first. It’s a catch-22 for executives. “I am at an agency that needs to invest but I cannot do so without my client who is cutting my budgets. My agency has clear ratios I have to manage to that are set by procurement and anything outside of that is the risk. My clients look to consultants for expertise so I cannot win there. I am hoping that technology will help me out. I have learned over time – the technologists are not my friends either.”
Consultants monetize data not productivity
A great promise of technology is that it increases productivity. An individual with a piece of technology does more work in the same amount of time or the same work in less time. This acceleration of work via technology means that solutions themselves go fast. Providers must tackle large problems to sustain their growth. If the problem is small or rapidly solved, technology finds a quick road to market saturation and flattening revenue.
Marketing technologies are excellent examples of solutions making fast inroads into small problems. Too fast. We are witnessing technologists with flattening revenues encroaching on service revenue. And so, technologists have quietly retreated from their promise of productivity… Among the many new marketing tools, data management is the most visible add-on. Consultants have hyped the need for it, agencies cannot manage it, and marketers must leverage it. Enter a new expert in technology clothing. The game continues with an ever-expanding pie sliced up in new ways. This dynamic keeps the players entrenched and secure. Meanwhile, solutions improve, but with suboptimal value-added.
Taking over the solution
Marketing strategy is increasingly complex. Making sense out of what is happening is hard and on our own, we do not have the skills needed. But that should not define the limits of our problem-solving capability. So how is a company to find its way to a lower cost, more efficient, and empowered marketing technology solution? The answer does not live in marketing. It lies outside of it. It relies on technology to augment our intelligence and enable us to do something better. It relies on an intellectual commitment to why something needs doing – not what and how it is done. The thinking might go something like this:
As a leader of a brand or company, I am going to invest in my own company’s capabilities. I will develop a best-of-breed solution where expertise is with my team. My goal is to build an independent capability. One that defines my strategy. Once that is in place, I will pick the best set of agencies, consultants, and technologists to service the task. I will defy conventional wisdom to meet my fiduciary responsibilities and enrich the lives of my employees.