IBM Watson’s Customer-Facing AI Deployments Signal an Insight Revolution for CMOs

By Rowan Philp

During Super Bowl 51, more than 100 million viewers heard that “one of the most powerful tools our species has created” was being unleashed to search out every possible deduction for individual tax returns this year. An hour later, Patriots quarterback Tom Brady appeared to leverage his own version of artificial intelligence when he learned the subtle weaknesses of a clearly more talented Falcons team, overcoming a 25-point deficit and securing a win.

While AI functions have been widely deployed for years to improve manufacturing efficiencies and personalized searches, the announcement of the customer-facing deployment of IBM’s leading artificial intelligence API—Watson—for H&R Block customers signaled a revolution for CMOs.

Last year, a report by Weber Shandwick showed that 68 percent of CMOs were planning for the AI revolution, and a majority said they expected AI to have a bigger impact on marketing than social media. However, new surveys show that most companies now see the greatest value from AI coming in front-office, marketing and sales functions rather than the traditional back-office efficiencies that saw the major early investments in machine learning and cognitive technologies.

Dario Debarbieri, Chief Marketing Officer for IBM Watson Customer Engagement–North America, says that AI represents a revolution for marketers today—and the CMO who fails to leverage cognitive computing tools today would be like the CMOs who failed to establish company websites in the late 1990s.

“Imagine you were a CMO in 1999 or 1998, and you decided that you were not going to create a new digital channel by building a website that had the capability to sell your products,” Debarbieri says. “It's almost the same comparison today with cognitive computing because if you're a CMO, and you're acting and reacting on old data and using unintelligent tools, it will be a fatal mistake.

“It is now obvious that this technology will give you an edge as a CMO. H&R Block is a perfect example of that. They put together the TV commercial for themselves, and it has proven to be a true brand differentiator.”

The consumer experience is already being transformed by Watson’s Customer Engagement suite of offerings for multiple companies, including its commerce, supply chain and marketing pillars. The technology’s ability to identify current and changing customer needs in real time allows campaigns to mid-course correct, and its recommendations from unstructured data insights are generating brand loyalty through a whole new level of personalization in offers and communications. For example, almost a third of Amazon’s business now comes through recommended purchases, driven by machine learning algorithms.

Just last month, new predictive tools were added to the IBM Watson Marketing Insights platform that helps clients design extremely targeted campaigns based on sources like social media and in-store visits to provide deep insights into customer behavior. Debarbieri says that one recent survey illustrated the importance of cognitive computing tools for CMOs: 75 percent of companies today struggle with 25 percent of their available data, and worse still, they have virtually no access at all to the remaining 75 percent of their unstructured data.

“We know that all CMOs have problems dealing with data,” Debarbieri says. “We have so many dashboards and so much information, but most of the information is not real-time, and a vast amount of data is being created in multiple forms. One is the data that a company will create or acquire and will know well, but the unstructured data—which comes from comments on social media, different channels of communication like video, audio, email, instant messaging, etc.—represents an immense amount of information that we can't grasp without cognitive capabilities. We need intelligent tools to make decisions much faster and get to the client in a more personalized way.”

The new momentum for AI has been propelled by a clearer understanding among executives about the diversity of applications of cognitive tools, including limited implementation. Debarbieri says the success that 1-800-Flowers has enjoyed in deploying Watson-powered recommendations for personalized gifts is a perfect example.

“You can use the technology in two core ways,” he says. “One is basically infusing cognitive APIs into your systems. If you have a telemarketing center today, you can infuse your process management tools or your VPM with these type of APIs for personality insights, for example. So before you make a call, you can actually check the personality of the person that you are going to call or discover a pattern between the people that you call that may help guide your call. In some cases, companies may want to go entirely cognitive and may have larger implementation times, but you can start with consumption of APIs.”

However, Debarbieri says that regardless of the implementation choice, it is important that companies retain ownership over their own data, and a key differentiator for IBM Watson is that it allows customers to retain that ownership. Although he concedes that conventional data analytics software can offer important value for CMOs, Debarbieri believes the increasing prevalence of unstructured data and importance of real-time campaign recommendations will make AI platforms indispensable for CMOs.

“With data analytics and even predictive analytics, marketers basically put together obviously large amounts of data and make sense of it,” he says. “However, for the most part, they only understand the impact of that data in past tense and have to develop their own conclusions and decisions based on the information that they receive. On rare occasions, conventional data tools will also give you real-time information that helps you to make rapid decisions. But what you cannot do—which AI allows you to do—is actually predict events with intelligence embedded so that you have a sense of future outcomes as well.”

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Rowan Philp served as Chief Reporter and Foreign Correspondent for the Sunday Times in South Africa for most of the past decade—a period broken by stints at the Washington Post as Deputy News Editor; a Harvard/MIT fellowship; and two years as London Bureau Chief. He is currently a US contributor for the Sunday Times and Mail & Guardian, based in Boston, where he specializes in reporting on South African expatriates and diplomats, as well science and innovation.

In his 20-year career, Philp has reported from 27 countries around the world, from Haiti and Libya to the civil war in the Philippines and the World Economic Forum at Davos, as well as covering the past four US presidential elections. He has twice been awarded South Africa’s highest national print reporting prize, the Vodacom South African Journalist of the Year.

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