Almost every list of martech trends forecast how artificial intelligence (AI) will transform marketing. While AI offers benefits, optimizing automation is only half the job.
Marketing will not deliver on AI’s promise unless the human side of the equation is given equal attention. Because business value increasingly depends on human factors including agility, innovation and relationships, those companies that best cultivate human potential will be the most successful.
Sources of Business Value Are Changing
Businesses will always need efficiency but squeezing out another drop has diminishing returns. CEOs realize that agility, innovation and improved customer experience will deliver tomorrow’s gains. KPMG revealed that 67% of CEOs agree with the statement that “agility is the new currency of business. If we act too slow, we will be bankrupt. ” BCG found that 75% of companies say that innovation has become a top three priority, a 10% jump since pre-pandemic. Agility and innovation are essential strategies in a world that the US Army called VUCA (volatile, uncertain, complex, ambiguous). Digital dynamics dramatically accelerated VUCA effects.
VUCA reality is especially obvious at a company’s edge and causes many persistent marketing challenges. The capriciousness of marketing derives from the same complexity as traffic or nature’s ecosystems. Science calls these “complex adaptive systems,” and they acquire their VUCA behavior from many interacting agents (eg, customers, competitors, social networks, partners, and regulatory entities) producing numerous feedback loops which cause situations to change rapidly and unexpectedly. VUCA is why customer journeys look more like a child’s scribble than a linear funnel, why a campaign that succeeded for months suddenly failed yesterday, and why calculating marketing ROI remains a frustrating challenge. Markets behave a lot like weather and stock markets.
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AI Can Be a Great Partner for Marketing – But With Caveats
AI offers many benefits when working in VUCA environments. Markets are complex, but they are also semi-predictable within the bounds of probability and time. Previous generations of marketers have been largely blind to these patterns because humans are ill-equipped to combine through the mountains of data needed to see them.
AI excels at this task. AI can also help ameliorate other human challenges. For example, AI can spot mental biases such as the recency bias where humans tend to over-value what just happened and under-value high impact events of the past. AI can also tirelessly perform repetitive tasks that irritate humans.
But AI fails miserably at interpreting ambiguity and nuance. It is extremely literal. Popular culture fantasizes about AI as becoming nearly human. The 2021 bestseller, Klara and the Sun by Nobel laureate Kazuo Ishiguro, is voiced by the sensitive “artificial friend” of a lonely 14-year-old girl. The 2013 movie “Her” features Scarlett Johansson as a brilliant virtual assistant. In real life, AI algorithms flop when generalizing tasks into broader contexts. They perform well only if trained in narrow, focused, tasks.
Marketing’s VUCA world is anything but narrow and focused, and because of this complexity there are many risks when applying AI. Nicholas Bostrum, in the book Superintelligence: Paths, Dangers, and Strategies offers an example of a machine simulation that when given the task of ferrying a passenger to the airport as quickly as possible has no reservations about running over pedestrians.
Humans, on the other hand, are well-suited for performing in ambiguous, nuanced situations. We excel at creativity, critical thinking, judgment, problem-solving, and interpersonal skills. We grasp context. For example, we can sense meaning in a customer’s inflection change and evaluate the subtle trade-offs such as giving a money-losing discount today to increase future loyalty. Humans also excel at physically dexterous work beyond the scope of AI capability.
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3 Tasks for the AI-Human Partnership
A collaboration between humans and AI is the best opportunity for an agile, innovative response to marketing’s VUCA digital world. This partnership requires attention to both automation and developing human potential.
Three tasks need special focus:
Develop Hybrid Processes and Teams That Integrate the AI and Human Capability
A fresh look at the customer journey reveals skills ideal for both AI-enabled technology and humans everywhere. Take, for example, the mid-funnel phase where customers evaluate alternatives. Customers enjoy digital, self-directed education, and this task can be aided by AI-curated content, AI-enabled prototyping, dynamic pricing and emotional-AI enhanced chat.
But when customers get stuck, they need a human problem solver to investigate, discern emotions, match unique situations to appropriate solutions, persuade and build consensus. Customers now bounce between digital and human interactions making the traditional, linear, first-marketing-then-sales process archaic.
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Become Competent Stewards of AI
The authors of a Harvard Business Review article, “Why You Aren’t Getting More from Your Marketing AI,” insist that because of AI’s literalness and power, marketers must develop new mindsets and skills to ensure success. The article describes how a consumer products firm reduced the error rate in their sales-volume forecast from 25% to 17%, yet lost money despite improved accuracy.
While human decision-makers could tell that the underlying intentions of error reduction was improving profits, the AI was ignorant of this assumption. The AI had improved precision in the low-margin products where most errors had been produced but had inadvertently reduced accuracy in high-margin products. This unintended consequence caused the company to underestimate demand for their most profitable products. Partnering with AI will require a long list of new capabilities including training, managing, troubleshooting, decision-making, governance and ethics.
Prepare Workers for the Jobs Needed in an AI-Infused World
Throughout history, technology has displaced outmoded jobs. In 1910, approximately 40% of Americans worked as either household servants or in farm-related jobs, according to the US Bureau of Labor Statistics. That percentage shrunk to 1.65% by 2000. During the same period jobs for professional, technical, managerial, and service workers ballooned.
In addition to the new jobs needed to operate AI, leaders must prepare workers for jobs requiring uniquely human skills. For marketing, these jobs include applying scientific and design methods, creative development and production, behavioral sciences, security and privacy, and of course, jobs requiring emotional and social intelligence.
The VUCA customer world has produced many persistent challenges for marketing. AI can break through many of these barriers to new levels of value, but only if leaders also cultivate human potential.
Kathleen Schaub is a writer and advisor on marketing leaders’ quest to modernize organizations and operations for greater effectiveness in the complex digital world. She led IDC’s CMO Advisory practice for nine years advising hundreds of technology marketing leaders on management best practices.