As we move into the era of AI, the entire business landscape is changing. One of the core pillars of any business, consumer marketing, is also going through transformation along with changing times. We have moved to a world of performance marketing – KPIs, sometimes even pinpointed
to individual level, catching on trends, personalization of ads etc.
As we embrace the power of Customer Acquisition Costs, Customer Lifetime Value and ROI, we have somewhere lost touch with creative essence and story telling – ingredients which built strong brands and have stood the test of time. Is AI the Promised Land?
Consumers Insights and its application based on data
For long, the marketeers have struggled to understand individual consumer behaviors, how consumers act en masse, how to craft a message that appeals to its core TG, despite individual differences, and eventually how to link consumer purchases to the brilliant campaigns. AI has provided us all those tools – it can analyse big data sets, can help marketeers optimize campaigns, can be used for predictive analysis, and can refine approach of targeted marketing with unprecedented accuracy. AI and performance marketing comes at a cost. Traditional marketing approach thrives on creativity – it uses the art of story telling to relate their story to consumers. The best campaigns in the last century have relied on bold ideas, innovative storytelling, and creative instincts.
This form of art has created deep consumer connection, brand loyalty and distinctive identity. In the age of AI and digital marketing, all the brands seem to be moving towards homogeneity – we are relying too much on past successes and failures. The brands seem to follow the same trend, similar aesthetic appeal, and use very formulaic approach to generate the next big idea, limiting the biggest creativity asset – human imagination. Once there is a “trend” on social media, it is very unlikely that we will see something fresh from brands until next thing catches on. And this also leads to brands force fitting their messages to hop onto the latest trends.
Case in Point – Nike.
Nike has been known to launch inspirational campaigns year after year. Even when they use Sports behemoths, the stories appeal to everyone. Their magic was in creating bonds with laypersons and making them believe in themselves, making them believe that they can do it too. And then came performance marketing, and entire focus shifted on personalization of messages, clickthrough rates to online shops, KPIs and ROIs, and they stopped imagining.
Let us look at the earlier campaigns by Nike.
And now let us look at their campaign for the recent Paris Olympics: WINNING ISN’T FOR EVERYONE | AM I A BAD PERSON? | NIKE
Their latest campaign is rather unimaginative and uninspired. It also goes against the spirit of sportsmanship in many ways. Olympics especially is rife with stories of camaraderie and spirit of sportsmanship. The Nike campaign just doesn’t resonate well with their own brand as well as
the spirit of sportsmanship. Not just this, Nike’s share price has taken a beating as they continue to lose sales to other
players. So what went wrong?
Overconfidence in digital data
During/ post COVID, Nike was very quick to leverage its digital platforms, as other brands struggled to shift to online model. That strategy worked for them very well when the stores were closed and people were at home. But as the world started opening up, consumers were craving for experiences. They wanted to go to shops to make purchases, they wanted to engage with others in communication and they wanted to feel normal again.
As Nike continued to focus more on digital store and communication, consumers started feeling alienated. Many raised concerns over privacy issues, given Nike’s personalized marketing. This strategy also alienated their retail partners, who played a big role in Nike’s success previously.
From Nike’s end, they relied heavily on the data they had gathered, and continued to gather from consumer engagement across platforms. They designed all their communications and next steps based on the digital data, and forgot what resonated with their consumers. Nike has always been about heartfelt messaging – failure, perseverance and success. But with the drive to extract maximum ROI, they somewhere left their creative steam and let the numbers dictate. Result? Unhappy consumers, dropped sales and a severe drop in their stock price. The Future?
As businesses and brand owners, we need to learn to strike a balance between the rational (numbers, KPIs, ROI, analytics) and the irrational (creativity, story telling, bold ideas). Consumers will always be enthralled by creative and authentic story telling. We need to also ensure that the new age technology AI complements the human competencies, and not over rule them. AI will continue to make progress in analytics based on data set available for training,
and will continue to be more and more accurate in generating those insights. However, humans should continue to develop strategies based on those insights, instead of relying entirely on technology.
In a perfect world, both AI and human competencies will co-exist and complement each other to make stronger brands.