In the rapidly evolving world of marketing and advertising, artificial intelligence is no longer a futuristic concept – it’s the engine powering transformation across the industry. Few understand this better than Nick Waters, CEO of AI and data consulting firm Making Science UK.
Having served as CEO of Dentsu’s Asia Pacific branch and WPP owned Mindshare, Waters charts the future of an industry in the midst of reinvention.
How is AI being used in end results for clients?
On the external side, all of our products are built from the ground up and are now all AI-backed, or AI-powered. Our product operates under the brand name ‘RAISING’ and has three categories: AdMachina, Gauss AI, and Trust Generative AI.
AdMachina is for enhancing search or performance campaigns. At its core is hyper-personalisation at scale, ensuring that the message is tailored to the users. It’s real-time creative optimisation. We have an image analyser which evaluates visuals and automatically updates the answer with the most effective combinations.
Gauss comprises several components, but at its heart it is predictive modelling for future lifetime value of potential customers, which then feeds into variable price bidding strategies. It also has real-time measurement optimisation and budget allocation capabilities.
The third product, Trust Generative AI, involves the production of content based on a company’s own data, rather than at open source information. It uses that data to produce content at scale, whether it be from websites, blogs, emails.
The three categories the product is divided into are essentially hyper-personalised creativity at scale, measurement and optimisation of business solutions, and mass generation of content.
How do you think AI will impact marketing and advertising?
It is difficult to forecast, but I imagine the growth of AI will be similar to the advent of the internet, where nobody had an idea of how it would play out. I think AI applications will develop at the same speed as things like Google and Facebook, if not, much quicker. So in five years time, we will likely be wrong about whatever predictions we make now.
I don’t think there’s any aspect of marketing services that won’t be disrupted by AI – from the ideation phase of creative ideas, to the production of creative materials, to budget allocation, channel selection, media buying, optimisation and measurement. I think it is all going to be done by AI, with some human intervention.
How will AI disrupt the major holding companies?
AI is an existential threat to agency holding companies. The next generation of agencies coming up have an opportunity to take a lot of their customer base. WPP and Dentsu aren’t doing well in terms of their market cap, Publicis is doing better but they are carrying a lot of legacy businesses that need some re-inventing. The strategy behind Omnicom and IPG merging is due to cost savings, enabling Omnicom to expand in America, and get access to Acxiom, IPG’s huge data asset.
Ad money will flow to the next generation of agencies, there’s a huge market opportunity there for agencies who can provide brands with that competitive edge using AI.
Where will the biggest disruption be?
If a client is paying a million dollars for an agency to maintain 15 employees, but there’s now only 2 people because of AI, the client isn’t going to be paying that amount. The agency economic model has to fundamentally change. For marketers, if they can harness AI well, it will give them a significant competitive advantage. Marketers that adopt it will figure out how to enhance their business and brands quickly. Then the third party that will be impacted is consumers – people who receive our marketing messages – and I hope they will be impacted in a positive way. I think all of us as consumers will take the opinion that we get advertised in a way we find irritating – we have a part to play in mitigating consumers feeling they are stalked by brands.
How does AI reshape the way brands understand and engage with consumers?
It starts all starts with the consumer – all brands are trying to sell something to people. That includes considering a company’s strategy, who they want to sell to, and who they are developing products for. Then it’s about identifying the location of those people through advanced data techniques. While first party data is critically important, it is also important to know what other data is out there and what you can do with it – such as identifying behavioural attributes or identifying high value customers. There’s no great advantage to having access to data without using it properly.
After understanding the data, then strategies can be developed around it. That would be creative ideation and then creative execution. Then companies consider how AI can be harnessed efficiently and effectively with their budget.
The objectives of marketing haven’t changed – it is still about brand owners selling things to people. It is just that now, the way it is done has revolutionised – both in process, people, and organisational structure. Our industry has a bad habit of making things more complicated than it needs to be – including talking in jargon – I think clients will benefit from clarity of thought and mind. We’ve been on a path to narrowing our understanding of consumers, but the same premise exists – to understand consumers.
Are there any dangers to AI hyper-personalisation?
I think people are irritated about being stalked across the internet, because there is no limit like there was with things like TV advertising. Perhaps AI can help with that frequency capping of advertisements on the internet. Maybe there could be AI agents which can make sure consumers don’t see the same ad 35 times.
Perhaps there is a danger and a risk with the power held by big tech companies. I think all fast-developing industry regulators struggle to be effective, and I don’t think regulators know what to do with AI. Some say that it’s not the technology that is dangerous, but the people – I’m not convinced by that argument.
Data and consumer privacy are necessary. We already have a good regulatory framework for them which lagged behind GDPR technologies from 2017-2018. That framework will survive the AI revolution. It’s definitely something to stay on top of.
