LUMA On Omnichannel: It’s Really Starting To Come Together

Brian Andersen, a partner at LUMA Partners, will read the tea leaves on marketing clouds and omnichannel marketing at Industry Preview on January 18 in New York City.

Remember when everyone kept predicting the seminal year of mobile, year after year, until the question became moot because mobile was everywhere?

The same thing is happening with artificial intelligence, said Brian Andersen, a partner at investment bank LUMA.

“We often overestimate how fast things advance in the short term, but in the long term, we blow through where we think the market is going to go,” Andersen said, pointing to programmatic as a salient example.

Around 2010, programmatic was only a sliver of the market, “tiny and experimental,” Andersen said, and growth was modest through 2011 and 2012. But by 2013, eMarketer was forced to raise its programmatic ad spend forecast because the space was growing far faster than expected.

In much the same way, progress will feel slow for the next couple of years while people try to get a feel for AI, and then it’s “just going to take off,” Andersen said.

“When you look at the projections for AI – the all-encompassing AI market, self-driving cars included – marketing is only a very small subcategory of that,” he said. “By the end of 2017, you’ll probably hear people say, ‘AI? That didn’t work out in the market.’ But then in 2020, when they look back, they’ll say, ‘Oh, my god, it’s amazing what AI has done for marketing.’”

Andersen is also bullish on what he calls the “orchestration layer” used by marketing cloud companies to improve and optimize the customer experience. Adobe, Oracle, Salesforce and even IBM have been very acquisitive in recent years. And now it’s time to tie all of those assets together.

“AI technologies are going to be used to help with integration and personalization across the marketing cloud applications,” Andersen said. “It may not happen in 2017, but it’s probably going to be sooner than people realize.”

AdExchanger caught up with Andersen to talk AI, predictive analytics, mobile marketing automation and which type of company the marketing clouds are probably going to buy next.

AdExchanger: Each of the marketing clouds wants to own omnichannel. How are they approaching that?

BRIAN ANDERSEN: The marketing clouds didn’t exist even a few years ago. You could say that Adobe started it when they bought Omniture in 2009. Since then, they’ve all gone about creating their marketing clouds through acquisitions, which means they ended up with a collection of assets, each of which focused on a single capability or channel.

One of the criticisms you heard from industry analysts and customers over time is that those assets were only loosely integrated or not integrated at all. But the marketing clouds have been putting quite a lot of effort into integrating their products. One of the areas of orchestration I see playing out in the future is the use of artificial intelligence technologies to help coordinate marketing activities across channels.

What’s the end game for omnichannel?

Predictive marketing platforms have been using AI technologies to coordinate marketing activities and interactions with consumers, providing personalized email, personalized ads, personalized sites – but that can also be used in stores.

Retailers are experimenting with using these types of technologies. If a retailer asks you for your email address and you’re a known customer, it can see your purchase behavior and history and make recommendations. If someone bought a certain blouse in the past, the retailer can offer a jacket, skirt and shoes that they think the person will also be interested. And guess what! They’re in stock in the [nearest] store, and they’re in your size.

That’s true omnichannel marketing. It’s still very early, I’ll definitely admit that, but I actually think it’s pretty near-term.

Where do the mobile marketing automation companies come in?

There are a number of drivers in the app economy: Most apps are free, consumers are downloading fewer and fewer apps over time and it’s expensive to get people to download an app. Therefore, you need to maximize the value of each consumer that you do acquire, to make sure they’re spending as much time as possible and coming back.

Mobile marketing automation companies have emerged with a similar function as the predictive marketing companies, creating profiles on individuals and understanding how they interact with apps while providing messaging, whether that’s in-app, push or email.

Even though they’re coming at it with a focus on the mobile app experience, they have a similar philosophy and even similar capabilities as the predictive marketing companies, which means they can be an orchestration layer for a bigger company or they can just continue to grow up.

Will we start to see the marketing clouds acquire the mobile marketing automation guys?

The marketing clouds are all, frankly, weak in mobile. But where are consumers spending their time? It’s going to mobile. Those two facts together mean that the marketing clouds need much more robust mobile capabilities. I think it’s a good bet.

This post was syndicated from Ad Exchanger.