Artificial intelligence has dominated popular culture for years; it may soon dominate marketing. Scientists, researchers and marketers are looking for the next step to make data self-aware

“If a machine can think, it might think more intelligently than we do, and then where should we be? Even if we could keep the machines in a subservient position, for instance by turning off the power at strategic moments, we should, as a species, feel greatly humbled.” –

IBM’s artificial intelligence (AI) platform, , is loquacious; it can tell jokes, answer questions and write songs. Google’s AI can now and can within hours. MIT’s AI can . Tesla’s AI powers the company’s . All seem to propel us closer to Turing’s world of machines with more intelligence than humans.

If Turing’s words now ring true, should we feel humbled or anxious? For many marketers, the anxiety and existential fear has given way to hope and excitement for a new tomorrow. 

“It’s exciting, isn’t it?” says , who has been studying data’s impact on marketing for 30 years. Dome, who works as a marketing consultant and adjunct professor at University of Chicago’s Graham School, grows excited as he talks about the possibility of AI: the time it could save marketers, how it can bring companies closer to consumers and its potential to catch customers in stride, saving effort on the business and consumer side. As an integrated marketing communications professional, his excitement about the potential of AI has given way to the belief that AI will completely change branding, marketing, advertising and perhaps the world. 

“Just think about all the innovations, all the promise of technology,” Dome says. “Is your life now really that much more convenient? Is it easier? I don’t know that it is. 
 I think in order to be able to fully benefit from a data-driven marketplace, marketers will have to take a broader perspective on problem resolution, and the tribal approaches that Pedro Domingos has articulated are the solution.”

Dome is referring to , The Master Algorithm. This is the future of marketing, he believes. Dome animatedly spins his fingers around a circular chart within the book that explains the need to bring unique tribes—or philosophies—of machine learning together, each with their own algorithm.

So certain is Dome that AI is the future of marketing that he has banked his time and money on it with Core7, what he calls his “entrepreneurial sabbatical.” Core7 is, in theory, a marketing platform that applies AI to marketing ecosystems via a “master algorithm.” The algorithm would be licensed to brands and agencies, which he says would create a hyper-speed version of a fully integrated marketing ecosystem. However, Dome has been unable to get the company off the ground; investors have not yet been on board with the idea. It’s an ambitious goal, he admits, and when he first started pitching the idea two years ago, it was downright audacious. The Core7 team was developing the platform and algorithm and ready to go further, but thus far, Dome has been left to study AI from the outside.  

Dome still believes he’s on the path to finding marketing AI’s master algorithm. “It may not be me, but it will be somebody like me that will ultimately develop an applicable master algorithm in marketing,” he says. “I’m disheartened to some degree, but at the same time I know I am on the cutting edge of where the marketing industry is headed. I know that philosophically, I’m there.”

What Is Marketing AI?

For many marketers, terms like AI, machine learning and master algorithm may seem akin to a foreign language. In Domingos’ words, the “master algorithm” would work much like a key that could open every lock. A professor of computer science at University of Washington, Domingos says this is the big difference between the machine learning he writes about—which functions as the limitless key—and traditional programming. To keep the comparison consistent, new keys must be created for every lock in traditional programming; if marketers want to track a certain subsegment of customers, they must create a new algorithm for each. 

“The beauty of machine learning,” Domingos says, “is you don’t have to program the computer to do any of these things. The same algorithm will learn to do all of them depending on the data you give it.”

Domingos describes AI as a subset of computer science, in which computers can undertake reasoning and common sense tasks—such as vision and knowledge—which were formerly only undertaken by humans. 

Stuart Russell, professor of computer science and Smith-Zadeh professor in engineering at University of California, Berkeley, describes AI a bit differently on his website: “It’s the study of methods for making computers behave intelligently. Roughly speaking, a computer is intelligent to the extent that it does the right thing rather than the wrong thing. The right thing is whatever action is most likely to achieve the goal, or, in more technical terms, the action that maximizes expected utility. AI includes tasks such as learning, reasoning, planning, perception, language understanding and robotics.”

is a subset of AI that allows computers to learn the same way people do, only faster, without being explicitly programmed, Domingos says. Machines can rapidly change, grow and create when new data is inputted into the system. In theory, this means a program might be able to do years of work in the span of days or even moments. It is, Domingos says, the fulcrum of AI and what gives computers potential to learn, hold conversations, seem human and potentially create their own marketing algorithms. 

“AI is the goal; AI is the planet we’re headed to,” says Domingos. “Machine learning is the rocket that’s going to get us there. And Big Data is the fuel.”

The central idea for Domingos’ “master algorithm” is to take algorithms from the five machine learning schools of thought (Bayesians, Evolutionaries, Connectionists, Symbolists and Analogizers) and meld them into one. The Core7 concept would shrink this down to an industry-specific basis, Dome says. For example, the automotive industry could have a single master algorithm, as the customer journey is essentially the same at each company. This master algorithm would, in theory, add efficiency, increase ROI and allow brands to develop a customized relationship at the consumer level that would revolutionize branding. While Dome’s dream has yet to be fulfilled, Domingos already sees an entryway within the marketing industry. He believes that in five to 10 years, machine learning will be used beyond marketing and across entire companies.

“The first can be segmentation 
 but then it spreads to everything else,” he says. “When you look at companies like Amazon and Google—the most advanced in machine learning—they use machine learning in every nook and cranny of what they do.” 

In fact, Amazon has become so good at machine learning that a third of its business comes from a machine learning-powered function: recommended purchases. Similarly, Domingos says approximately three-fourths of movies watched on Netflix come from the company’s recommendation system, which also runs on machine learning. 

“The recommended system is very famous at Amazon, but it’s one of many,” he says, calling this “quintessential machine learning.” “They’ve become good enough at this that they’re starting to roll out what they call ‘predictive delivery,’ in which they send you stuff before you even order it. They’re so confident you want it that they just put it on the truck. I’ve asked them, ‘What happens if I get this and I don’t want it?’ They say, ‘Well, we’ll just let you have it for free.’ This is how confident they’ve become in their ability.”

While Domingos says Amazon has yet to pinpoint exact future purchases, the company is adept at stocking items on the delivery truck with the knowledge that someone will order that item within hours. 

This concept could solve a real challenge marketers have: hitting the customer “in stride,” not just having them come to you, but knowing when they stop and start, where they travel and what they need. Knowing their desires, more or less, and having the ability to communicate with them via AI chatbot programs or automated messages without wasting employee time. The potential of AI allows companies to use data already at their disposal to measure in real time, learn more about the customer and anticipate what happens next.

“Today is very much a race to who can develop the master algorithm first,” Dome says.

Marketing’s Quest for Singularity 

“Our technology, our machines, are part of our humanity. We created them to extend ourselves, and that is what is unique about human beings.” – Ray Kurzweil, futurist, computer scientist and inventor 

When Markus Giesler was a child, he was floored by the idea of the profoundly villainous HAL 9000, a conceptual AI from Stanley Kubrick’s “2001: A Space Odyssey.” He was so titillated by the idea that he and a friend tried to recreate a good-natured version of HAL in his own home. For weeks, Giesler would videotape his parents as they entered and exited rooms. He analyzed their language and noted their moods, realizing his AI would have to be tailored to his parents’ experiences to deliver the realism of HAL. 

“ÂÜÀòÉçčÙÍűt a month or two later, we had finally established a constellation that worked: every time our parents entered the room they were able to have a one-minute conversation with a computer. Not really the most elaborate chat but enough to impress them—and the occasional guests,” . 

Giesler, who is the chair of the marketing department at York University’s Schulich School of Business and director of the Big Design Lab, researches AI concepts further down the path of his childhood creation, such as smart homes and driverless cars. However, humans were interested in AI long before his adventures with HAL, all the way back to antiquity before the Middle Ages, he says. There has always been a longing for what he calls “technology with a spirit.” 

“It’s surprising to me that we’re only now beginning to see AI as a marketing construct and as something to look into from a marketing and customer experience design standpoint,” he says. “It makes sense for it to become more mainstream now when you consider the influx of AI algorithms, apps and mechanisms coming into everyday consumption, but artificial intelligence is not necessarily a new thing.”

What has changed is the awareness of AI, particularly in marketing. This awareness seemed to begin with a bang in 2012 with the infamous story of Target accidentally figuring out a young woman was pregnant before her father did by automatically analyzing her shopping habits and sending her advertisements for baby necessities. Now, perhaps startled by the technology’s abilities, companies have convinced themselves of AI’s impact. In a June 2016 report, with 55% of CMOs expecting AI to have a “greater impact on marketing and communications than social media ever had.” This change in awareness may go a long way toward marketing and other industries accepting AI. Giesler says a shift in the decision-making process takes as much change in humans as it does in technology.

“I am most fascinated with AI in marketing when it’s invisible,” he says. “It’s one thing to talk about AI as this [creation of] applications that totally immerse consumers into these extraordinary experiences. It’s another to see how AI has invisibly crept into some of the most taken-for-granted aspects of everyday consumption to shape who we are as individuals, who we are as families, how we think about safety, togetherness and all this. One level on which we see that is cellphones having become an extension of who we are.

“AI is dramatically reshaping and redefining not only the market and what companies can or cannot do with customer experience, but who we are as individuals and groups,” Giesler says.

Writer Robots

In a towering office building off of the Chicago River sits a notable example of AI’s current and potential capabilities. , a natural language generator, has become well-known by marketers for its ability to produce written stories within seconds based off analytics. The company’s AI can use data from Google Analytics, for example, and write sentences like: “New users spent 16 fewer seconds on your site than returning users did last month. This could indicate that your new users didn’t ïŹnd the information they needed or came to the site expecting something else.” 

Katy De Leon, vice president of marketing at Narrative Science, says she couldn’t believe the company’s claim when she first read the job ad four years ago. “It just sounded incredulous to me,” she says. “I needed to talk to someone about it because I just couldn’t believe it.”

After four years of seeing AI in action, De Leon is a believer in not just Narrative Science, but in the potential for AI in marketing. AI has come at the right time with the explosion of Big Data, she says, and her company’s capabilities are especially mind-boggling at first glance for those on the outside. Narrative Science, born at Northwestern University as a collaboration between a computer science class and a journalism class, received coverage early in its existence when journalists at were awed by a tool that could put together sentences from raw data—in this case, reports from sporting events. Now, the most lucrative customers of Narrative Science are in the government and the financial industry—think Fortune 1,000—as well as web analysts and small to medium-sized marketers.

Eyes across the industry are on the marketing tech landscape, which even De Leon admits is getting crowded and noisy. However, with increasing access to data, it’s never been more important for organizations to make sense of the noise. AI is another tool marketers can have at their disposal with potential for saving money, increasing efficiency and improving business. 

“When you have 20,000 customers and you want to communicate with them as if you know them very well and 
 communicate something relative to them—something they care about—we can enable them to get to that level of personalization at a scale that wouldn’t be possible with people,” she says.

Where is Marketing AI Going?

Marketers should expect quick changes with AI’s potential to build upon and grow itself, experts say. Businesses and marketing departments are already vigorously moving ahead with the adoption of AI technology, according to . They are eager to see its promised benefits come to fruition.

“It’s not just about automation for automation’s sake, but if we can go faster, there’s more money to be made,” she says of the average company’s mentality. 

How humans view technology, especially in marketing, has progressed over the past five years, Quoirin says, and it’s likely to keep progressing at breakneck speed. There are many possibilities for AI in marketing, health, entertainment and business; the technology is just starting to bear fruit, she says. 

One possibility sure to entice across industries is what Quoirin calls “beyond human” AI, which can be used to “cheat death,” as well as add human bio-enhancements, prosthetics or implants. This could work well in the medical field, of course, but she says it may also work from a customer experience perspective. Marketers could find interest in tools for performance improvements for the average person; ways to burn calories, eat well, work faster and move better, especially considering the success of gadgets such as the FitBit. 

“Broadly speaking, we tend to find that as soon as people are using [technology] like this in a context where it helps them get things done faster, they adjust to that convenience very quickly,” she says. “What we see is that it is a question of ‘when’ rather than ‘if’ with AI. But it will happen bit by bit. A lot of the things we worry about will just gently recede as we get used to being better humans.”

AI advancements may also change the concept of who we are and how marketers interact with humans and their technological extensions. Giesler says how consumers represent themselves online, how machines become an extension of who we are and whether marketers should market to these technologies once they gain a certain kind of sentience are all concepts he actively studies. “That’s wicked, right?” he says with a laugh. 

Gieseler has done his own research on where humans end and where machines begin, which he says is an unbelievably fascinating and terribly scary new frontier to study. This inevitably leads to questions about how people live, how their habits are measured and how they’re watched by government-run AI technology, such as facial-recognition software—another budding AI concept. This brings to light existential fears of society becoming a bit too similar to , causing many to demur at the thought of AI’s rapid progress. Through all of these possibilities and theories, Giesler believes marketers can take center stage in redefining and renegotiating the boundaries of where the human ends and where technology begins. It’s an onerous duty filled with opportunity. 

“We are the ones who best understand the human technological interfaces and how to design markets that are truly better than the sum of their parts when it comes to these redesigned interfaces,” he says. 

Apple is the best example of this thus far, Giesler says. He’s assisted in Apple’s research and says Apple TV—a recent advancement that Steve Jobs called simply a “hobby”—is .  

“For a long time, Apple adopted this top-box approach where you have the Apple TV box next to other cable boxes. That probably didn’t work,” Giesler says. “The difference came when Apple recognized that consumption is really more a matrix than an individual box with a person looking at a TV screen. If you want to conquer the living room, you really need to spread all through the home.”

By seeing the market as more of a matrix, he says Apple cleared the path for marketers to use interfaces that let consumers better navigate their lives. Enabled by AI, Apple and researchers made these advancements after looking through the lens of today’s technology-enabled world. 

“AI leads to changes in the way we do marketing, not just in the tech space literally, but also metaphorically, in terms of how we understand brands, customers and market segments,” he says. 

Will Marketing Jobs Be Safe?

Upon hearing about AI’s capabilities, many will ask, “What’s the catch?” There are the existential fears expressed by . There are fears that AI could occupy the citizenry’s space too heavily and be seen as an invasion of privacy. Then there are palpable fears of AI taking jobs away from marketing and many other industries. After all, robots and computers don’t make a yearly salary. 

According to a June 2016 report from Forrester, AI, machine learning, robots and automation will mean a net loss of 7% of U.S. jobs by 2025. The technology will mainly eat away at office and administrative support staff. New jobs, such as content curators, data scientists and robot monitoring professionals, will be created, but the losses will be greater than the gains.

“I think there will be an impact on jobs; we call this trend de-pop in the sense that working at large is going to change,” Quoirin says. “There will be competition for jobs. Equally, the new jobs will create new demands 
 We do see a shift in that.”

Even with fears of job loss looming in marketing and across other industries, Domingos says humans will still be necessary due to a paucity of data scientists, or those who automate the work of computer scientists and create AI algorithms. These algorithms have potential to take jobs—a factor of 1 million, when you talk about automating the jobs of computer scientists, Domingos says—from many people, but there’s a lack of data scientist talent. 

“The war for talent is really raging,” he says. “One reason the demand has exploded and the supply changed quickly is you need people with a Ph.D.; that takes five years. … The irony is a lot of the professors are moving to the industry level, which is good in the short term but it’s actually eating the seed corn. There are not enough people to train the students.”

This may come as a breath of relief for marketers, but Quoirin says marketers should expect the necessity for a transition of skill set and talent management to more creative and conceptual endeavors, areas where humans thrive over machines.

“Let’s not be too vanilla on this: If we take a sector like finance or retail baking, there will be an eye on how many tellers can be replaced,” she says. “Those numbers of cost cutting will have been done already. But let’s face it, without even a hint of what’s to come in AI, those jobs were under threat. Simple computer processing and mobile banking have already threatened those kinds of things. Artificial intelligence is much beyond that level of cost cutting. People are mostly thinking about how they can rechannel mundane jobs.” Although Quoirin believes AI will be “unstoppable,” she says humans will still be needed to interpret AI’s signals and numbers. 

AI is expected to keep growing. Neuroscientist and author Sam Harris, who presented a to lose control of AI, said on his podcast “Waking Up” that AI’s growth will keep advancing unless something much worse happens to society first. For this reason, Quoirin believes menial jobs will eventually be replaced by the robots, which may mean an alternate solution, such as a minimum salary for all, needs to be considered. 

“There is, of course, also the future where we just work less,” she says. “And we get longer weekends. Wouldn’t that be fantastic?”

The Way Forward: Excitement or Fear? 

“Some people worry that artificial intelligence will make us feel inferior, but then, anybody in his right mind should have an inferiority complex every time he looks at a flower.” – Alan Kay, computer scientist 

AI’s marketing moment may be coming soon, if it isn’t already here. Domingos says Silicon Valley had its AI tipping point five years ago but kept it to themselves as a “secret sauce,” of sorts, for competitive advantage. Now, the proverbial cat is out of the bag and he says CEOs of Fortune 500 companies demand AI. “I don’t know what it is yet, but I know we need it,” Domingos says, doing his best CEO impression. However, he believes adopting AI will be easier for digitally native companies—such as Facebook and Google—or industries like marketing or finance where data has been essential from the start. 

“The companies furthest along also happen to be in sectors where they have profit margins large enough for them for afford machine learning efforts,” he says. “If you’re Google and you [essentially] print money, you can afford to spend money on machine learning and you do. If your profit margins [are 1% or 2%], then it’s harder. They can only afford to do it so much because they don’t have money to do more.”

For the Doug Domes of the world, this makes AI look that much more enticing. Dome believes AI has “limitless” potential for profitability and says the positives of the technology will be immense, even if there are some ethical and moral bugs to work out. 

In Giesler’s view, the negative predictions of AI have always been around; he’s always heard that his beloved HAL 9000 would be created in real life. However, despite advancement, he thinks AI is still far away from the ability to snuff out humans. 

“There is something about being human that is unique,” he says. “There are simple mechanisms we can use to unmask the technology as what it is: a stupid series of algorithms that doesn’t really get it. That’s still pretty much the reality of everything we have around us.

“All the beautiful things we associate with marketing, they are and will continue to be the human actors and the human participants, not so much the technology,” Giesler says. “The beauty of real technology is that it’s like a mirror: We look inside it and what we see is who we are as human beings. Markets are human. The technology helps us get closer to the beauty of that principle.”

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Big Data is everywhere in the world of marketing. Symposiums, staff meetings, articles and reports. It’s easier to list business functions where Big Data is not mentioned by marketers at every turn. Numbers cited in a recent blog post by Brian Hopkins, vice president and principal analyst at Forrester Research, lead one to believe that many companies’ focus on Big Data isn’t getting the desired results. . Worse still, business satisfaction with analytics dropped 21% between 2014 and 2015.

Although companies seem unsatisfied by their Big Data capabilities, they continue to swell the budget with new tools, software and capabilities. Worldwide revenue of the Big Data market is expected to skyrocket from $18.3 billion in 2014 to $92.2 billion by 2026, according to Wikibon. 

, wrote a 2012 post for Harvard Business Review, titled that noted how difficult it was for companies to find insights among large swaths of data. Has anything improved in 2016? Kamal isn’t sure many companies are making progress.

Brent Dykes, director of data strategy at Domo, writes in Forbes the very link Forrester says 71% of companies are missing. This link will be important to advance use of data, as companies are likely going to want to see good ROI on that reported $92 billion Big Data bill.  

Kamal says though Big Data is a huge part of how Aspiration makes decisions, finding value in that data can be time consuming. “Getting to that level is one of the most difficult parts of being a data-driven organization,” Kamal says. 

Here are six tips for marketers to help their companies generate usable, data-based insights. 

1. Determine what’s actionable.

Before hunting for insights, Kamal says marketers must have a clear idea of what is actionable in their business. Companies that travel down the rabbit hole of data exploration will lose time and waste employee energy unless they can set parameters on what they want to achieve. Kamal suggests starting with the problem before searching for insights to improve productivity. 

“Let’s say we’re trying to understand customers or trying to improve some aspect of our conversion funnel,” Kamal says. “We have a pretty clear idea of what we want to do. Then, we look for data that can help us achieve that.” Insights can be very interesting, he says, but to apply them, start with a solid idea of your core business problem and how you think you might be able to solve it.

2. Simplify the process by focusing on decisions.

Marketers can simplify their search for actionable insights by focusing on the important decisions stakeholders or customers will make, according to Bill Schmarzo, CTO of Big Data practice at Dell EMC Global Services.

“Our focus is on the decisions, not the questions,” he says. “Questions are informative, but decisions are actionable. Improving decision making is the best immediate-term way to monetize the organization’s data. Think about the power of improving customer acquisition decisions, such as who to target, with which messages, at what times of day, with what offers, through which channels.”

After marketers identify decisions stakeholders need to make, Schmarzo says companies must identify the metrics that might predict performance. This, he says, is the definition of data science and is critical for success. Companies must remember to focus on the word “might,” he says. There will likely be a large amount of ideas that come from these predictions; emphasizing “might” gives license to be wrong and suggest other ideas that others “might find stupid.”

“During this process, all ideas are worthy of consideration,” Schmarzo says. “Once we have brainstormed the variables and metrics that might be better predictors of performance, then the data science team will apply their techniques and algorithms to actually determine which variables and metrics are better predictors of performance. If you don’t have enough ‘might’ moments, then you’ll never have any breakthrough moments.”

3. Be mindful of stored data.

Ninety percent of data will never be used, according to a prediction from . The peril of this over-storage is that marketers lose a level of discipline about what they should be collecting, what they shouldn’t be collecting and why. 

The idea of collecting data in these data lakes is the same idea behind having a single view of the customer, or a comprehensive view of customers including their behavior and attributes. 

“As with Big Data stores, trying to put everything into the customer record can create a kind of overwhelming mess,” Kihn says. “Always start with the end in mind. What do you need to know? What data do you need to answer this question? How can you put it in an available store that is fast enough and query-able for your team? Lead with the question and not with the database.”

4. Keep smart humans employed.

The age of artificial intelligence, machine learning, Big Data and automated processes are giving hope that actionable insights will automatically appear, as if by magic. However, Kamal says finding actionable insights is driven as much by smart humans as it is by actual data.

“The technology we use is fairly basic,” Kamal says. “In the end, humans end up as the most valuable cog in the wheel.”

Kamal has yet to find a magic tool that produces incredible insights, but technology can be helpful to operate in a machine world where things often don’t make sense to humans. However, automation is still riddled with errors and may end up creating more problems than it solves if there are no humans in the loop. Technology is useful, but Kamal says there needs to be creative personnel to develop new ideas, think intelligently about who the best audience is and consider that audience’s receptiveness to new products and services. “That’s very hard to automate. Machines tend to be great at optimization, but at least for now, not as good at coming up with the bigger ideas that can really move the needle in business.”

5. Understand consumer and business needs.

Marketers looking for actionable insights must better understand the challenges faced by customers, Kamal says. This means speaking with those who use the product or service—otherwise known as qualitative insights—before digging for data-based insights.

“We spend a good amount of time using [and] checking accounts and investigating products. And we spend time using our own products,” Kamal says. That means signing up for accounts, looking through sites where Aspiration places ads or organic social and being immersed.​ 

Other ways to get into the customer’s mindset include focus groups, studies and improving the product or offering. The customers’ point of view can also be perceived by looking at the company’s ads with an unbiased eye, using the product or service and trying to figure out where problems may stem from. If the sign-up or log-in process is slow, for example, that’s likely an area where customers will have difficulty. 

Organizations must also understand key business drivers inside their own walls by digging into data and business propositions. Kamal encourages understanding the key differentiators of your business as well as the key barriers preventing people from working with you.

6. Find a data balance.

More data is not always better data. Kamal says companies must use high-quality data to find actionable insights. This means not getting lost in the quantitative data swamp, stepping back and doing “sanity and gut-checks” or speaking with customers for more nuanced, qualitative information. 

Companies must also cut away silos that keep departmental data in feedback loops by getting different people from different disciplines involved. Solving issues as a team, instead of department-by-department, will likely cut down on mistakes and make solving easier.

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Problem seven is balancing incremental and radical innovation.

The ÂÜÀòÉçčÙÍű’s first intellectual agenda is meant to serve as a source of guidance and inspiration for marketing professionals as well as academics. In it, we lay out the “seven big problems” marketers face in the boardroom and in the marketplace. These problems are a large part of that intellectual agenda, and will help us hone in on how we inform and inspire you, the marketing community.

Here, we dive into the questions that stem from each of the seven problems. ÂÜÀòÉçčÙÍű thought leaders discuss the “what” and “why” of each pillar problem, while we leave the door open indefinitely on the “how.” After all, marketing is about rolling with the punches.

Diana O’Brien

CMO at Deloitte

Today’s marketing landscape is rapidly transforming. Change that once happened in months, years and decades now often happens in days, minutes—even seconds. CMOs should stay ahead of marketplace trends, new technologies and evolving customer needs, but they can’t be distracted by them. Trends come and go, but your people are what really matter. The most effective organizations view talent as a competitive differentiator. They create the environment and experiences so their people can be their best. One of the most important investments any organization can make is in nurturing the capabilities, organizational energy and wellbeing of its people.

Lukas Bower

North American CEO at etventure Inc

The biggest challenge is culture. Most organizations are focused on key performance indicators involving top-line growth or bottom-line savings. Shifting the organizational culture to an innovation mindset is difficult, as the collaboration and risk-taking required can put KPIs at risk. One effective way to incorporate design principles is to create a protected space away from the core business that is unaffected by the KPIs driving business as usual.

The best approach to “failing fast” is to create minimum viable products. MVPs are not fully featured, and may even involve human activity behind the scenes to make them work. The whole point of the MVP is to validate your idea with real customers. Once you get the MVP in front of real customers, you will quickly see if your assumptions are correct—and you can pivot if needed.

Brian David Johnson

Futurist in Residence at Arizona State University’s Center for Science and the Imagination; Fellow at Frost and Sullivan

The future is built every day by the actions of people. Ask yourself what kind of future you want and what you want to avoid. Innovation is a dangerous thing. The trick to balancing two types of innovation is to create a culture that supports both. Incremental innovation is easy. Do you have an organization that rewards grit and results, and that rigorously plans and holds each other accountable? Do you have a culture that supports stupid and crazy ideas? The crazy ideas are only crazy until someone realizes that they are genius, then disrupts an entire industry. 

Mark Randall

VP of Creativity at Adobe

Creativity and innovation are skills that are critical to businesses today, however, the fear of failure can suppress creativity. At Adobe, we’ve eliminated that fear with Kickbox, our grassroots innovation process. By investing a small amount of time and money in customer testing a large group of risky, divergent ideas, we can remove traditional obstacles and discover breakthrough opportunities that a more traditional process would have never found.

Georges Nahon

CEO at Orange Silicon Valley

We use a framework for evaluating innovations that may be organic or come about via investment. We call this framework the “3Ns”: Now, New and Next. Now is the most incremental—a more efficient way of performing an existing process or asset. New is anything more forward-looking but still tied to an existing profit and loss statement. In these two, stakeholders are easy to identify, and they are more tactical. For the next, which is radical innovation outside of business, a champion not tied to existing operations is needed, whether for organic or inorganic investments. The next is more strategic and represents nonlinear innovation.

Cait Smith

Director of Digital Strategy at PointSource

Start incorporating design principles into your organization through incremental behavioral change. Begin by encouraging employees to ask a simple question: why? The answer should help them build a problem statement, an important design tool that creates clarity of purpose. This shared view of the problem gives teams the freedom to build hypotheses on how to solve it. Encourage teams to test those ideas through small-scale experiments and then learn and adjust.

Experimentation is critical. The organization that learns the fastest also adapts and innovates the fastest. This means turning off autopilot, testing ideas and nurturing an unending appetite for learning.

Ramon Chen

CMO at Reltio

Our marketing, positioning, branding and content is structured in a way that aligns with target industries and use cases that are emerging in complex regulatory and competitive landscapes. For example, we used personalized video for the first time as an innovation, and incorporated it into our foundational marketing outreach. It was tremendously successful, but we had always planned to extend that innovation to make it self-service and on demand. Now we are taking it even further with POV personalization. This would not be achievable without a reliable data foundation and platform from which innovation can springboard.

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One of the big takeaways from 2016 seems to be that we’re still bad at understanding one another. It’s a considerable challenge for marketers, whose livelihoods depend on being able to know and influence others. The usefulness of self-reported market research stops short of a grand theory of buying behavior. Many subjects can’t explain why they responded well to a particular ad, or they can’t articulate their connection. 

For years, marketers have been turning to neuroscientists in their quest to drill deeper. Each new tool sheds insights on what actually drives consumer response. Facial coding is able to account for 9% of explanatory power, while the Electroencephalogram (EEG) reveals as much a 62% of decision making. But when , chief neuroscientist at , combined all the tools into a single measure, .

The official name of the method he developed is the Video Ad Explorer. Unofficially, he calls it the “Holy Grail of marketing”—a penetrating probe of consumers’ brains that is able to measure results with up to 77% explanatory power with in-store sales. Now, Marci talks about the significance of his research and how it could reset that ad-making process.

Q: You say you’ve found the Holy Grail of marketing. What do you mean by that?

A: There are different ways to measure non-conscious processing. EEG, biometrics, facial coding, [etc.]. Then there’s a component of self-report. How do people articulate what they like or don’t like about an ad and what they will or won’t buy? We had an opportunity here to compare all of those measures in one study that had a very strong sales outcome. 

The Holy Grail would be, which measures have value and in what combination. That was the big question that couldn’t be answered. The theory was that we were measuring different things. Therefore, if you group them all together, you would be able to capture more explanatory power of advertising creative than if you only had one or two. 

Q: How did you test that theory?

A: We looked at 60 ads across a wide variety of product categories—for instance, adult beverage, soft drinks, women’s beauty products, baby products, health and beauty and a variety of others—as they were airing and then simultaneously did testing over the course of five months. We recruited participants, and we measured EEG, biometrics, facial coding and with separate samples, self-report.

Q: Aside from self-report, are all these measurements non-conscious?

A: Yes. By non-conscious, we’re talking about measures that we don’t consciously manipulate all the time. We passively measure them. Unlike self-report (which is after you’ve seen the ad you answer a bunch of questions), we collect EEG, biometrics and facial coding as you watch the ad. So it’s not looking in the mirror, it’s the actual experience moment to moment. We then analyze the data and create metrics for every second of the ad. Then, we put all those metrics into a statistical model to see how it relates to sales. 

Q: How do you measure sales?

A: Nielsen Catalina Solutions has an approach where they take home-scanned data and combine that with set-top-box data. We have data on households exposed to the ad versus houses that are not. You then follow them into the store in a four-week window. Importantly, after the exposure, you look for the lift in the sales, in the product category and in the product itself. You control for the media spends. You control for the targeting, the size of the product and the timing. When you control for all those things, you get a fairly pure measure of the creative’s effect on sales. It’s not just how much ad spin you bought or how many channels you were on. That’s what is really exciting. 

Q: With the pure measure of creative, which creative did best? Which did poorly?

A: It’s a good question. The study question was, “What technologies did the best job of capturing a creative effect?” We’re not out there saying this type of ad does better than that type of ad. It’s much more about which methodology captures or has the most explanatory power. It turns out that the highest explanatory power came from the EEG. The second was the biometrics. Third was self-report and fourth was facial coding. In that order, and the range was as low as 9% and as high as 62%.

Q: What about eye tracking?

A: We use eye tracking for diagnostics, so we can see where people are looking. Are they looking at the brand or not? We don’t use eye tracking as a performance measure. The reason is a little bit technical but I can show you ads that are very simple, where people barely move their eyes, and ads that are more complex, and people move their eyes a lot. They can be equally engaged and have equal results in market. 

Q: How was ad reactive measured before this study? If you wanted to know or try to access the impact an ad would have or the purely creative aspects of an ad, what did you have to look at? 

A: The marketplace typically has self-report, which is still by far the most commonly used measure by itself. There are a number of companies that are adding facial coding to self-report. You might get two of the measures, but as I described, that’s probably the weakest. With the acquisition of Innerscope, we were able to combine the EEG, biometrics and facial coding into one package. That had never been done before. Nobody has the combination that Nielsen has right now. 

Q: How did you pick the ads?

A: Based on availability in market. We started the test late last year, and we were looking for big brands that we knew were going to be hitting a lot of households. The major selection criteria were: “Are you a big CPG brand?” and “Could we get the ads to test it?”

Q: You had to mount a theoretical defense for putting all these together. Why would there be opposition to that if it helps marketers better understand consumer behavior?

A: There’s a natural skepticism from clients who assume we’re going to charge more for more tools. Then, I think the research skeptics come out and say, “I get facial coding with this supplier and my self-report. Why do I need anything else?” 

Someone who expresses an emotion on their face—they smile, or they look surprised or they frown—that tells us something very important about that moment and the creative in the audience at that time. The majority of the time with video advertising, people aren’t actually expressing an emotion; they’re staring at the wall. This doesn’t mean they’re not having any emotional response. It just means they’re not expressing it on their face. We need other tools, like biometrics, to [understand] that emotional journey throughout the ad. EEG gives you more coverage of the brain. You can also get memory activation, emotional motivation and attention processing. When you think about it, you really have a nice combination of tools that, in theory, should complement each other. It turns out they actually do.

Q: How so?

A: With EEG and its broad coverage, With EEG and its broad coverage, you’re getting the most brain areas covered. We derive three different measures from that. That’s not something that facial coding captures, that’s not something that biometrics captures. It’s very unique to EEG. Memory activation is something that biometrics and facial coding can’t capture, but EEG can’t tell you if someone’s smiling or frowning; it can just tell you if they’re engaged. EEG can’t tell you if the energy level in the ad is high or low, and that’s where the biometrics come in.

Q: How much can an ad change on a second-by-second basis in the brain?

A: A lot. If you look at a 30-second ad, you can see anywhere between 10 and 15 peaks and valleys in the EEG trace, sometimes more than that. All within a 30-second ad. That’s a lot of journey going on within someone’s brain. It’s hard to imagine the granularity until you really see how these things shift. I’ve learned to respect the 30-second video ad. You’ve got sight and sound. You’ve got a story with a beginning, middle and end. You have to have relatable characters, bring people on some kind of a journey, integrate the brand product or service, make sure the brand’s prominent enough to engage their attention, their emotion, leave a memory trace and then motivate them at some future time in a story to make a purchase. That’s a lot to ask for a 30-second video.

Q: When you put all these measurements together, what do you know about how somebody is responding to an ad?

A: We’re able to 
 tell our clients whether this is an ad that has got great promise or this is an ad that needs some work. Then, because we can measure second-by-second, we can also find which areas of the ad are areas for improvement. Another thing that we do on a fairly regular basis is take that 30-second ad and help our clients turn it into a 15-second ad by taking just the most engaging parts. There’s some art as well as science to that, but we’re able to direct our clients to keep some parts, and throw others out.

Q: The results of your study showed that the integration of multiple neuroscience measures results in up to 77% explanatory power with in-store sales. Could you unpack that number?

A: That number comes from a statistical model where we’re looking at the in-store sales effects, controlling for all those variables I described (the media plan, the targeting, the size of the product). It includes inputs from the facial coding, the biometrics and the EEG. How much of the [creative effect on the consumer] does facial coding get? Between 9% and 12%, one little piece. How much does biometrics get? A bigger piece, almost a third. What does EEG alone factor? That’s the biggest chunk, upwards of 62%. Now if these tools all measured the same thing and had significant overlap, we would expect that combining them would not go above 62%. However, we actually found that putting them together brings our number up to an impressive 77%, proving the power of using all of the tools in combination.​

Q: Do you have any theories as  to what the remaining 23% could be?

A: No. It’s in the ether. As good as these technologies are, we’re not capturing every aspect of people’s mind and body. If we could add, say an FMRI—which we don’t because it’s very expensive and cumbersome—I could actually focus in on a few parts of the brain that none of these technologies capture very well. That might capture that last 23%.

Q: Why does this work? Why do non-conscious responses to ads translate into predictive consumer behavior?

A: Between 50% and 99% of brain processing is occurring without our awareness. There’s a whole lot going on in our brain that we just aren’t aware of and don’t have access to.

There’re a lot of theories and evolutionary reasons for that. We can’t possibly think about every single decision we make. It would be exhausting, and we’d be paralyzed. At the Shopper Brain Conference in Chicago, we’re hearing people talk about how [consumers] walk through retail stores. When [consumers] describe how they walk through that store, and you actually measure how they walk through that store, the two don’t look anything alike. That’s just one of many examples of how our memories and our conscious awareness of our behaviors are very limited.

People aren’t very good at explaining every aspect of their life. If you only ask people questions like, “Do you like that ad?”, “Do you remember that ad?” or “Would you buy that product?”, you’re only talking to one part of the brain: the conscious part. That might be the smallest part, so you need tools that can capture non-conscious processing. We’re not making claims that we’re capturing 100% of what’s left, but we’re capturing enough to create a powerful explanatory model.

Q: Did your results vary by product category or by target? 

A: We included all of the categories in the data, and the data set’s not quite big enough to be able to say how baby care and adult beverages perform differently. All of the advertisers think their category is special, but across these measures, so far we actually haven’t seen big differences. Engagement looks like engagement across these measures. When you look inside of categories, we have found with the biometrics you actually see more variants within categories than between.

With biometrics years ago, we looked across a couple hundred ads. We had two groups: One was entertainment, movie trailers. What could be more emotional? We compared that to financial services, banks, things like that. What could be less emotional? When you compare the two, the difference on a 100-point scale was one point. That was because there were a lot of differences within each category, so I could show you movie trailers that actually weren’t very emotional at all and financial services that got people pretty lathered up. What we see is there tends to be so much variability within a category that it washes out any potential effects between categories.

Q: Do you have any follow-up studies planned based on these results?

A: The next step is to look closer at the individual moments within the ads and to build on the data set to make it bigger and also to look within the ads to see what everybody wants to know: how do you make a great ad? That’s the work of 2017.

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Experts have said that middle market companies don’t have the same level of exposure to the global economy as the largest firms. Though that’s generally true, it doesn’t mean U.S. middle market companies operate entirely within the domestic economy. found that roughly half of all middle market organizations have an international presence, up significantly from two years ago. 

A survey of 400 C-level middle market executives found that 54% of respondents export to foreign markets while 48% import. The number of exporters is particularly notable, as it shows a 14% increase from by the National Center for the Middle Market and the Brookings Institution. Of those companies that either import or export, 58% said they do both. Overall, middle market exporters derive 33% of total revenue from international sales.

“I expected the figure for middle market exporters to be smaller, perhaps 30-40%,” says , founder and CEO of , which helped conduct the survey. “This may mean that middle market companies have diversified their markets after the Great Recession so as to spread their exposure across more markets. It may also indicate that middle market companies are using more technologies, like e-commerce, that tend to increase the odds for a company to become an exporter.”

It’s easy to see why middle market companies are looking abroad for suppliers and markets. Businesses that import say they do so to leverage the buying power of the strong American dollar and to secure raw materials and product components at lower costs than are obtainable stateside. Respondents say they sell internationally to meet demand for their products and services, to gain access to more consumers and more lucrative markets and as a guard against negatively trending economic conditions in any single country. 

These lines of thinking appear to be paying off. The research found that heavy international traders are generally the fastest-growing middle market companies. “Research over and again shows exporters outperform nonexporters across metrics: productivity, wages, skill-intensity, etc.,” Suominen says. “Best-performing companies self-select into exporting. These companies then grow even better by virtue of scaling and diversifying globally.”

The survey also found that not all regions of the globe are created equal with respect to middle market trade. The top destination for middle market goods and services is Canada, with 62% of exporters naming America’s northern neighbor as a market. Mexico was second at 39%. The main source of imports was China, with 37% of middle market importers bringing in goods from the country. Overall, the study shows the best growth opportunities are located in the Western Hemisphere, rather than in Europe or Asia.

“Many markets in the region are growing. We have free-trade agreements with many Latin American markets, and in many ways doing business for U.S. executives is easier in Latin America than it is in Asia,” Suominen says. “It is also far easier to set up elaborate supply chains within the Americas than with far-flung Asian economies. Research also tends to show companies typically internationalize by starting out in their own region, such as the NAFTA zone [for American companies] or the EU for many European companies, as they venture to learn about exporting and as a springboard to further nonregional markets. Our work corroborates that.”

Trade issues were a dominant topic of debate in the 2016 presidential election, and the incoming presidential administration has already put the nail in the coffin of one proposed agreement—the Trans Pacific Partnership—while signaling the terms of NAFTA will be under review. The end results of these strategies are impossible to predict. But the uncertainty makes analysts nervous. Revoking trade agreements might return the global economy to the period where every nation imposed tariffs on international business and granted favored-nation status to key allies. 

“Most favored national tariffs are quite low in the region, so I imagine we can do business without [free-trade agreements] as well. However, I do not see how we would ever cancel deals like NAFTA, CAFTA or U.S.-Chile, U.S.-Colombia or U.S.-Peru FTAs,” Suominen says. “Our middle market companies and their employees benefit enormously from the market access and investor protections those deals offer, as this research shows. It makes no sense for the United States to cancel these hard-won deals our companies now leverage to win new customers and streamline their operations.”

Some industries may be more susceptible to changes in global trading conditions than others. Previous research found that middle market companies are disproportionally composed of manufacturers. According to , cofounder and chairman of investment banking firm Cassel Salpeter & Co., these companies are highly dependent on market conditions existing as a result of trade agreements now in place.

“Most of the companies that manufacture in the U.S., part of their components come from abroad. It’s rare that they would be manufacturing with 100% U.S. components. The potential of broad-based tariffs will certainly affect their ability to buy components,” Cassel says. “We are a global economy. We talk about it in an abstract sense, but it’s reality.”

Cassel is suspicious of calls to renegotiate free-trade agreements, but does concede that there are areas of the status quo that can be improved for middle market organizations involved in the global economy. But, he says, it’s the enforcement of existing agreements that needs to be revisited, not the terms.

“Most people I do business with think the U.S. does have some unfair trade agreements,” he says, “[but] I think it’s the implementation of those agreements. China is not supposed to dump products on the U.S. (Look at the solar industry.) Or you’re supposed to have certain [market conditions] that are equal. But they subsidize. What Trump is trying to explain is that we need a level playing field.” 

Even if existing trade agreements are not touched, results from the National Center for the Middle Market survey show some middle market companies are leaving chips on the table. Specifically, the survey found there are several public-sector resources that are untapped by middle market businesses that would most benefit from their assistance. 

The U.S. Commercial Service maintains a regional presence through Latin America to identify potential foreign customers and partners. The U.S. Export-Import Bank and Small Business Administration are available to help secure capital for export transitions. And the District Export Councils train executives about the logistics of exporting, in addition to multiple very qualified consultants and advisors, including at local and regional chambers of commerce. 

“There are so many outstanding and affordable resources available,” Suominen says. “It takes CEO-level commitment to exporting and dedicated staff to identify and put all these resources to use.”

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In their new book, The 12 Powers of a Marketing Leader: How to Succeed by Building Customer and Company Value, researchers Thomas Barta and Patrick Barwise reveal how being a marketing leader demands different skills than a general or a CEO, based on original, large-scale quantitative research of successful marketers

Q: Your book grew out of an interesting study on marketing leadership. Talk about that study and how it produced the idea for this book.

Barta: I was a marketer for many years. Ever since I was six, my mother told me I was the only kid watching advertisements and not the movies, that something was wrong, so [I] had to find a job that fit [me]. I love marketing, but I was frustrated with the [lack of] power we had as marketers, even in the marketing organization where the finance people still called the shots.

The study came about by frustration over the lack of research on marketers’ success. There’s a lot of research on marketing, although very little on leadership. Actually, almost nothing on marketers, their careers and their impact. I said, “Let’s create it then.”

Q: What is the definition of being a marketing leader? Are these innate talents, or can they be learned? If they can be learned, how do you hone them? 

Barta: The leadership skills in [mobilizing people who don’t report to you] are the ones that make a significant difference between a marketer or a technical marketer and a marketing leader.

Barwise: If you look at leadership books, they all talk about mobilizing your subordinates. The good ones also talk about mobilizing yourself and finding inspiration. Every marketing leader has a boss, and every marketing leader has peers. Our data show that mobilizing the boss and the peers is every bit as important as mobilizing your team and yourself. When marketers say, “I’m starting to get a bit senior, I need to learn about leadership,” they go and get a generic leadership book. There are two problems with that: One is they’re less tuned to the specific issues about leading marketing compared to leading other functions. Second, in practice, they’re all about becoming a great CEO.

Q: What separates a marketing leader from a marketing follower? 

Barwise: Doing marketing isn’t the same as leading marketing. One of the things that has increased the difference has been the growing complexity of marketing, mainly because of digital. There was a time when, as a marketing leader, you were still likely the expert. If you were in consumer packaged goods, and the big thing that drove success was TV advertising, and you’d been involved in TV advertising 25 years earlier, as chief marketing officer, people could still come to you for advice.

That’s no longer true. Half of what the 25-year-olds are doing didn’t even exist when the CMO was 25. This distinction between doing marketing and leading marketing is much more important than it was in the past. We say that the 21st century is the century of marketing leadership, and the difference is simply that marketing leaders are people who are doing the things that distinguish between senior marketers with high business impacts and career success, and the majority, who have only modest business impacts and/or career success.

Q: In your book, you’ve identified 12 marketing powers that leaders have, broken down into four groupings. How do you gain these powers? 

Barwise: There are three gaps that we talk about early in the book: The trust gap because marketing is about the future; the power gap because most of the people who drive customer experience don’t report to marketing; and this increasing skills gap. There are reasons for this lack of influence. We’re providing recommendations, which are evidence-based, for things you can do about it. You do have one thing going for you: if you’re a good marketer, you’re really good at understanding other peoples’ perspective.

Q: What advice would you give to marketers in the early stages of their careers, who aren’t in executive positions yet? 

Barwise: The sooner people start thinking about these issues in their careers, the better. If you’re a graduate trainee, and you just joined the marketing department, and you’re the youngest and most junior person, no one reports to you, but you have peers and you have bosses. The sooner you get a broader sense of general marketing skills, general business issues and the fact that you’re going to have to collaborate with colleagues in marketing and colleagues outside marketing, the better. Five years later you’re going to be a team leader if you’re any good. You probably won’t have the power to choose your team if you’re 27 years old, but you will have the power to inspire them and to make sure they’re aligned on the right business issues.

Barta: We are calling for a revamp of how we train marketers. You have to lead and mobilize internally. It shouldn’t come as a surprise to you once you are older. It should be something that you are aware of from day one. It will take significant frustration away. You could think about it this way: Marketing is a hobby. What we pay you for is the difficult work to get stuff done internally, and that’s just part of your role. The sooner people learn that, the better. 

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The employees at , Leo Burnett’s in-house production studio in Chicago, look relatively relaxed. They wear jeans and decorate their work areas with bright cartoons. They can take their breaks at a Foosball table. The atmosphere is comfortable, a far cry from the highbrow Madison Avenue days of advertising. 

It’s a sign of the times. Admen and women of yesteryear spoke to their audience from on high, telling them what to do or how to think via print advertisements and television commercials. Greenhouse is quite literally more grounded, located on one of the bottom floors of the West Wacker Drive building. 

The most successful marketing videos today—like those created by brands, agencies and studios such as Greenhouse—are representative of the people making and watching them: accessible, and maybe even familiar. The nearly instantaneous videos are intended to engage with the audience, not talk at it.

“The videos that work, work because there was strategy behind them and they have a purpose” says Sarah Gitersonke, business development director for , a branded film and commercial production company. “There is a call to action or something that is leaving the viewer with a feeling. And that could be a feeling of, ‘I absolutely want to purchase whatever it is they’re talking about,’ or, ‘I feel like I connect with this.’ There are so many different ways that you can get to that point. But I think that point is what matters.”

Gitersonke says when she started in production a decade ago, a brand made a video, uploaded it to YouTube and waited to tally the “likes.” There was no real rhyme or reason to the video, she says, but now brands are sitting up and taking note of what the consumer yearns for online. They’re realizing that consumers want to see a story and feel a connection. They want to know why they should care.

For a long time, Gitersonke says, if producers were “doing content,” they were heading in the right direction. “That’s changing now.”

Just as the video medium itself can be used by amateurs and professionals alike, the agencies and brands that see the most success may be those with a flattened, flexible hierarchy. Allowing team members who are relatively low in rank to run with an idea is the sort of dexterity that can really work with videos on the web, where the audience reacts in real time and seeks a connection with the publisher or brand.

“It’s innovating deliberately, allowing creatives at all levels to be accountable and to have a say in the work and to create the work and not to be micro-managed,” says Vincent Geraghty, executive vice president and director of production for Leo Burnett USA. “Because we have such a massive amount of content to fill, we can’t just rely on the old model of having it approved through a chain before it gets out. We’ve got to be OK—[albeit] a little uncomfortable—with people at very early stages in their careers actually making work and putting it out there.”

In the case of video marketing, the gap between the brand and its audience is starting to close, maybe more than ever before. The audience expects videos that are tailored to the channel, they expect authenticity and they expect the brand to move as quickly as they do.

Making the Leap From Platform to Platform

Video marketing thrives online, particularly on social media platforms, including YouTube Facebook, Twitter and Snapchat. Marketers can no longer create a single video—such as the traditional television commercial—and expect it to perform well (or even get noticed) on each channel.

“Nowadays, to take a YouTube video and put it on Facebook doesn’t work,” says , founder of ReelSEO, now , a resource providing analysis, tips and trends for the online video and internet marketing industries. “In addition to thinking about what your story and your content is about, you also have to think about the format of the video.”

Internet users don’t view videos on different channels in the same way. For instance, multiple publishers say about â€”making captions crucial and music less so. Many people are watching these videos while on their commute, and Gitersonke says the first few seconds of a video are crucial for catching a viewer’s attention.

“You’ll have to know what formats and aspects work for each one and the lengths and time and the tone of each piece,” says Carla Marshall, editor-in-chief at Tubular Insights. “We’re still hearing marketers say, ‘Video’s not working for us.’ Well, it won’t work for you if you produce a 10-minute clip and try to upload that in as many places as possible. You’re not investing in the research to find out what your audience is going to respond to.”

 has found videos posted natively to Facebook generate more engagement than YouTube videos; however, it takes fewer views for YouTube videos to generate the same engagement rate. The research also shows the engagement rate for Facebook video is a more reliable metric, compared to view count. In terms of engagement, short-form video performs better on Facebook, versus longer video on YouTube.  from 2015 by Visible Measures says a video only has 10 seconds to catch a viewer’s attention, and 33% of viewers have been lost by the 30-second mark.  that online viewers on average watch about 54% of a typical video ad on major social platforms. The payoff for keeping a viewer engaged is critical.  says the more time viewers spend on video ads, the higher the impact on brand favorability relative to control.

Which channels a brand decides to utilize depends on their goals. David Murdico, creative director and managing partner at online video and content production agency , says that the benefits of each platform vary: YouTube is the go-to for posting because of its SEO benefits, and Snapchat wins in terms of timing and audience targeting.

Give the People What They Want: Authenticity

It isn’t, of course, as easy as hopping onto a channel and posting a video with the right length, with or without captions or inspiring music. Authenticity matters as well, Geraghty says, and young people especially will take note.

“Folks under 20, especially, will call B.S. on you pretty quickly if you’re ruining their experience online or what they’re seeing on Facebook,” Geraghty says. “If you have something that gets in the way and doesn’t really play in that space, it doesn’t work. When we’re creating things on Facebook, you don’t want to interrupt.” 

Geraghty says marketers struggled with authenticity on the now-defunct Vine. Companies were over-producing content for the video platform, which featured six-second clips from users’ cell phones. The high-quality clips from brands didn’t fit in with Vine’s homemade feel.

Brand videos need to meet consumers’ expectations for a channel. Shooting a highly produced piece of content on a smartphone can come across as inauthentic, as can a video that tries to tell the audience what to do rather than conversing with them on a social media channel. This two-way conversation began, to some extent, with comments on YouTube, and it has grown to include conversations between brands and their audience on social media videos, where consumers can choose to engage by simply “following” the brand. 

“It’s a lot more work for a brand to keep up with that two-way street, even if it’s just managing the social media platform,” Gitersonke says. “It’s important to have a two-way street. Video is a huge door to start that conversation.”

When watching videos online, viewers often have the opportunity to “skip” ads, which makes engagement and immersive experiences online crucial for brands.

“I’m in the industry, and I take any opportunity I have to skip a pre-roll ad,” Geraghty says. “I have an agenda when I’m online. I’m not a captive audience. I’m my own programmer, and I can watch whatever I want.”

What marketers are working to pinpoint is the “what I want” piece within their engagement with the audience, and the answer tends to be transparency. This could result in a change to influencer content in particular. Robertson says he doesn’t expect this type of marketing to disappear any time soon, but he does predict that audiences will expect more transparency in why influencers are promoting a product or brand.

Marshall says influencer marketing is a catch-all phrase, and the digital-first companies such as BuzzFeed have arguably become part of that culture—one that brands could be well-served by joining. As an example, Marshall points to Tastemade’s work with a variety of food brands. The video recipe publisher has incorporated branded products into its content fairly seamlessly.

“The audience belongs to those digital-first companies and not the brands; the brands are having to tap into that audience and then hopefully open the market up,” Marshall says. “Influencer marketing has a horrendous name and some brands look at it so staggeringly wrong that they’ve damaged their campaigns. But if done right, there’s a potential there to really win more customers.”

Partnering with publishers may be the first step some brands take toward becoming publishers themselves.

“The biggest opportunity I see marketers missing is the ability to become self-publishers by experimenting and creating a consistent stream of video content, rather than trying to hit it out of the park with one video here and there,” Murdico says. “I’d rather see shorter videos created at a more consistent pace, even at lower budgets if necessary, with a focus on how to get the videos in front of the right people—people in a position to buy their products and services or share the videos with the right people.”

Data-based and Reactionary Approaches

Staying conversational and engaged with the audience is time-consuming, but it also allows for real-time data collection and reaction. Producing video content based on feedback can better resonate with an audience, compared to a more programmatic approach. But what does resonance mean for ROI? How does a “like” or a comment on a video translate into sales? Often, it doesn’t.

“It used to be that you could make a video and not worry that much about the story. You put it on YouTube and it ranks in Google, you put annotation links on the video for your website and all of a sudden you’re seeing people buying stuff off your website from your organic success,” Robertson says. “I’m not saying that doesn’t still happen, but it’s certainly much harder than it used to be.”

Today the ROI for videos includes a stronger community and greater brand awareness. In fact, some channels’ formula for social success somewhat thwarts sales. YouTube’s algorithm, for example, is built on watch time, meaning the more a brand links off the channel and the more that people follow those links, the worse the video will perform.

Gitersonke, however, cautions against simply counting views to measure success. When it comes to audience participation—be it views, comments or “likes”—quality can be more important for a brand than quantity.

She says 10,000 viewers from the target audience can be more valuable than 1 million people who may never buy the product or service.

Determining a metric for success is a top concern for many video marketers. Geraghty says the future of video marketing has a tighter connection between measurement, content creation and content strategy. He says brands feel as though they’re throwing a lot of content into the world, but they can’t quite get a sense of how it’s doing or how it’s influencing sales. A good starting point, he says, is determining the proof of performance.

Brands are looking for an opportunity to quickly tell if something is working, and replace or shift the strategy if it isn’t. As Geraghty explains, marketers need to start simple. They should ask, “‘What are we trying to achieve and how are we going to gauge whether it’s performing the way we want it to?” 

Murdico says video campaigns are often launched for awareness, likes, subscribers, followers and other soft goals, but they do eventually need to positively impact the bottom line.

“By measuring video and social media analytics against sales increases, marketers are able to be more vigilant in determining what works and doesn’t work, developing better creative and focusing on promotion,” Murdico says.

Such an effort, he explains, means marketers will need to take note of current sales across all marketing initiatives for that product or service before launching a video campaign, then define the parameters of the campaign. Once the videos have run, marketers need to review the analytics to see where sales clicks and social media activity originated. Then they have to connect the dots.

What Is This Going to Cost?

Marketers have two internet powers working for and against them in video: More content is now expected of them, but the most authentic of it can be simple and (relatively) inexpensive.

Brands are pressing Leo Burnett and others to produce more for less, says Ken Gilberg, vice president and executive producer at Leo Burnett. Clients that once farmed out 100 commercials a year now want 500 pieces of content at no greater cost. And immediacy is key. “They’re not going to wait eight weeks for a commercial 
 or six months to come up with a campaign. It’s, ‘Hey, something just happened, and we need to react to it,’ ” he says.

Gitersonke argues that there’s a bit of a disconnect between what brands or agencies expect and what the final product can cost. She says everyone needs to be on the same page with expectations and where they need to make amends.

Marketers have learned to play with their budgets, shifting some broadcast allocation over to web video production. Web videos often fall under the social media resources of a company, and many companies have started moving funds in that direction as well. Marshall says a company can absolutely create one piece of video content and slice and dice it according to the platform, but expectations for unique content based on the channel and audience have caused many brands to rethink their budgets.

“When you have stats from YouTube itself that say more 18-to-34-year-olds are watching YouTube than they’re watching U.S. cable channels, then if you’re a smart marketer and that’s your target audience, you have to at least think about taking a chance and allocating some budget into reaching that audience,” Marshall says.

Geraghty says campaigns with a large amount of media and paid impressions should have a lot of money behind them, whereas more real-time content that requires less time and fewer resources should have a far smaller budget. It comes down to remaining authentic to the channel.

Over-produced content doesn’t work on some channels, Geraghty says, because it may not fit that platform’s aesthetic. Snapchat, for example, can be a great format for quick behind-the-scenes shots that feel intimate. A few seconds of highly produced content feels less natural for the platform, but can fit much more comfortably on longer-format channels such as YouTube.

Aside from the initial cost of production, Murdico predicts an increase in planning for both paid and organic distribution and promotion.

“Marketers are realizing that counting on videos being shared with no plan to make that happen isn’t working” Murdico says. Instead, he predicts they’ll focus on distribution or promotion plans that get the videos in front of the right people. These tactics involve paid promotion on social media sites, paid influencers, increased use of their own social media communities, e-mail lists and more investment in media outreach to get videos placed on high-profile and niche blogs and publications to reach new audiences.

The Future Is Here, and It’s Live

Video on the web is moving so quickly that some of the most popular content is being filmed and broadcast live. This mostly unscripted content is uncharted territory for most companies, but it lends itself incredibly well to the authentic voice consumers seek.

One of the easiest places for brands to begin with live video, which has been popularized on Facebook and is being integrated on Instagram and Twitter as well, is major events. Think of Apple releasing a new product or GM featuring new vehicles at a car show.

Geraghty says more of Leo Burnett’s clients are asking for live video, and it can be an impactful medium. Greenhouse produced a live video for McDonald’s during National Burger Month, during which an artist used condiments to paint pictures of McDonald’s hamburgers. In an entirely different approach, Greenhouse created a “live” animated video for Kellogg’s that featured a Keebler elf giving a tour of the cookie factory.

“Having the live video be a more authentic and spontaneous type of event, as opposed to reading from a script, is really important,” Robertson says. “It’s also a great place to play for brands that have a smaller budget. There’s a lower barrier to entry with live video.”

In addition to live video, some brands are even experimenting with virtual reality. While it’s currently out of reach for a great number of marketers, largely due to cost, the trend could explode sooner than later. Look no further than Google, PlayStation or The New York Times’ interest in the space. Geraghty says his young daughter spent about an hour in a virtual reality experience offered by the Times, roaming the family home as if on the streets of Paris.

Live video and virtual reality may be the apex of where the audience and the brand come together, sharing immersive experiences that strike at the heart of what consumers have come to expect from companies. To reference one viral Kleenex video featuring a dog and his adopter, brands and consumers are possibly becoming “unlikely friends.”

“It’s really not about one-way communication anymore, with, perhaps, the exception of paid advertising,” Robertson says. “It’s about having a conversation.” 

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Among the major challenges marketers face in the year ahead will be creating and retaining brand loyalty. It is a challenge because of the difficulty of brand building in an era with fast-changing media, much under audience control, and because e-commerce and digital communication make it difficult to integrate messages and deliver on-brand customer experiences.

How do you create, manage and leverage a loyal customer base in this environment? To empirically address that question we leveraged the database associated with Prophet’s Relentless Relevance 2015 study in which 400 brands from 29 categories were assessed on more than 20 measures of brand relevance. The goal was to determine what drives two loyalty levels: the satisfied and the committed.

The satisfied are those who buy regularly, often out of habit, because they are satisfied with the brand’s performance over a long time period. They perceive the brand to be familiar, dependable with consistently good experiences and easy to buy. The brand has become a comfortable habit and there is no reason to change. For some low-involvement products, the satisfied are the core of the brand loyal group.

The committed have a more intense, involved relationship to the brand. They are more likely to have an emotional attachment, to receive self-expressive benefits and to have a use experience that goes beyond merely functional benefits. They are also more likely to be brand supporters, even telling others about the brand and its use experience. For some high-involvement products, a brand should aspire to have a committed group.

How do these groups differ with respect to what drives their formation and nurtures them over time? From the Prophet study, indicators of the two loyalty types and five potential drivers of loyalty were identified. The extent to which each of these five indicators impacted (explained variation in) the two levels of loyalty were explored statistically.

The “satisfied” group was represented by the phrase, “one of my favorite brands,” which reflects satisfaction and a lack of motivation to change to another brand. The “committed” group was represented by the phrase, “I can’t imagine living without,” which suggests there is a functional or emotional attachment that is so intense that the absence of the brand would be upsetting.

There are five variables that have been uncovered to be potential drivers of brand loyalty; several have multiple indicators that are combined. These variables are:

• Dependable: described as “always deliver to expectations,” “I can depend on,” “I trust” and “consistent experiences”
• Better: described as “better than others,” and “only brand that does what it does”
• Social media: described as “has interesting and engaging content online”
• Light emotional connection (LEC): described as “makes me happy”
• Heavy emotional connection (HEC): described as “connects with me emotionally,” “makes me feel inspired” and “has a purpose I believe in”

Consider the satisfied model. The “dependable” variable has more than three and a half times the explanatory impact as does the “better” variable. This confirms the hypothesis that satisfied loyalists are driven by habit, familiarity, comfort and satisfaction, and being better is not as important as delivering the brand promise. They are instead going to stick to the brand as long as it delivers. Controlling for “dependable” and “better” (perceived superiority), the “light emotional connection” variable has a meaningful role, about equal to that of the “better” variable, while the “heavy emotional connection” variable has zero impact. Finally, the “social media” variable, as expected, was not a driver, essentially zero.

The satisfied group included brands that do not engender much passion or emotional connection. Of the top 50 brands of thedatabase, 15 were classic brand names that largely delivered functional benefits and were extremely high on the dependability measure. Leading the way with positions in the top 25 were Betty Crocker, Band-Aid, Clorox, KitchenAid and Folgers. All were extremely high on the “dependable” and trust dimensions as well. That reinforces the hypothesis that delivering to expectations may not be glamorous, but it can drive a brand’s ability to create and keep a loyal segment, which can be the basis of a healthy long-term business based around brand loyalty. There’s also likely some emotional benefit linked to the nostalgia of growing up with these brands. They become part of the fabric of people’s lives.

Next consider the committed model. The “better” variable has a large impact, about equal to that of the “dependable” variable. The “heavy emotional connection” variable has an explanatory power equal to the “better” variable and more than twice that of the “light emotional connection” variable.  Finally, the “social media” variable is now more of a player, albeit smaller than the other variables. 

The committed customer group is necessary if you want to be a leader in more involving categories. This is the group that can deliver social buzz and net promoter scores. And it can defend you when you have an unfavorable incident. But to create and nurture this group, it is clear that brands must get beyond “dependable” to “better” and get beyond happy to deliver a meaningful emotional feeling that connects and inspires. The top brands on the committed scale such as Apple, Microsoft, Netflix and Chick-fil-A, also score high on the emotional connection, inspiring and having a purpose. Apple, in fact, is in the top two on each of these dimensions. They are clearly more than functional, high-use brands that deliver satisfaction. Social media also became relevant. The committed will likely include people that are influencers on social media, and they have an impact far beyond their number.

The strength of the “dependable” dimension to explain the committed status of a brand is noteworthy. Many of the top brands on the committed scale such as Apple, Netflix and Microsoft ranked extremely high on dependability and ease of use. Amazon, added to the study in 2016, was also extremely high in the committed and dependability measures. The ability of these high-tech, innovative brands to deliver an astonishing level of performance on the dependability dimensions is a crucial and largely unrecognized element of their brand strength. In general, they deliver on their brand promise without frustration or disappointment.

Patrick Barwise and Sean Meehan argue in their book, Simply Better, that success is determined by simply delivering basic category benefits better than others. Even for complex products or in high-tech settings, it is not just about strategy and innovation, it is about execution, consistently making customers satisfied.  

Loyalty is not a simple concept; it has levels. How to develop and leverage a loyalty asset very much depends on whether you are after the satisfied or committed group or both, but in either case, the brand does need to deliver the basics.

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“We help startups and other businesses refine, design and launch their digital products. One of our mantras is ‘simplify even more.’ That shows in our office design where we remove redundant elements while maintaining a warm place to get creative work done.

“Most design studios go for an industrial look with a lot of unpolished wood. We’ve always aimed for a white and clean design theme. Our office lets us focus on what’s important: translating creativity into usable and beautiful user interfaces.”

– Leon EphraĂŻm, founder and designer at Yummygum

Open Workspace Environmentï»ż

Yummygum Meeting Room

Lunch Room Area

Work & Play in Foosball Table Area

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Companies rely on dashboards to improve customer value—about 40% of the large U.S.-U.K. companies efforts to build and use a dashboard. In some ways, dashboards are an evolution from the earlier practices of using control charts, scorecards, tracking studies and metrics-based snapshots. Fueled by advances in data analytics and visualization, marketing dashboards are becoming integral components of a company’s .

There are to using a dashboard:

• A dashboard visually displays a consistent set of metrics that can be monitored at a given point in time (cross-sectional) and over time (longitudinal).
• This enables management to communicate trends in inputs, processes and outcomes with key stakeholders.
• A dashboard may also be used for planning purposes; key metrics that are part of the dashboard can represent goals to be achieved.
• Management can develop plans around measurable goals and further use a dashboard to monitor progress.

Don’t let dashboards make decisions tactical and reactive.

Many marketing dashboards capture an increasingly smaller slice of time, space and experience. Annual tracking of customer satisfaction became quarterly, then weekly and has become daily, even hourly, in some firms.

This all sounds great. Presumably, armed with more information, more data, more visibility into the customer experience, marketers can make better decisions, become more strategic and provide a competitive edge. The risk is that managers who are using detailed and elaborate dashboards may make suboptimal decisions due to.

More importantly, the smaller slices of information that populate dashboards can make them more susceptible to outliers. Compared to yearly data, daily data—within a single retail outlet, based on a few customers—can be quite volatile. One or two customers—ecstatic or irate—can spike the daily average for an outlet. Focusing on these spikes can make managers reactive.

To avoid the “more is better” trap, step back and carefully delineate the role a dashboard should play in marketing decisions. A useful dashboard can help set goals, monitor performance, provide implementation metrics and help to provide strategic insights. How often do you need it and at what level? Answer these questions before you decide on the frequency and granularity of data used in your dashboard.

Don’t let dashboards mask strategic trends.

Dashboards that focus only on cross-sectional information can mislead. The cross-sectional information in a dial should be supplemented with long-term longitudinal trends to provide a strategic overview. Good dashboards should also display longitudinal trends relative to a  (industry average, select competitors and aspirational firms outside your industry). From 2010 to 2013, the administration at a business school in Texas continuously showed a dashboard with increasing average salary of its MBA students as a KPI. Without a control group, no definitive conclusions could be drawn. Was the increase higher or lower than the increase experienced by other MBA programs in Texas? Was it higher or lower than the salary growth in the Texas region?

Don’t let dashboards focus on analytics at the expense of insights.

Due to their emphasis on quantifiable information, dashboards can push users to focus on analytics—trend lines, bar graphs, pie charts and dials. Is a metric increasing or decreasing, and by how much? How did an opinion or an attitude change since the last period? What percent of people engaged in a specific behavior? How does one subgroup compare to another on key survey items?

Answers to these questions may seem important but are not necessarily insightful. At worst, a focus on answering these types of questions can be utterly misleading. Recall the “dashboard mentality” exhibited by many in the media during the 2016 presidential election. Focused on analyzing the results of day-to-day polls, many in the media failed to gain insights. Every little change in day-to-day polls was overanalyzed. The media gurus became analysts—focused on analyzing one variable at a time: What percentage will vote for the Republican or Democrat candidate? Which issue is more important to which subgroup? Wading deep into analytics, they were unable to provide insights.

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What is an insight, and from where does it originate? A practical way to answer this question is to distinguish between the what, why and how of a phenomenon. The “what” pertains to analytics, while the “why” and “how” provide insight.

What is the state of affairs? This can be answered using univariate data analysis—analyzing one variable at a time and comparing it among different subgroups: What percent of people say something? What is the level of agreement, satisfaction or intent based on some survey or behavioral metric? Dashboards adeptly answer “what” questions by displaying dials, trend lines, bar charts and pie charts.

Why is the state of affairs occurring? Why are the people saying something? Why is the level of agreement, satisfaction or intent relatively low or high? To answer these questions, you have to conduct â€”in-depth interviews and prolonged observations—with your customers, coupled with multivariate analysis to understand how multiple variables are related to one another. In most cases, it is a combination of multivariate analysis and in-depth  that provides the insight—answering the “why” behind the “what.”

How can the state of affairs be influenced? A clear understanding of the “why” helps influence key processes that change future outcomes. A focus on how—by design—is forward-looking and requires an attention to detail to understand the drivers of the desired outcome and an understanding of the process. Companies that can supplement their dashboard with a process to answer the “how” create an enduring and unique . Doing this requires employee engagement through discussion forums.

Don’t let dashboards become an end, make them a means to facilitate discussion.

Dashboards, in a rudimentary form, were introduced in the early 1950s by W. Edwards Deming, Joseph M. Juran, and Walter A. Shewhart within the context of total quality management (TQM). TQM used complex statistical tools and  to generate data that were summarized and visually presented to front-line employees in the form of quality control charts.

The genius of the approach was not in visual analytics. It centered on using visual analytics to generate insights. TQM did that by embedding the analytics in discussion forums such as . After presenting the dashboard analytics, discussion forums encouraged employees at all levels to elaborate upon the information. The insights generated helped address decision making, enhance manufacturing processes, frame the goal-setting process and develop incentives.

Frequently, it was not the metrics, but the discussions facilitated by the metrics, that led to quality improvement suggestions by employees. Dashboard analytics are important, but insights based on a discussion of the analytics are paramount.

Dashboards replete with numbers will not provide insights. To gain insights, embed the dashboard metrics within forums that facilitate discussions, generate ideas and motivate employees to more systematically use the “what” to move into the realm of “why,” and “how.” Do this at all levels frequently, and consider involving a core group of other stakeholders—customers, suppliers and investors—to broaden the pool of insights.

An exclusive reliance on marketing dashboards can be counterproductive for strategic thinking and decision making. To get the most out of your dashboard, use them as facilitators of discussions that yield insights. Keeping the dashboard simple, graphical and forward-looking will help the discussion. Provide a decision support system that can bridge the journey from analytics (what) to insights (why, how). Only by making your dashboard a vital part of a broader decision support system can you extract the most value from it. 

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