Mobile Marketing September 2018 Edition by Mobile Marketing Magazine

ISSUE 30 SEPT 2018

| NEWS | VIEWS | ANALYSIS

AD TECH DEBUNKED

WeQ’s Markus Malti and Dr Steffen Wachenfeld on the tech and trends that deserve the hype, and those that don’t

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SEPTEMBER 2018

CONTENTS

REGAINING TRUST The IAB’s Jon Mew looks back on a challenging year for the digital advertising industry

06 AFTER THE STORM What does the future look like for digital advertising now that GDPR is in force? Hello and welcome to the latest print edition of Mobile Marketing. As this edition hits the streets, we are just under four months into the GDPR regime, so on p6, Tim Maytom takes a look at the future of digital advertising in the post-GDPR era. Artificial intelligence comes under the spotlight on p32, as Tyrone Stewart explores how forward-thinking brands are attempting to leverage AI in their marketing. And on p26, Tyrone looks at the evolution of influencer marketing, seeking the thoughts of industry experts on where it’s headed, and the issues it needs to overcome. For this issue, I spoke to German consumer electronic retailer MediaMarktSaturn about its trailblazing approach to digital innovation, embracing augmented reality, virtual reality and even in-store robots. That’s on p12.

GROWING PAINS

Influencer marketing is growing up and growing in popularity, but it’s experiencing some growing pains along the way, as Tyrone Stewart reports

32 THE BUSINESS OF AI It’s overhyped and definitely over here, but is AI a force for good or evil? Tyrone Stewart investigates

EVANGELISING DIGITAL After a slow start, German consumer electronics retailer MediaMarktSaturn is blazing a trail in digital innovation. David Murphy talks to the firm’s chief innovation officer, Martin Wild, to find out more

Enjoy the issue!

If you want to be sure of receiving your copy of the print edition of Mobile Marketing three times a year, you can subscribe today to go on our controlled circulation list. It costs just £30 (UK) or £40 (rest of the world). To take out a subscription, just send an email to subscriptions@ mobilemarketingmagazine.com and we’ll tell you what you need to do.

Leanplum’s Joyce Solano on putting the human element back into B2B marketing

CELEBRATE THE POSITIVES James Brown, MD EMEA at Rubicon Project, says the digital marketing industry has a lot to be proud of

CLOSING THE LOOP ON AD MEASUREMENT Research Now SSI’s Chris Dubreuil discusses the company’s recent acquisition of DMA-Institute

DEBUNKING AD TECH MYTHS

Markus Malti, CEO and Dr Steffen Wachenfeld, CPO of WeQ, look at some of the myths around ad tech, offering their views on the technologies and trends that deserve the hype – and those that don’t

David Murphy, Editorial Director

THE PERSONAL TOUCH

In our cover interview on p20, we talk to Markus Malti and Dr Steffen Wachenfeld of WeQ, to find out which ad tech trends should be on your radar. And to kick things off on p5, IAB CEO Jon Mew looks back at a challenging year for digital advertising, and at what the industry is doing to regain the trust of the consumer.

42 UX MEANS YOU WIN Scott Smith, chief revenue officer at CloudApp, looks at the art of great UX

Editorial director: David Murphy – david.murphy@mobilemarketingmagazine.com +44 (0)7976 927062 Managing director: John Owen – john.owen@mobilemarketingmagazine.com +44 (0)7769 674824 Commercial director: James McGowan – james.mcgowan@mobilemarketingmagazine.com News and social editor: Tim Maytom – tim.maytom@mobilemarketingmagazine.com Reporter: Tyrone Stewart – tyrone.stewart@mobilemarketingmagazine.com Marketing manager: Trish Pencarska – trish@mobilemarketingmagazine.com Design: Konstruct Studios Ltd – info@wearekonstruct.co.uk Contributors: Jon Mew and Scott Smith Photo credits: Cover and pp26–29: Anna Wasilewski Print: Monster Media Management – info@monstermanagement.co.uk Mobile Marketing is published by Masterclassing Ltd., 57–61 Charterhouse Street, London, EC1M 6HA www.mobilemarketingmagazine.com

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SEPTEMBER 2018

REGAINING TRUST

Jon Mew, CEO of IAB UK, looks back on a challenging year for digital advertising

t feels inevitable that 2018 is remembered in advertising circles as a year of change. In particular, with GDPR coming into force on 25 May, how the industry acquires, processes and monetises consumer data came under the spotlight. We don’t need to dwell on the tabloid headlines that have plagued our industry this year. Needless to say, at the IAB we take these challenges seriously. One of our three guiding principles is to tackle and address the big issues. It is vital that the advertising industry regains the trust of consumers. To do so, everyone within the value chain must act in a responsible manner.

GOLD STANDARD Our commitment to this goal is embodied in the IAB UK Gold Standard, which was launched at our Engage conference in October 2017 – less than 12 months ago. In that time, we have managed to secure broad industry support for the initiative, across all parts of the value chain. The Gold Standard has three simple but fundamental aims: to reduce ad fraud, increase brand safety and improve the digital advertising experience. To achieve these, companies who register and are certified commit to: • Reducing ad fraud through the implementation of the ads.txt initiative. This initiative from IAB TechLab shows who is authorised to sell a specific site’s inventory and prevents the selling of spoofed or fake inventory.

the Coalition for Better Ads standards, and expecting their buy-side partners to include ads.txt traffic selection in their platforms. Because of these demands, the supply side is responding accordingly. It should also be noted that the sell side is more accustomed to completing technical audits and the subsequent engineering development required, particularly with regard to JICWEBS and DTSG. This requirement was previously on media owners and ad tech partners to implement, and agencies and brands to enforce. This is no longer the case. Whilst accreditation is designed to be as simple to implement as possible, the process still requires internal resources and time. But this is still only part of the story. Whilst there are currently three fully certified media agencies– including two major networks, GroupM and Publicis Media – there are a further seven that are registered and in the process of completing the accreditation. These have all been vocal supporters of the Gold Standard aims since its launch.

COPYRIGHTED CONTENT Outside of the Gold Standard, the IAB recently signed the ‘Memorandum of Understanding (MoU) on online advertising and intellectual property rights’, facilitated by the European Commission, to demonstrate our commitment to helping ensure that ads aren’t placed on pirate sites hosting copyrighted content.

• Increasing brand safety by working with JICWEBS to ensure that the Display Trading Standards Group (DTSG) Brand Safety Principles are valuable, applicable and continue to evolve with market expectations.

The MoU brings together advertisers, advertising intermediaries, technology providers and trade bodies to help stem the flow of advertising budgets to sites and apps that provide illegal access to music, films, games, live sports and other copyrighted content.

• Adhering to the LEAN principles and the standards set by the Coalition for Better Ads, and never using the 12 bad ad formats that offer people a poor digital advertising experience in desktop web or mobile web environments.

It’s important that as an industry we clearly demonstrate to governments and regulators that we are acting responsibly and that co-ordinated self-regulation, through these kind of initiatives, is the most effective way to address the challenges we face.

At the time of writing, 50 companies have been fully certified and a further 40 have registered for accreditation. There have been some suggestions that this initiative has been more heavily supported by the sell side – media owners, publishers and tech vendors who supply the advertising inventory to brands and media agencies. However, the buy side is playing a key role by mandating DTSG accreditation, only purchasing ads that adhere to

We are proud of what we’ve achieved so far but know there is more to be done. We are pleased that every part of the digital advertising ecosystem has responded positively to our goals and, in particular, for their support of the IAB Gold Standard. However, it is only by continuing to work together, in a positive and constructive manner, that we will all achieve our aims and build a sustainable future for digital advertising.

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JUNE 2018

AFTER THE STORM Following months of anticipation and preparation, GDPR is now in force across Europe, and its impact is being felt globally. Marketers, publishers and tech firms have all raced to ensure they meet the legislation’s strict guidelines, but now the deadline has come and gone, what is the real impact of GDPR? Tim Maytom attempts to find out

ver since it was adopted by the European Union way back on 14 April 2016, the General Data Protection Regulation (or GDPR to use its snappier acronym) has been hovering over the head of the marketing world, moving inexorably closer like the asteroid that wiped out the dinosaurs. Some said that it could spell the end of digital marketing as we knew it, while others claimed that barely anything would change. On 25 May 2018, the legislation came into force, and almost four months later, it’s still not entirely clear who was right.

A LEGAL CHALLENGE As the May deadline grew closer, ad tech operations the world over scrambled into action, and in the weeks leading up to the cutoff date, consumers’ email inboxes began to overflow with emails begging them to remain on marketing lists. Databases were cleansed of old contacts, personal information of dubious provenance was purged from CRM systems, and landing pages were redesigned to comply with the new directives. While there were plenty

of technical challenges to contend with in the build-up to GDPR coming into force, the primary challenge for marketers was initially a legal one. “It took many months to study the issue and prepare for GDPR,” says Gil Becker, CEO of video brand safety solution AnyClip. “In our complex industry and technological ecosystem, nobody should ever feel that they are 100 per cent compliant. We have done our best to meet GDPR but continue to monitor and test ourselves daily to ensure that we are fully compliant.” Indeed, a whole sub-industry bloomed around the lead-up to the GDPR deadline, with companies both old and new offering to help guide clients through the complexity of compliance. However, even those who were in charge of ensuring that all of GDPR’s rules were met found that, for such an impactful piece of legislation, there were considerable areas where GDPR wasn’t entirely clear. “Like the rest of the digital publishing industry, leading up to its implementation, we had to do

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our due diligence with our legal teams,” says Alexian Chiavegato, vice president of marketing at Marfeel. “GDPR can be quite ambiguous in certain key areas. We had to make a big effort in terms of time with our legal team to ensure that we were compliant and had the technical mechanisms in place for our publishing partners to be compliant on mobile.” That ambiguity is likely to remain for the time being, as privacy activists, legislators, watchdogs and lawyers all weigh up the various challenges that were launched the instant GDPR came into effect. Despite scaling back their ad targeting businesses significantly in the leadup to GDPR, both Facebook and Google were (coincidentally) hit with lawsuits the same day that the law came into force. Both the UK’s Information Commissioner’s Office (ICO) and CNIL, the French data protection regulator, have reported seeing a rise in data protection complaints following 25 May, and in Austria, as many filings were made in the first month following GDPR as the Data Protection Authority normally receives in eight months. At least 29 cases are under investigation at the European level, and when judgements (and potentially fines) are made for these, tech firms are likely to be watching like hawks to see the precedents that are set. “It’s early days and we will collate, analyse and publish official statistics in due course,” says an ICO spokesperson. “But generally, as anticipated, we have seen a rise in personal data breach reports from organisations. Complaints relating to data protection issues are also up and, as more people become aware of their individual rights, we are expecting the number of complaints to the ICO to increase too.”

If GDPR is to have a truly lasting and wideranging impact, it will doubtless be in a court of law that it is established, but it could take many months or even years before we can accurately judge just how the legislation has changed industry practices. Thankfully, because no company wants to be the first to be taken to court and lose, most firms have already taken plenty of action to protect themselves against GDPR breaches, something that’s already having a tangible effect on the marketing world.

RADIOACTIVE DATA At its heart, GDPR is concerned with data, and while data impacts every level of digital marketing and beyond, programmatic is the area most directly concerned with consumers’ personal data. Every second, millions of campaigns make calculations about where to serve ads, and to whom. In the wake of GDPR, the data that sat at the centre of programmatic and made it so powerful suddenly became radioactive. Naturally, everyone took a step back to see if it would explode. In the days following 25 May, several media buyers report clients cutting programmatic spend by anywhere between 20 and 50 per cent. That drastic fall in ad spend has since recovered slightly, although even a month after GDPR came into force, spending on programmatic exchanges was down by as much as 30 per cent, according to some. The problem with programmatic is two-fold. First, GDPR demands consent, and some publishers, despite having over a year’s worth of notice, still lacked the technology to ensure visitors granted consent to targeted advertising. Second, the oft-criticised ‘black boxes’ of ad tech meant that advertisers often had little guarantee

GDPR CAN SIGNAL A CORRECTION IN THE PRIORITIES OF MARKETERS 8

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that their supply chain was fully GDPRcompliant, and many were sensibly cautious about purchasing ads that could end up costing them millions in fines. Of course, it was in the interest of the ad tech industry to make sure both publishers and marketers felt confident that their supply chain was beyond reproach, and most major firms doubtless put in the necessary legal and technical work required to ensure data privacy and protection. “We proactively communicated to clients the changes GDPR was going to impart on mobile digital publishers before it was rolled out,” says Marfeel’s Chiavegato. “This also included webinars that explained key areas of the legislation, how it might affect them and what Marfeel was doing on our end to ensure compliance. It has, of course, changed the way digital publishers ask for data in the European economic area. The implicit cookie pop-up was replaced with a CMP that requires

SEPTEMBER 2018

explicit consent to be given. The way publishers use data, however, has not changed. Data is still used to provide users with an enhanced, personalised experience and provide the ability to serve relevant ads that keep content free.” Transparency along the supply chain is one of the industry’s bugbears at the moment, and it’s a concern that GDPR was bound to bring to the fore, but the power of programmatic means that most publishers and marketers were unlikely to stay away for too long. Major publishers saw opt-in consent rates reach around 75 per cent within a few weeks of GDPR coming into force, more than enough to justify advertisers returning to programmatic, but programmatic comes in many flavours, and while ad spending levels may be returning to normal, their pattern has shifted. “GDPR has actually created an opportunity for the industry to make some much-needed reforms,” says Ed Preedy, managing director for Europe at computer vision and marketing

firm GumGum. “It has forced us to develop innovative and more accurate ways of reaching people, and has encouraged greater respect for consumers’ online experiences. This will have a positive impact on the development of future AI tools, which will now be designed with these considerations in mind. “We feel that GDPR can signal a correction in the priorities of marketers – particularly when it comes to digital display. There has been far too much reliance on audience profiling in the past, which led to lazy targeting.”

SHIFTING SPENDING One of the areas most impacted by GDPR is thirdparty data. Previously, it was a central pillar in the programmatic ecosystem, powering targeting on a scale that individual publishers and brands outside the digital duopoly could never hope for. After GDPR, every piece of third-party data comes with an asterisk, begging the question of where it was gleaned from, and whether the consumer it is connected to has consented to marketing.

If third-party data can no longer be relied on as compliant and safe for use, programmatic spending has to move to other areas, with programmatic guaranteed seeing a spike in interest. This method, where advertisers can use automation to match their first-party data with publisher audience data, but prices and terms are pre-fixed, was initially not as popular as the full-blown programmatic waterfall. Now, advertisers who feel uncertain about dealing with the vast ad tech lumascape are flocking to it. A similar shift is happening with contextual targeting, which serves ads based on the pages users are looking at, rather than any demographic or behavioural data on the users themselves. Some agencies have shifted their budget away from highly personal audiencebased targeting and towards contextual, and publishers have even said that some of the large media agencies have ended all audience-based targeting and are relying entirely on contextual targeting for some campaigns.

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SEPTEMBER 2018

“When European users opt out due to GDPR, advertisers cannot store and use their data for any purpose,” says AnyClip’s Becker. “However, when user data is lacking, a good way to get users is by analysing and understanding the content they consume, and contextually targeting the right content.”

targeting in a brand safe environment. After YouTube’s brand safety scandals in 2017, publishers pushed harder than ever for advertisers and agencies to adopt the more reliable solution of contextual targeting, but it seems that it is GDPR that has finally made it an essential part of the digital marketer’s arsenal.

“GDPR was a direct response to the annoying, low-quality ads that interfered with the user’s online experiences,” says GumGum’s Preedy. “There should rightly be a swing back towards creating customised, highly creative and contextually relevant advertising in order to restore both marketers’ and consumers’ needs for digital display. Rather than seeing the regulations as a hindrance, marketers should actually see them as an opportunity to enhance their capabilities.”

As with so much in the digital marketing world, many of these changes are happening outside of Facebook and Google’s digital duopoly. With a wealth of first-party data available to them and a massive advertising operation that most marketers are already heavily invested in, the two giants of internet advertising always seem to set their own rules – but GDPR has forced even them to adjust their practices.

The move towards contextual targeting is a good one for publishers, who have long championed its strengths in providing effective

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RAISING THE GARDEN WALL In the wake of GDPR, many marketers who relied on the platforms for ad targeting are reporting issues and difficulties. In April, Google stopped letting buyers export impression files

out of its DoubleClick Campaign Manager to their own data management platforms, and Facebook made a similar move in May just before the GDPR deadline, citing a need to protect people’s privacy. These changes mean that marketers and agencies can no longer track whether an ad has reached someone on Google but not on Facebook, and vice versa, as well as complicating the ability to determine whether the ads have already been seen elsewhere outside the duopoly. In the face of these difficulties, some marketers have been forced to bring in third-party measurement partners, while others are simply taking the risk of bombarding users with the same ads across multiple platforms. “This evolution is creating issues for marketers and agencies alike,” said one agency executive who preferred to remain anonymous. “Walled gardens want to make their walls taller because it benefits them and protects them against

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DATA PRIVACY HAS DEFINITELY CHANGED FOR THE AVERAGE USER GDPR, but it makes achieving what all brands want to achieve – one view of the customer, one view of the journey, a comprehensive understanding of how effective their marketing is – more challenging.” In addition, Google has asked publishers and ad tech firms to assume broad liability for any GDPR breaches that might arise from its adbuying platform. Prior to the GDPR deadline, ad exchanges and supply-side platforms (SSPs) were asked to guarantee that any publishers whose inventory they sell have secured consent for each of the almost 200 vendors on Google’s most commonly used vendor list. By signing, the exchanges and SSPs, as well as the publishers involved, all assume liability for any GDPR violations that Google’s ad-buying platform is charged with. Without an agreement, exchanges and SSPs are limited to selling only non-personalised advertising through Google’s platform, resulting in less engagement and lower revenues. According to the Wall Street Journal, AppNexus and Teads have struck deals with Google guaranteeing consent, while Reuters has reported that Rubicon Project has also agreed to ensuring broad consent. At least one ad tech firm, Sovrn, has declined to sign the agreement, saying that “due to the strict requirements around consent in the Google agreement, Sovrn has elected to wait until Google joins the IAB consent framework, which will make it easier for publishers to comply”. Other ad tech executives have called the prospect of getting consent for each of Google’s vendors from every user “impossible”, and say it goes against the spirit of GDPR, which is designed to allow people to withhold consent from individual vendors if they wish.

A NEW WORLD? That individual control of personal information and consent was where GDPR began, and by

pushing for broad agreements, Google seems intent on forcing the post-GDPR world to fit its existing systems, rather than adapting to the changes. While the search giant may have attempted to insulate itself from the legal ramifications, GDPR doesn’t just exist as a piece of legislation. It’s also a watershed moment that attempts to give agency back to consumers when it comes to managing their own online lives. Given the swirl of controversies surrounding big tech firms, can companies like Google afford to swat aside the desires of users? “In the wake of events like Cambridge Analytica, data privacy has definitely changed for the average user and become a hot button topic,” says Marfeel’s Chiavegato. “The virtues of GDPR, such as transparency and explicit communication for data usage and processing, are a very positive step and may serve to improve this perception. “For the average marketer, it changes how they work with their databases of target audiences. But for marketers, data privacy should always be a core principle that is treated ethically and with best practices in mind. GDPR has reinforced that and ensured that a marketer’s target audience continues to want to hear about new products or services with re-opt-ins. Personally, I’ve reopted-in to all the newsletters that I subscribe to, because they’re relevant to me.” The idea of an online population that is informed and engaged when it comes to data rights and privacy is a noble goal, but it might be beyond the scope of GDPR or any other piece of legislation. The internet age has been in part defined by the push towards convenience and speed, and the notion that every consumer is slowing down browsing long enough to read each terms and conditions page is ridiculous. “Many consumers say and believe they care about data privacy but, when push comes to

shove, they prefer the convenience of having their data harvested and used for better content, more relevant ads and an overall better user experience,” says AnyClip’s Becker. “Most marketers are forced now to care much more than they did just several months ago about data privacy. They are in a bind and trying to find quick ways to maintain the precision of user targeting in a world where user data is not as readily available.” That desire to maintain the same level of targeting and measurement seems to be the resounding sentiment among most marketers. Whether its through switching spending to alternative solutions or shuffling accountability around through a web of agreements, nobody seems keen to accept a step backwards when it comes to the power of digital marketing. GDPR may have made everyone a little gun-shy, but technology moves fast and the law moves slowly. Until judgements start to be handed down and the scope of GDPR is clarified, the marketing world seems to be treating it as simply another hurdle to jump through with the minimum possible fuss. Whether that’s a wise approach remains to be seen. For now, the ad tech world is watching to see who is first to be hit with a sizeable fine for non-compliance and just how big a fine it is.

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SEPTEMBER 2018

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SEPTEMBER 2018

EVANGELISING

DIGITAL David Murphy talks to Martin Wild, chief innovation officer at German consumer electronics retailer MediaMarktSaturn, about the company’s commitment to digital innovation

ediaMarktSaturn is a leading European consumer electronics retailer, the equivalent of Currys PC World in the UK or Best Buy in the US. As such, you might expect it to be at the cutting edge of digital innovation, and indeed it is, but that hasn’t always been the case, as chief innovation officer Martin Wild explains. “We began our online journey in 2011 with a transactional website for Saturn Germany,” he says. “This was our first entry into the multichannel world; we had been offline until then. So we started to go into the omnichannel

business, looking at the channels – online, mobile, social, physical – and the connections between them, for example, click and collect and enabling consumers to check in-store stock availability. This required us to invest in a tech platform, and although this investment is still ongoing, we have managed to establish ourselves as a leader in this area in Europe and win a lot of awards. “When we started out on this journey, we wanted to be a disruptor, to come up with a completely new concept and change how retail was treated in Europe. Since we had more or less missed

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SEPTEMBER 2018

the online revolution, we wanted to lead in the future of retail. We have therefore developed all these new technologies because we believe the evolution of retail will become faster and even more disruptive for retailers. How we shop offline will change massively with the digitisation of the point of sale and everything happening in store to give the consumer a more convenient and personalised shopping experience.”

SINCE WE HAD MORE OR LESS MISSED THE ONLINE REVOLUTION, WE WANTED TO LEAD IN THE FUTURE OF RETAIL

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So what sort of tech are we talking about? “There’s a whole range,” says Wild. “Augmented reality, robots, visual navigation. We also have a virtual reality experience, we have launched voice shopping on Google Home in Germany, and we are using mobile and video content as part of the in-store experience, where consumers can see a video review of products before they buy.

We are trying to lead in innovation to give our customers the best shopping experience.”

THE FUTURE OF RETAIL Despite getting off to something of a slow start, Wild says the company’s experience has actually stood it in good stead. “Initially, we were forced to go online, forced to realise the opportunities of digitisation by pressure,” he

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explains. “Now, though, things are different. We actively see and evangelise the upside of using the power of digitisation. It’s important for us to develop the future and to be an important part of the future of retail.” Being at the cutting edge of things is all well and good, but it comes with an inherent danger that your customers – the very people you are trying

to please – might not always like what you’re trying to do. The company’s experiment with robots, for example, has seen it put a robot sales assistant in four of its stores. The robot, named Paul, first appeared in the company’s Ingolstadt store in November 2016. His job is to welcome customers at the entrance and guide them to their desired products. In his first months in the store, Paul travelled more than 100,000 metres

and interacted with customers around 7,000 times, answering their product queries and guiding them to the right part of the store to find what they were looking for. Cool in most people’s eyes, but not necessarily everyone’s. The solution, Wild says, is to involve the customers. “With all our projects, we listen to the consumer,” he says. “We run a study to get

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SEPTEMBER 2018

MediaMarkt’s cashierless Saturn Express store in Innsbruck their feedback. The robots, for instance, were in our Ingolstadt store for a year before we took them to three more stores, so it’s a long pilot programme, but it’s growing.”

HOLOTOUR In May last year, MediaMarktSaturn embarked on a 20-store ‘HoloTour’, enabling its customers to experience augmented/mixed reality for themselves using Microsoft’s HoloLens headset. Customers wearing the headset were greeted by a virtual assistant called Paula, who walked them through the store and gave them a detailed explanation of three products: the Samsung S8 smartphone, the Microsoft Notebook Surface Pro 4 and Dyson’s Big Ball Allergy vacuum cleaner. Paula explained the products’ key features and benefits, and additional graphical information was displayed on the HoloLens. “In the course of the HoloLens tour, we gathered feedback from more than 3,000 people,” says

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Wild. “And we take all the feedback into account as we build the future of retail, so if a project isn’t well received, we adapt or kill it.”

big fan of AR and as soon as we move from smartphones to head-mounted devices, it will change how we live and it will change retail.

In Innsbruck, Austria, MediaMarktSaturn created an Amazon Go-style Saturn Express cashierless store, again looking to get customers’ feedback as soon as possible to gauge what they made of the idea and what lessons could be learned. “I would say that 90 per cent of the projects we launch, we get feedback of good to very good,” says Wild.

“VR is the same. The channel was overhyped a few years ago after Facebook bought Oculus and now it’s in the Trough of Disillusionment, as the Gartner Hype Cycle calls it. It has picked up some speed, but it’s like online shopping in ’95, early days.

TECH SHIFT So having rolled out initiatives embracing AR, VR, AI and robotics, which piece of tech does Wild think is most likely to succeed in retail? “I can’t predict the future,” he says. “As you know, we are in the midst of a very big tech shift, so there are many things under discussion. Some will take off, others will take 10 years. I’m a

“Robots are coming closer. In a few years, there will be many social robots in our homes doing more than cleaning the windows or floors, such as helping kids with their homework, so it’s also relevant to be there. Equally, I’m sure the cashierless checkout will be an element of the future of retail. What we did in Innsbruck was the full version. We decided on purpose to build a store without a single cash register, but in the main, it will be a second option, so you will have a regular checkout line and an express,

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cashierless checkout line. Not everyone will change immediately, so we always have to offer our customers a choice.” So what’s next on MediaMarktSaturn’s innovation journey? “There are always a lot of things; sometimes you just don’t know what will happen,” says Wild. “We will definitely do a lot more and try out a lot more. This year we launched the Voice Assistant in Germany, where you can order something by voice on Google Home. We are also evaluating the whole checkout area with some of the startups in our Retailtech Hub startup programme, looking at things like video-based frictionless checkout without using a mobile device. We will also run a lot of projects around AI to give a better

personalised experience, and we are looking at some new concepts of what a future store could look like. We have also started to work on blockchain, which is another interesting technology with many different use cases.”

working together on innovation, because our goal is to take retail to the next level. We can’t do it on our own; we need others to join us – startups as well as corporates. Working together, it will be more efficient and better for the consumer.

Having been slow to the online party, MediaMarktSaturn has now set itself the task of leading the way in digital innovation in retail. So how much commitment to innovation does Wild see elsewhere in the industry?

“Our biggest partner is Lidl. We work together on innovation. Not all of them will go as far as using robots, but that’s not important, because we see ourselves as the leader. And because we sell consumer electronics, we feel we should lead this attack, but we see others picking up speed. We have many retailers talking to us, visiting us, and we are happy to share ideas, because we think we need to change this together and not each on their own, because no one will succeed alone.”

OPEN TO INNOVATION “We definitely see many retailers being open to innovation now,” he says. “Many of them have pilot or future stores. Our Retailtech Hub is about bringing together startups and retailers, and

WE HAVE MANY RETAILERS TALKING TO US, VISITING US, AND WE ARE HAPPY TO SHARE IDEAS, BECAUSE WE THINK WE NEED TO CHANGE THIS TOGETHER AND NOT EACH ON THEIR OWN, BECAUSE NO ONE WILL SUCCEED ALONE

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SEPTEMBER 2018

DEBUNKING AD TECH MYTHS Markus Malti, CEO and Dr Steffen Wachenfeld, CPO of WeQ, look at some of the myths around ad tech, offering their views on the technologies and trends that deserve the hype – and those that don’t

here can be no denying that mobile marketing is becoming an increasingly complex affair. Some of the most talked-about topics – including data privacy, the competitive global marketplace, fraud issues and quality of traffic – remain largely confusing and concerning across the industry. To circumvent these complexities, companies are turning to technology, hoping for quick-win solutions. Crucially, while there is a huge shift towards adopting new technologies to simplify and improve processes, few really understand how these can be applied to their advantage in practice. Some technologies are particularly hyped: think of the more exciting buzzwords like AI and VR. With all the talk about these great new advancements, there is still a wide gap

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between the theoretical and practical that needs to be bridged. Although advertisers see the value of these technologies, at this point in time it remains difficult to distinguish exactly which ones can add value and which ones don’t. To further exacerbate the current state of affairs, there are many ‘myths’ circulating about how these technologies can be applied, resulting in more confusion. As we work with mobile advertisers globally, and are aware of their biggest concerns, we’ve identified some of the biggest misconceptions about hyped technologies that, despite sounding great on paper, haven’t yet produced much value and are often misunderstood. These include myths around segmentation, automation, APIs and machine learning. So we asked ourselves:

which of these technologies are actually adding tangible value and generating real results?

MYTH 1: HYPERLOCAL TARGETING TECHNOLOGY IS READY FOR ADVERTISERS

Targeting is a necessity in today’s mobile advertising industry. Leveraging parameters such as an operating system, geolocation or demographics and more, mobile advertisers are able to deliver the right ad to the right user at the right time. This has given rise to the buzzwords ‘hyperlocal targeting’ – also known as geotargeting with very high accuracy – or a ‘segment of one’, meaning a single-person target group. These imply a scenario where it is possible to advertise to a group of people in a very

SEPTEMBER 2018

specific place, or to an individual mobile user, for example, reaching someone who is in front of a particular physical store and offering them a coupon in real time. Sounds amazing, right? But it isn’t quite like that. The reality looks a little different, since almost no one is using targeting that can be accurately called ‘hyperlocal’ – and the reasons for that are simple. First, it is very difficult and costly to obtain location information that is accurate enough. In fact, the standard way of inferring the location based on the IP address can be inaccurate by as much as 100 miles. Second, if an advertiser has access to this information, they need to have the technology in place to make optimal decisions on what to advertise, based on the additional location information. Even if both information and technology are there, the

observations that can be made per location are too few in order to derive the required level of statistical significance. So, while hyperlocal targeting is possible, it’s not entirely accurate today. While there are some limited technologies that offer this option, it’s not something that is as readily available as it appears. Marketing is a game of numbers, where computers repeat the same action, like showing a million impressions of a certain ad and using machine learning to predict the outcomes. The more parameters that are taken into account for the decision-making – such as the operating system, time of day, day of the week, etc. – the smaller the number of observations for each combination of

parameters. Adding hyperlocal information causes the number of observations to shrink, such that predictions start lacking statistical grounds. That’s why it is used only in special cases, e.g. where 100,000 people are in a stadium and listening to a certain artist at a certain time, but even this cannot really be considered hyperlocal targeting. Technically, most advertisers can do hyperlocal targeting, and spend a smaller budget manually targeting in this manner, but if a technology provider claims that they can do it on a larger scale in an automated fashion, be sceptical.

MYTH 2: AUTOMATION IS NOT WORTH INVESTING IN RIGHT NOW Many campaign management tasks can be automated, yet account managers are

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SEPTEMBER 2018

still setting up thousands of advertising campaigns manually, including checking the cryptic tracking links. When optimising campaigns, setting up different parameters for A/B testing is tedious. With automated workflows, multiple A/B test scenarios can be created in parallel and modified over time. Machine learning methods allow for automatically assigning more budget/traffic to better performing settings, thus automatically eliminating non-performing settings over time and ultimately streamlining processes. Dynamic creative optimisation (DCO) uses automation for testing dozens or hundreds of versions of creatives and banners in programmatic advertising. Things such as automated A/B tests and automated link checks have become the serial letter function of advertising. While not many advertisers would replace their skilled designer, they would definitely benefit from having a system that combines dozens of calls-to-action with different logo versions on multiple backgrounds in an automated A/B test, to see which ones perform best, on which traffic and at which times. Nevertheless, it is surprising just how many companies haven’t considered the possibility of adopting automation technology yet – despite having the option – and still do everything manually. Companies that use automation scale better and produce fewer errors because their account managers can focus on actually managing and optimising campaigns. As reported by Forbes, automation will save employees a whopping six weeks of time per year, and a full nine weeks of time for business leaders, which could all be invested in more rewarding tasks. Automation is here now and it’s here to stay. The sooner you adopt it, the sooner you can start reaping its rewards.

MYTH 3: A FULL STACK OF APIs WILL SOLVE ALL YOUR NEEDS

and finance tools. It’s evident that the sheer amount and variety of APIs can be confusing. As a response to the question ‘Do you have an API?’, platforms shouldn’t offer a simple ‘yes’ or ‘no’ answer, but rather a well-informed conversation about which APIs are available and for which purpose. This is a good starting point for understanding which ones can be employed to serve your end goal and ensure that your partner has the solutions you need for your business. Here are some examples: •

•

Multiple dozens of APIs that connect to the campaign management systems and allow for automated import and updating of campaigns. These API connectors are self-written, including the internal logic, e.g. deciding in which cases manually agreed payout should prevail over updated values coming in via API, or vice versa. A feed API to the publishers that propagates the available offers to all publishers and constantly provides upto-date information about payouts and remaining budgets. The challenge here is to provide the internal tools that allow precise control over which publishers or traffic sources, down to the sub-IDs, are allowed and on which campaigns. Multiple API connections to external thirdparty data-providers, starting with services that allow accurate geolocation services, over services that provide meta-information about mobile apps, and ending with those that allow you to check the quality of tracking links or traffic sources. Real-time APIs, often called native APIs or dynamic APIs, which allow mediation frameworks, in-app SDKs or other forms of native traffic sources to connect directly to the ad network. This enables the ad network to do the work of recommending campaigns for given users from a specific source and at a specific time. These are the most advanced APIs, which require a sophisticated machine learning capability in order to guarantee optimal recommendations.

One of the first questions a publisher will ask a potential provider is ‘Do you have an API?’, as API integrations have become the industry standard for technology partners working with content publishers. While there is a perception that ‘the API’ can perform on every level, there are in fact multiple APIs: to be deemed ‘well connected’, industry players typically have dozens. They are all very different.

MYTH 4: COMPLIANCE IS IMPOSSIBLE

Additionally, there are administrative APIs, such as those for third-party CRM systems for billing

The advertising ecosystem is complex and often lacks transparency. Ad tech players and technology providers such as Google,

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Facebook and Amazon are investing in technology and legal expertise to increase transparency and control of data. With GDPR – the legal change that is heavily reshaping advertising in Europe – there is a need for technical solutions that manage data and user preferences correctly, or to exchange data in a compliant way. Besides laws and regulations, there is a general call for compliance from industry players on all fronts: advertisers want to know if the users they pay for are real and if their brand ads are visible; media buyers want to make sure they are not buying BOT traffic and RTB auctions are fair; and publishers want to make sure that no inappropriate ads are shown. For many years, industry players have invested a lot of effort to control traffic, incentivise proper behaviour, and build tools that allow for monitoring and reporting. Currently, the existing tools are re-wrapped and promoted as antifraud solutions, but what is under the hood is what’s important – and here lies an opportunity for technology to solve these challenges. Specifically, you can: •

Ensure that users are real users with post-install KPIs, such as retention and in-app activity. These KPIs are monitored and publishers are committed to certain retention and activity levels, or even paid based on post-install events, such as in-app purchases.

•

Ensure ads are rendered visibly above the fold. Specifically, javascripts can and should be used.

•

Filter out BOT traffic. Many industry players have built strong intellectual property in the form of refined detection methods. In sophisticated cases, an automated decision is made based on a cascade of analyses, such as whether to let users pass or not.

•

Ensure RTB auctions are fair. This is a huge problem and the ultimate solution is to have code audits of DSPs and exchanges.

Machine learning solves many issues around compliance by being able to observe over time, learn and decide based on statistical distributions. Renowned distributions include click-to-install-times (CTIT), where too long is unnatural and too short is impossible; device

SEPTEMBER 2018

MARKUS MALTI (LEFT) AND DR STEFFEN WACHENFELD (RIGHT) WeQ

WE ARE FIRM BELIEVERS IN THE POWER OF APPLYING AUTOMATED TECHNOLOGIES AND MACHINE LEARNING ALGORITHMS TO SIMPLIFY AND IMPROVE THE USER ACQUISITION JOURNEY IN MOBILE ADVERTISING distributions, where especially high concentration of certain devices is unnatural; and over time distributions of impressions to clicks from the same IPs and user agents. This results in more streamlined checks and balances for meeting compliance and managing security of private user data.

KEY TAKEAWAYS Despite the ‘hype’ around certain advertising technologies, segmentation, automation, APIs, machine learning and many more can actually be of real assistance and value to mobile advertisers

globally, especially when managing hundreds or thousands of campaigns. We are firm believers in the power of applying automated technologies and machine learning algorithms to simplify and improve the user acquisition journey in mobile advertising, particularly as advertisers face fierce competition within the walled gardens of Facebook, Google and Amazon, and so must now manage hundreds of other supply channels in order to efficiently acquire high-quality users. It’s just as important to keep your finger on the pulse of the latest ad tech developments as it

is to decode and analyse which technologies can truly benefit your business, before investing time and effort into anything that will not yield concrete results. Take educated risks. Work with trusted expert partners who have the cumulative experience of working with hundreds of publishers, because this can help mobile advertisers understand how to leverage technologies to their advantage and weed out the hyped ‘myths’ from the tangible, actionable solutions. In the end, the facts should speak for themselves in the form of tangible results.

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SEPTEMBER 2018

GROWING PAINS Influencer marketing has moved from niche to mainstream in the past couple of years, but the channel is not without its issues. Tyrone Stewart reports

nfluencer marketing has grown exponentially over the past couple of years, with much of this growth down to the shift in focus from celebrities and social media stars to micro-influencers with smaller followings. A parallel trend has been the emergence of self-service influencer platforms, making it easier for brands to connect with the influencers they want to work with. But while brands have shown great enthusiasm for influencers, questions still remain over influencer fraud, brand safety and the true effectiveness of influencer campaigns. “Influencer marketing has experienced a remarkable rise in recent years. Brands are dedicating more and more of their marketing budgets to it and it’s on track to become a $10bn industry by 2020. But it’s not without its challenges,” says Aaron Brooks, executive director and co-founder of Vamp. “There have been accusations of fake followers and dishonest practice, recently brought to the fore by Keith Weed’s announcement that Unilever would no longer be working with influencers

who had bought their audiences. Meanwhile, ambiguous pricing and process continue to put brands off going it alone.”

MICRO-INFLUENCERS Micro-influencers have grown in popularity because they are seen to have a more personal connection with their followers and are therefore more trusted than a big celebrity name. And brands are beginning to realise that engagement is far more significant than potential reach. “It’s no secret that the disruption of social and the subsequent rise of blogging – and vlogging – swiftly prompted brands to realise that consumers are more connected than ever and trusting each other many times over brand-administered messages,” says Jeniffer Valdez, influencer marketing solutions expert at Sprinklr. “With word of mouth marketing being thrust to the forefront, leveraging influencers to deliver messages to their thousands, if not millions,

of followers has become a quick win for many brands. However, the quickest wins might also be the more costly and risky options without yielding the engagement – or sentiment – that brands anticipated. Look at Pepsi’s ad with Kendall Jenner or the antics of YouTuber PewDiePie. This is not to say that partnerships with mega-influencers are no longer fruitful, but brands are now realising that the number of followers does not solely indicate the individual’s opportunity for influence.” The choice of influencer or group of influencers to work with depends on the goals of the brand. Not all brands will benefit from the micro-influencer approach; some may find it’s in their best interests to utilise a big name. It’s really about having a good marketing head and “being aware of what is better when”, according to Barbara Sołtysińska, CEO and co-founder of IndaHash. “I think if you’re a marketing manager and you’re looking for someone to slightly change your image and your perception and raise awareness, it’s much better to find one or two big YouTubers

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SEPTEMBER 2018

CRUISING TO INFLUENCER SUCCESS The cruise industry faces a number of misconceptions about cruise holidays, with many assuming that cruises are only suitable for older travellers aged 55-plus. Cunard is traditionally associated with being a luxury, legacy brand and tends to attract an older audience, so it was looking to attract a wider customer base and raise awareness of its brand and exciting new locations among a younger, affluent audience aged 35-plus, using a sophisticated integrated campaign. In order to connect with this hardto-reach audience, Cunard took a digital-focused approach, a significant departure from its traditional media approach where its core audience lives. Instagram was identified as the key platform for the campaign. Used as a means of inspiration and discovery, it would drive the context of the campaign at scale. The campaign aimed to drive mass awareness of Cunard and its new ports of call, with a 30 per cent penetration of the 35-plus target audience through paid Instagram posts. It also aimed to generate consideration of a Cunard cruise by driving engagement with influencer content, earning an engagement rate above the 2 per cent benchmark.

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Over the course of 14 days, the influencers were tasked with documenting the luxury dining and leisure activities onboard, as well as the landscapes and exciting new ports of call such as the town of Narvik and city of Haugesund. The content created was uploaded via the IndHash platform and was dynamically placed into DOOH ads across Clear Channel’s mall network throughout the UK in real time. The content appeared on digital six-sheet screens inside shopping centres nationwide, including Manchester Arndale, Ealing Broadway and Drake Circus in Plymouth. The campaign created a sophisticated and immersive experience for audiences across the country. The strategic use of influencer marketing and DOOH allowed consumers to experience the brand in a fun and memorable way, while extending the life of the campaign by reaching audiences online and in shopping malls across the UK.

Working in conjunction with influencer marketing platform IndaHash, PDH UK and Clear Channel, Cunard ran an innovative, first-of-its-kind partnership that combined the power of influencer marketing and digital out-of-home (DOOH) to drive results.

Over the two-week campaign period, the four influencers created 40 pieces of unique content, with an audience reach on Instagram that was 16.5 per cent higher than the target. The campaign drove a 50 per cent increase in searches on the Cunard website during the campaign period, compared to previous campaigns. Overall, the campaign resulted in an impressive 12 per cent engagement rate, achieving an engagement rate 6 times higher than the benchmark across the Instagram platform.

In its first Photographic Journey to the Land of the Midnight Sun, Cunard used IndaHash to identify and select the four most suitable social media content creators from its platform, with a specific interest in lifestyle and travel and a passion for photography. These influencers were invited aboard the Queen Elizabeth on her voyage along Norway’s coastline to the Arctic Circle.

“Our guests are constantly seeking out travel inspiration from social networks and influencers, so the opportunity to share the wonders of the Arctic Circle, live from one of the most famous and glamorous ships in the world, as people go about their daily lives, was too good an opportunity to miss,” says Angus Struthers, marketing vice president at Cunard.

SEPTEMBER 2018

and work with them for two or three years on their channels but also on paid TV ads and all digital communication of the brand,” says Sołtysińska. “So, there are many reasons to use macro-influencers. But there are also many reasons to use mid-tier and micro-influencers.”

SELF-SERVICE PLATFORMS The shift to micro-influencers has paved the way for the rise of self-service influencer marketing platforms, like IndaHash’s, which make it easier for brands to connect and work with those influencers they believe can help them meet their objectives. Self-service tools enable brands to more easily manage the time-consuming elements of influencer marketing, such as selecting influencers and running analytics on campaigns. Using platforms that offer these tools should make it easier for brands to share their exact requirements directly with an influencer, make it easier for them to approve any content from within the platform’s hub, and providing them with a way to manage their influencer relationships from beginning to end. “For brands to truly scale the discipline globally, they need to automate the process,” says IndaHash’s Sołtysińska. “Setting up and managing influencer campaigns can be labour-intensive and time-consuming. From finding the right influencers to managing the relationship and measuring the results, building a robust influencer strategy can be a challenge. But as the industry matures, we are seeing the development of influencer marketing platforms which simplify the whole process.”

around choosing the right influencer to work with; brand safety, should the influencer do something stupid or controversial; and simply knowing if an influencer has the influence they appear to have. “The introduction of social was so disruptive and swift that it didn’t give a chance for brands to think about what brand reputation or brand safety look like outside of the celebrity endorsements they’re used to. And to be honest, they wouldn’t really know until it happened to them or another brand,” says Sprinklr’s Valdez. And while influencer fraud annoys brands and marketing chiefs like Unilever’s Keith Weed, it also annoys those genuine influencers, such as YouTuber Beckii Cruel, who are tarred with the same brush. She says: “I have always taken the decision never to buy followers or engagement. There’s no way of gauging how you’re actually doing. If you know that a lot of your followers are fake or that your engagement is fake, you don’t know if you’re having a good day or a bad day, because none of it is real any more. And, obviously, it’s disingenuous. “It’s frustrating for me when I come across people who’ve bought followers, because then I see them reaping the benefits of having a large following, such as getting invited on trips

to places and getting to work with brands, and taking work away from people who have worked really hard to have those opportunities. And also, the performance of those people’s posts isn’t going to be very good, so it’s making brands think, ‘Oh, maybe this influencer marketing doesn’t really work. Is it even effective?’ It’s frustrating for loads of reasons.” So are the social platforms where influencers do their thing doing enough to rid the space of those that game the system? There is an ongoing trend among major social platforms like Instagram, YouTube and Twitter carrying out fake account and bot clean-ups. However, much of the time, these efforts seem to have little impact. “Platforms themselves aren’t doing much about it,” says Cruel. “You’ll hear maybe every half year or so, ‘Oh, Instagram’s doing a big clean-up of fake followers,’ or, ‘YouTube’s doing a big clean-up of fake followers, your numbers might go down,’ but it’s not really enough. Nobody is facing any repercussions for it.” On a more positive note, fraud is now being discussed extensively across the industry, and highlighting the problem is only going to make it more likely that effective action will be taken sooner rather than later. And influencer marketing platforms are now starting to

By replacing the manual processes previously used to search for, negotiate with and manage influencers, brands are able to embrace the use of micro- and mid-tier influencers by working with more of them on each campaign and across the globe – with the automation having “given advertisers real access to a much greater pool of mid-tier and micro-influencers”, according to Sołtysińska. And, in turn, this is enabling brands to expand “beyond using the A-list celebrity or digital star to work with these much more engaging influencers”.

INFLUENCER FRAUD As with any digital marketing channel, there will always be questions around fraud and brand safety, and influencer marketing is no exception. Indeed, these issues mean that some brands shy away from the channel, over concerns

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introduce their own fraud detection capabilities, rather than waiting for the social media firms to sort things out. “I’ve heard so many publications talking about it and it really is a hot topic within the influencer marketing industry,” adds Cruel. “And I know the platforms are trying to work with and feed that industry as best they can. Hopefully, now that this conversation has had more light shed on it, there can be more done about it.”

AUTHENTIC INFLUENCE As the industry grapples with its issues, budgets keep pouring into the influencer marketing channel, fuelled by the ongoing popularity of social platforms and consumers’ preference for word-of-mouth recommendations over broadcast brand messages. In order for brands to ride the influencer wave effectively, they have to make sure that they identify the most authentic influencers, and those who are the best fit for their brand. “In the age of customer experience, brands need to remain authentic and genuine. Like everything else, for influencer marketing, that will mean finding the right people and building the right relationships to amplify the brand,” says Sprinklr’s Valdez. “We believe we’ll see micro-influencers continue to drive more sustainable engagements. Brands

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might explore more long-term partnerships with influencers. And user-generated content will continue to drive conversion and play a bigger role in how a campaign or partnership is executed.” And YouTuber Beckii Cruel believes that alongside micro-influencers, there could be a place for more traditional celebrities in the influencer landscape. “I would like it to continue going in the positive direction that we’re heading in at the moment,” she says. “I think we’ll start to see more traditional

celebrities take social media more seriously and do more traditional influencer deals. I’d like to see the celebrities treat it a bit more authentically as well, because that’s what I think makes social influencers so brilliant and so effective, the authenticity of the influencers and the way in which they communicate with their fans. Perhaps a traditional celebrity could learn something from social media influencers.” At the other end of the spectrum, platforms like IndaHash and Tribe make it easy for anyone to start out on the road to influencer fame and fortune. So what are you waiting for?

BARBARA SOŁTYSIŃSKA INDAHASH

SETTING UP AND MANAGING INFLUENCER CAMPAIGNS CAN BE LABOUR-INTENSIVE AND TIME-CONSUMING. FROM FINDING THE RIGHT INFLUENCERS TO MANAGING THE RELATIONSHIP AND MEASURING THE RESULTS, BUILDING A ROBUST INFLUENCER STRATEGY CAN BE A CHALLENGE. BUT AS THE INDUSTRY MATURES, WE ARE SEEING THE DEVELOPMENT OF INFLUENCER MARKETING PLATFORMS WHICH SIMPLIFY THE WHOLE PROCESS

SEPTEMBER 2018

THE BUSINESS OF AI

Is Artificial intelligence a force for good, or for bad, and how should brands harness its power to improve the customer experience? Tyrone Stewart investigates

rtificial intelligence. AI. We’re all well aware of it – whether it was first brought to our attention through movies like A.I. Artificial Intelligence, I, Robot, Blade Runner and Ex Machina, or when IBM’s Deep Blue supercomputer beat chess grandmaster and former world champion Garry Kasparov way back in 1997. To date, AI hasn’t quite yet reached the levels seen in the above movies – though it’s likely to

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head there at some point in the not-so-distant future – but it has come on leaps and bounds since beating the greatest chess player of all time over two decades ago. In October 2017, for example, a humanoid robot named Sophia, developed by Hanson Robotics, was awarded citizenship of Saudi Arabia, becoming the first robot in the world to achieve such a status. But Sophia is controversial, and prominent AI insiders have labelled her little more than an animatronic puppet, albeit a sophisticated one.

AI appears in much of the technology we use today, even if we take it for granted. It appears in obvious places like in our Amazon Echos and Google Homes, yes. But the technology is also determining the suggestions provided to you by Netflix, Spotify and Amazon; powering the computer-operated ‘bad guys’ in video games like Call of Duty and Far Cry; and used in ridehailing apps such as Uber and Lyft to determine the price and match you with other riders. It’s even used by social networks to help them

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moderate their platforms, alongside plenty of other functions of AI most of us come across every day. “AI is on the rise in both business and the world more generally,” says Ben Plomion, global CMO at GumGum. “AI will, in many ways, amplify and enhance human ability – particularly in business. Machines have been developed to take on highly sophisticated tasks and process vast amounts of information that humans can’t do at scale or speed. “AI can be used to see and solve difficult problems for humans, and free up time for us to take on more intellectually challenging tasks. In this sense, the appeal of AI for businesses is significant. As the technology becomes more sophisticated, organisations are increasingly leaning on AI for cutting-edge applications that satisfy the need for reducing costs, boosting efficiency and driving innovation.”

WHAT’S THE USE? This year, we have seen more controversial suggestions as to how businesses could harness AI to make either our or their own lives easier. We’ve seen Google unveil its Duplex technology, which will one day enable people to enlist Assistant to make appointments and reservations for them over the phone at salons and restaurants. This wasn’t entirely well received upon its unveiling because, in the demo, the AI did not inform the person on the other end of the line that it was indeed an AI – and people questioned the ethics of this. The internet giant did respond to the complaints and assures us that the final version of the technology will come with a disclaimer.

Uber also courted AI controversy with an interesting recent patent application. The transportation network filed for a patent for a computer model that can predict user states based on data from current in-app requests, as well as their previous behaviours – essentially being able to detect when people are intoxicated and requesting a ride. This information could then be used to alert drivers before they accept a passenger and may not give users the chance to opt for shared rides. It’s certainly an interesting premise, especially for those (like me) who use the app while intoxicated 95 per cent of the time. (I still have a 4.6-star rating though.)

AI IN THE BACK Though there are plenty of left-field uses of AI, like the above, many companies are utilising the technology in the back end to help power their platforms, rather than applying it to the consumer-facing elements of their business. One such firm using AI effectively is Waze, because, according to Finlay Clark, UK country manager at the Google-owned firm, “Any company with decent data sources is, or should be, making the most of it.” “The combination of data with AI – specifically machine learning – is fundamental to how Waze works,” says Clark. “Today, we’re not only using the technology to help determine speed limits on a road, but also to help drivers navigate through dangerous zones, and to learn where our users plan to drive next and optimise their journeys accordingly.”

The digital rail ticket platform uses “data to create smart solutions” for customers, with AI being “fundamental for any travel tech company looking to stay ahead of the curve and meet growing demand for a personalised experience”, according to Fergus Weldon, director of data science at Trainline. “At Trainline, AI trained with huge amounts of data provides bespoke contextual information for every customer, from helping them get the best ticket price through predictive analytics to helping them find a seat on a busy train through crowdsourced feedback,” continues Weldon. “Advances in AI mean that we can address some of the challenges our customers face when travelling and give them effective real-time smarts to help make their journeys more seamless.”

THE ROBOTS ARE COMING Away from the positive commercial applications and the other more opiniondividing ones, there is a long-running concern around the idea that AI technologies will eventually start working together in order to wipe out the human race (a notion that has been perpetuated in Hollywood by the aforementioned movies). For now, there are two primary concerns around the technology. The first is around its potential to create mass unemployment, as computers become capable of undertaking

Waze is joined by companies like Trainline in ensuring all aspects of transportation benefit from what AI technology has to offer.

FERGUS WELDON TRAINLINE

ADVANCES IN AI MEAN THAT WE CAN ADDRESS SOME OF THE CHALLENGES OUR CUSTOMERS FACE WHEN TRAVELLING AND GIVE THEM EFFECTIVE REAL-TIME SMARTS TO HELP MAKE THEIR JOURNEYS MORE SEAMLESS @mmmagtweets

SEPTEMBER 2018

FINLAY CLARK WAZE

THE COMBINATION OF DATA WITH ARTIFICIAL INTELLIGENCE – SPECIFICALLY MACHINE LEARNING – IS FUNDAMENTAL TO HOW WAZE WORKS

more of the tasks that humans currently do. The second is the potential for bad actors to exploit AI by hacking it or using it to create fake content, including video content, that could be used to manipulate the public. Looking at how AI may affect jobs, many have speculated that the technology will result in the loss of thousands upon thousands of roles, while others have said the impact won’t be anywhere near as bad as some expect it to be, because new jobs will have to be created to manage the robots. One thing’s for sure: we’ll get a better picture of which side is right within the next few years – but those within the industry seem to be in agreement that the impact on jobs probably won’t be anywhere near as significant as the naysayers predict. “As with any new technology applied to the advertising world, there are questions over how AI will impact creative roles and skills in the long term,” says Peter Day, chief technology officer at Quantcast. “Some are worried that it will kill off jobs. Others argue that technology cannot mimic true, authentic human creativity. “The question shouldn’t be whether AI can do things better than humans, but how AI can help humans do better. The brands and marketers that first figure out how to complement their employees’ creativity with the power of AI will have a disproportionate advantage over their competitors.” Looking more broadly, Stuart Templeton, head of UK at Slack, doesn’t believe in a future where technology takes over all jobs. “Over time, with innovation, yes, some tasks may be replaced by technology, freeing us up as a society to do things that we were unable to do before,” he says. “For now, though, to free us up to be more productive, companies should create an environment where collaboration between employees is as frictionless as possible, and embrace innovative technologies to support this.” When it comes to bad actors, there have been growing concerns surrounding the possibility that AI technology could be exploited. Earlier

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SEPTEMBER 2018

this year, a report from several institutions, including Cambridge University’s Centre for the Study of Existential Risk and the Future of Humanity Institute, warned that AI is in a position to be taken advantage of by rogue states, criminals and terrorists. This notion was reiterated by the UK’s House of Lords Select Committee on AI, which highlighted the need for a cross-sector AI code to ensure that the technology is used correctly. On top of all this, there have been several examples of researchers managing to hack smart assistants to spy on users or even order products via AI personal assistant devices without the owner being aware. “There’s no question that malicious use of AI is a risk that needs talking about and addressing,” agrees GumGum’s Plomion. “Steps are already being taken to understand exactly what those risks are, what they could be in the future and how we can prevent them or act on them when they do occur. With the technology still being in relatively early stages, it’s hugely positive to see these issues being raised and explored now so that we can continue progressing safely. AI has enormous potential to impact our lives for the better, and we need to learn how to work together with this technology in order to reap its rewards in future.”

ETHICAL ISSUES Given AI’s potential to be used to do harm, it is important to address the ethics of the technology. The implication that AI technology could be hacked by bad actors creates a whole new issue around the privacy of people’s data. And then there’s the issue of the potential biases that could either be ingrained in the technology or learned by it. “The main ethical issue surrounding the use of AI in my opinion is bias,” says GumGum’s Plomion. “It’s essential that AI be designed by a diverse group of individuals and designed to reflect the minutiae of society within which it hopes to fit. “These issues will become increasingly important as new technologies powered by AI become more prevalent in society. Developers need to understand that they are

no longer just building apps but technology that intertwines with wider social, political and economic systems. “Likewise, issues of data privacy, product utility, creative execution and computing resources all come into play when building AI services, and these require careful ‘human’ consideration in order to roll out smoothly and properly.” The ethics behind AI were also a key factor in the recommendations made by the House of Lords Select Committee on AI. The group suggested that AI should be built for the benefit of humanity, with intelligibility and fairness, to ensure people’s rights to their data, to educate and not to be used in order to harm or deceive humans in any way. It also highlighted the need for AI training in order to ensure all ethical standards are met.

IS THE FUTURE BR-AI-GHT? “AI is set to disrupt every customer interaction, every company and every industry, including advertising,” says Quantcast’s Day. “Today, our industry is just scratching the surface when it comes to the potential for AI, and more specifically machine learning, to deliver more relevant and effective campaigns.” He adds that the AI technology we’re seeing now is still very much in its infancy, and “will have a bigger positive impact on our lives than the internet”. But with such an impact expected and all the negatives that are still swirling around AI – whether it’s job losses, bad actors or unethical use – has the technology already come too far, at least for the time being?

“However, assistants of this kind have been designed with the intention of making life easier for humans – in theory, they will eventually be able to solve problems for us efficiently and effectively in a way that will feel natural and innocuous.” Whatever fears there may be around AI, they have not stopped a huge number of people buying smart assistants like the Amazon Echo or Google Home. Because of this, it’s important that businesses embrace the technology and use it to engage with their customers. “The more we learn about the power of AI, the more we can understand its applications in the real world. Though there is always a bit of risk, I don’t think the risk of bad actors is greater than for previous technologies,” says JJ López Murphy, AI and big data tech director at Globant, and one of the authors of the book Embracing the Power of AI. “When AI was first introduced in commercial applications, we didn’t understand it as well as we do today. When previous technologies like the internet were introduced, many of its capabilities were unknown and feared. But the more we learned and understood the internet’s potential, the more we could see its benefits instead of its risks. “As researchers and data scientists continue to advance and understand AI, the more organisations will see how using AI will benefit the workforce. The bottom line is that AI is just another example of cutting-edge technology that will improve the lives of many people. And though there are risks, the rewards outweigh them,” Murphy concludes.

Looking back to the Google example or a Robot like Sophia – if she’s real – and we may well wonder if the scenes from the movies are closer to becoming a reality than we ever expected, especially when people who utilise AI, like Tesla’s Elon Musk, are warning of the potential for the technology to lead to a situation where we have a robot dictator.

At the end of the day, we all know that AI is here to stay, and that it’s only going to start popping up in even more places all around us. Whether businesses opt in future to utilise AI more on the front end than the back end remains to be seen. Whether we are set to be overrun by tyrannical robot overlords is another moot point.

“When we think about AI going too far, it’s usually the concept of the uncanny valley coming into play – people tend to feel unsettled and threatened when androids resemble humans too closely,” says GumGum’s Plomion.

For now, we can all just continue talking to our Alexas, Homes and Siris; using our AI-powered apps and streaming services; and playing our AI-powered games, while always hoping they don’t one day decide to control us instead.

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