Rocket fuel for advertising – the future is Artificial Intellgence

wargames - AI in action and a little less powerfu than Rocket Fuel
wargames – AI in action and a little less powerfu than Rocket Fuel

Advertising was never a very exact science, we all knew that 50% of our spend was wasted (but famously didn’t know which 50%), but that’s all changed now and changed forever.

I was lucky enough to be in a presentation from Lucy Arkwright of Rocket Fuel, who’s strapline is a rather cool ‘Artificial intelligence. Real results’. I haven’t seen a more amazing presentation in some time.

In short, what Rocket Fuel do is use single pixels on page to track a users real traffic. Then, using Artificial Intelligence (ie learned behaviour) they build up a picture of your real internet usage and shopping habits. It’s far more than just clicking likes, it’s about behaviours and real moves to action. So, less of what you say you’ll do and all about what you actually do.

As an example, with a traditional ad for a dishwasher, the agency buyer would just buy space in a magazine and hope enough people looking to buy their dishwasher wandered past and happened to want one at that point in time.

This was largely replaced by behavioural retargeting of ads (those ones that follow you around on the internet) which repeatedly show you dishwasher ads if you have ever clicked through to a site selling dishwashers or large kitchen appliances.

What the Rocket fuel system does is understand your specific behaviour. It begins to learn what brands you are most likely to buy and when you are really in the market to buy them. It knows to stop serving you ads when you have seen it more than a given number of times (your personal preferred number and not the rest of the worlds) and then stop serving you ads if you have actually bought a dishwasher from anywhere online. It’s like the Perfect Market, but all the sellers now have all the information. It’s a perfect, perfect market.

The AI bit is the really clever technology. This learned behaviour is done through a billion decisions per second that the system makes about how you like to think, shop and browse online. And this doesn’t just change the game a bit, it changes it completely.

I’ll leave you with a stat to prove the point.

The average click through rate (CTR) on a conventional online display ad is 0.03%, so all in all, pretty wasteful. and clicks aren’t anywhere near as good as actual conversions.

In one of the Rocket fuel examples, they showed that 40 percent of purchases of new BMWs in North America in the second quarter of 2012 were influenced by Rocket Fuel advertisements.

None of us had actually noticed that it wasn’t 50% of our ad spend being wasted, it was 99.97% being wasted. And it’s now with this system it’s back to being closer to 50% again.

When this technology rolls down to smaller users, it will change the way advertising is bought and sold completely. And forever.

Wow, just wow.

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Online advertising overtakes TV – but brands will suffer if they ignore it

It was announced on the BBC (so it must be right then!) that spending on online advertising in the UK has overtaken the spend on TV advertising for the first time. It came from a report prepared by Pricewaterhouse Coopers for the Internet Advertising Bureau.

Online spending grew 4.6% to £1.752bn – which doesn’t sound that large a growth in what is such a young and explosive market – whilst TV advertising fell by a rather more substantial 16.1% to £1.639bn.

This is great isn’t it?

All clients are becoming much more savvy and spending their money where they can get a measurable return and not throwing any of their hard kept budget at more general profile raising ads.

I think this is not great, not great at all, as brands will suffer in the long term for doing so.

Brilliant virals change perceptions, we all know that, but brilliant TV advertising changes generations. It just has a far greater impact than another click through to a website by someone bored in their office on a quiet Friday.

Internet advertising must be part of any advertising mix that’s obvious, but so must profile raising clever TV ads, if you want to create and maintain a world brand.

When Nick Kamen stepped out of his pants in a launderette ad for Levis, he literally rebuilt their brand from that day forward. He gave them ‘cool’ and they have worked hard ever since to keep it.

I can think of thousands of transformational TV ads, but Virals, with very few exceptions are often just a gag that wears thin all too fast. Its the creatives having a hoot and winning awards. But is it really winning them customers or just massive click through rates? When Chris Tarrant, presents them on late night TV, how much good is that really doing for the brand?

And the best bit?

The irony that it was PwC reporting the demise of TV ads.

PwC were the people who were laughed at through massive viral campaign of changing their name to ‘Introducing Monday’ in 2002 by the hilarious viral geniuses at B3ta. If you don’t remember that, have look here and here.

Pw C - We've got your name and you are a donkey
PwC - We've got your name and you are a donkey

It was the viral that created virals, but its brilliance was in its irreverence, not in its conformity.

If I owned a consumer brand, I’d be sticking by TV for a long time yet.