Predictive analytics and AI were key trends at this year’s Festival of Marketing. Rebecca Ley reports how RedEye and Nextatlas have been utilising the technology
“There’s no such thing as AI yet.”
That’s according to Matthew Kelleher, chief commercial officer at RedEye, speaking at the Festival of Marketing in October. However, he says this makes it even more important. AI, he argues, is human intelligence on an even greater scale – and we haven’t quite got there in marketing.
Instead his digital marketing company focuses on predictive analytics and machine learning. RedEye recently reached the end of an 18-month predictive analytics initiative, which tested its technology on organisations’ multi-channel campaigns. The strategy aimed to improve the customer experience at key stages in their journey, through first and second purchases, multi-purchases, and churn. The theory behind the strategy is when a brand understands a customer’s next likely action, they can target them more effectively and drive up their lifetime value.
This predictive modelling aims to predict the customer’s next action – so they can then be targeted through marketing automation more effectively – rather than simply reacting to an event. Using a model based on reducing email volumes during its Christmas marketing campaign, confectioner Hotel Chocolat increased revenue by 28% while sending 40% fewer emails in this period. Other brands saw an increased conversion rate of 24.5% and increased the rate of second purchase by 83.5%, as well as reducing customer churn from 3.1% to 1.4%. If you’re looking to do one thing, Matthew suggests, “You should focus on churn”.
RedEye has also been using predictive analytics to work on a longer analysis to increase customer lifetime value. Using predictive models over a twelve-month period, the company saw LTV growth exceed its 46% target by 38%.
Trend-setting AI for a competitive edge
The idea of predicting customer behaviour to increase engagement is at the core of data platform Nextatlas. The company leverages proprietary algorithms and AI methodologies to detect new trends before they reach the tipping point of becoming mainstream.
“People normally adopt trends too late,” says Mario Coletti, managing director, Nextatlas. “The platform helps business innovation by staying 15 to 18 months ahead, along with the early adopters.”
The platform, which launched in 2014, allows businesses to track any number of trends in the market, using it to validate their ideas, present ideas to the board, create trend reports, and generally stay ahead of the game. It can be used to understand your customers, as well as larger strategic deals such as identifying up-and-coming brands for mergers and acquisitions.
It can also help agencies win bigger clients with forward-thinking insights, using the platform to analyse data from future customer trends. Aside from giving you a competitive edge, the new AI technology can reduce wasting time on manual working. “On average 19% of marketers’ time is spent on research,” said Mario.
A time saving means a cost saving, as well as the obvious benefit of providing customers with information they wouldn’t see otherwise. “They feel empowered by this way of working,” says Luca Morena, co-founder and CEO of the company. “Since 2014, we’ve been able to double revenues year-on-year.”
On the flip-side, however, does predictive analytics make the future self-fulfilling, removing the unpredictable human element of customer behaviour? In Luca’s view, maybe so. “The human layer between intelligence and the artificial brain will disappear,” he says.
But so long as we have control over what we want automated by AI and what we want designed by humans, we should be alright: “AI could be an enhancement of creativity, rather than the death of it.”
