Is Brexit marketers’ biggest challenge? No, the apocalypse is coming
Editorial

Is Brexit marketers’ biggest challenge? No, the apocalypse is coming

With Brexit absorbing the nation’s attention, marketers are at risk of ignoring the other challenges bearing down on them. Indeed, fears over big tech, GDPR and automation, together with Brexit, could create conditions for a perfect storm. Here we explore the impact of these ‘four horsemen’ of the marketing apocalypse.

Horseman one: Brexit

When ITV recently announced its profits had fallen by 6% last year, the network blamed the continuing political and economic uncertainty caused by Brexit. It said that a lack of clarity on a future exit deal had forced companies to cut their marketing spend, which in turn had a negative impact on advertising revenue.

The situation is clear: as Britain edges through the Brexit minefield, marketers across the country are feeling the strain. Some are battening down the hatches and reducing spend, while others are seeking new avenues through which to engage internationally.

But a narrow focus on Brexit might occlude the bigger picture. As well as Brexit, there are three other ‘horseman of the apocalypse’ thundering along in our direction. Each represents an ongoing global challenge of which marketers must be aware.

Horseman two: fears over big tech

The second horseman, is what Wired Magazine has dubbed The Great Tech Panic of 2017, which is still with us in 2018. In essence, mega-advertisers Facebook and Google are losing the trust, not only of consumers, but of governments, too.

Facebook was famously mentioned more than 30 times in special investigator Robert Mueller III’s indictment of 13 Russian operatives earlier this month; the platform was described as the principal weapon in the ‘information war’ between Russia and other countries.

Two particular Facebook tools beloved of marketers were used to undermine US democracy. The first is Custom Audiences, which matches a business’s email list to Facebook profiles of the same people. The second is Lookalike Audiences, which matches those Facebook profiles to their friends, and then allows firms to serve ads to all of them. It may sound, in the words of Wired magazine, “incredibly dull… until you realise that the fate of our 242-year-old experiment in democracy once depended on them, and surely will again.”

The Russian interlopers and, separately, Donald Trump’s head of digital, Brad Parscale, used Custom Audiences and Lookalike Audiences a lot. “I always wonder why people in politics act like this stuff is so mystical,” Parscale told reporters in late 2016, explaining that it was just the same ‘stuff’ as used in commercial settings – but with “fancier names”.

“[Custom and Lookalike audiences] is the tunnel beneath the data wall that allows the outside world into Facebook’s well-protected garden, and it’s like that by design,” said an ex-member of Facebook’s monetisation team.

Will Facebook do anything about the abuse of these tools? Not likely, says The Industry Standard news website founder John Batelle. He believes Facebook cannot put a stop to advertisers exploiting these tools without destroying its own profits as well. But if taking responsibility (especially in the wake of the ongoing Cambridge Analytica revelations) still doesn’t feel like a straightforward option for Facebook, then surely, many commenters are suggesting, the next step will be increased regulation through legislature.

Horseman three: GDPR

Our third horseman is the EU’s General Data Protection Regulation, which comes into effect in May. The GDPR boasts stringent new privacy rules that will impact marketers at organisations of all sizes. Although the message is gradually getting through, many businesses are only now starting to appreciate how the legislation will impact on their operations. CIM’s ‘Challenges and Opportunities Facing Marketers’ research report showed that half of marketers don’t understand the implications of GDPR, and a worrying 16% think it does not apply to them.

As a consequence of the new rules, marketers will face a renewed legal requirement to ensure customers know exactly what data they are giving away, and what it will be used for. It could mean that organisations will need to delete existing data that was collected without explicit consent.

It means GDPR could make targeted marketing more difficult. Seventy-three per cent of Facebook’s European users have been targeted by marketers based on personal characteristics such as sexual orientation or political beliefs. That will be illegal under the new legislation.

Punishment for EU marketers who do not follow these rules is fierce, including having to surrender 4% of worldwide turnover.

Horseman four: automation

Our final horseman of the apocalypse is fully-automated. In the latter half of 2016, US communications provider CenturyLink made a small investment in an AI-powered sales assistant to see if it could help the company identify hot leads without hiring an expensive army of sales reps.

The Conversica AI, a virtual assistant named Angie, sent around 30,000 emails a month and interpreted the responses to determine who was a lead. “She” set the appointment for the appropriate salesperson and seamlessly handed over the conversation to the human.

So far, the AI has earned £14 in new contracts for every £1 it cost, according to CenturyLink. The same Conversica AI assistant has now been used by Epson America to respond to 40,000 to 60,000 leads from trade shows, direct mail, email marketing, social media, and print and online advertising. 

The response rate with the AI assistant is 51% – a 240% increase from the baseline established at the beginning of the pilot, and a 75% increase in leads. That has produced £1.4 million in incremental revenue in just 90 days, according to Epson.

So, what’s the problem? AI (so called co-bots) clearly boost the efforts of marketers.

Trouble is, they may be too efficient. In so-called “single domain” process-driven jobs, AI outperforms human beings by a large margin. Areas such as customer service, telemarketing, truck driving, and other routine blue-collar and white-­collar work can be done better at almost no cost by AI and robots.

When will this AI takeover occur? Soon. Some call it the fastest transition humankind will have ever experienced. Will new jobs be created in time to tackle the millions made unemployed by AI? Or will we still be arguing over Brexit?

If you listen carefully, you can almost hear the sound of galloping hooves coming in this direction.

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Andy Pemberton Director Furthr Ltd
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