Facebook scandal highlights need for ethically-driven data value exchange which with AI and the imminent GDPR, represent opportunities for building better customer relationships.
Results of BrightEdge survey with top 3 marketing trends relating to AI
Facebook scandal highlights opportunities
The Facebook-Cambridge Analytica scandal came at a time when GDPR was already putting consumer data under the spotlight; creating an almost perfect consumer data storm that will see companies evaluate and improve their use of consumer data. Post-GDPR will be about consumer control of their data and as a result the need to provide a fair value exchange in return for that data; whether that’s monetary or seamless personalisation of their customer experience.
Facebook’s initial reactions were to remove 3rd party data for targeting on Facebook; an overhaul of its privacy settings to make it easier for users to find & change them; and rewritten terms of service and data use policies. Whilst Zuckerberg claimed an oppenness to GDPR-like privacy terms – something which US lawmakers are considering i.e. Customer Online Notification for Stopping Edge-provider Network Transgressions (CONSENT Act) – ultimately Facebook plan to exclude 1.5bn users from new privacy protections i.e. those outside of the EU. These moves could play into the hands of the likes of Oath as Yahoo’s reach in a number of countries including the UK combined with its brand safe environment make it a viable alternative to Facebook
Amidst their data privacy criticisms Facebook still managed to grow its DAUs in Q1 and record strong revenue growth.
The Contenders: Oath, Amazon and Snap
Oath’s potential in breaking up the duopoly is growing with recent announcements of Yahoo’s aims to displace social media as a home for news by using its parent’s and own reach as well as extending its reach through partners. One of those partners was announced at the start of May as Oath announced a tie-up with Samsung that will see a number of Oath and Yahoo apps pre-installed on Samsung Galaxy smartphones to enable advertisers to reach those audiences via native ad units specifically designed for mobile viewership through its Yahoo Gemini offering.
A number of others are carving out their own place in the market. Amazon’s ad business topped $2bn in Q1 – up 132% YoY – whilst Amazon’s use of native ads is really paying off with over one-quarter of shoppers finding them useful and 65% not noticing them as ads.
Snap is another budding contender, offering something much different. For instance; this month saw Snapchat begin rolling out Shoppable AR – a feature to enable advertisers to sell goods/app downloads through sponsored lenses. Snap also poached Facebook’s UK director of agency partnerships Ed Couchman, to serve as its UK GM and build Snap’s agency relations.
AI drives relevancy but transparency remains key
A number of recent studies have revealed not only a rise in perceived relevancy – particularly from younger audiences – but also that relevancy increases engagement rates with Verve finding 38% of UK adults were likely to interact with a mobile ad that referenced their interests – double the likelihood of engagement of a generic ad. Much of this relevancy is driven by leveraging data and artificial intelligence to enable a truly customer-centric strategy that gives the customer a better experience, whilst brands get higher CTRs and revenue.
“…personalization can go a long way to building solid customer relationships…and being transparent about how customer data is used and managed, relationships can be built one customer at a time, at scale.” Graham Morley, Head of Product @ Clicksco, The One-to-One Future is here
This AI-driven digital transformation needs new technologies, new structures and a new mindset in relation to the customer; and whilst we’re building the tech, the latter 2 of those conditions need attention. The recent announcement that the UK government will invest £300m in AI research follows its £75m injection into AI as part of the Autumn Budget; but how that money is spent will shape the success of the UK’s AI ambitions. For instance; £9m of the latest funding will go towards a new Centre For Data Ethics & Innovation, whilst The House of Lords Select Committee on Artificial Intelligence suggested that an “AI code” be produced to cover basic principles of AI tech. Our own Al Mclean also shared his views on being Ethical By Design.
Other reads, stats and opportunities
- AI in Audio ads. Its thought that AI-driven data can help the music ecosystem maximise profits whilst providing relevant engagement to customers/fans. Whilst AI is already used in services such as Spotify to make recommendations, measure certain metricss, etc, there’s much more to come including marketing automation tools that could for instance, identify superfans most likely to spend more money. According to Digiday; ad buyers expect Spotify to focus on ad operations following their IPO to give it fallback revenue, despite the fact that approx 45% of its users are paid subscribers.
- In the UK pension withdrawels hit £1.7bn in Q1 with the spending power of the at-retirement market continuing to be an area of interest for marketers.
- UK publishers saw 5.6% digital revenue growth in 2017 fuelled primarily by 27% growth in display advertising, though new channels may be ahead. One popular channel is Native i.e. Native will make up 60% of US display this year.