Thinking Outside The Black Box Don't Let AI Keep You From Your Customers

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September 16, 2024

When artificial intelligence is asked about the most critical aspect of marketing, the answer is clear: understanding the customer is paramount. AI tools like ChatGPT and other systems emphasize the same thing. Yet, as AI and automation become increasingly embedded in marketing, they can ironically complicate the process of truly connecting with customers.

This challenge stems largely from the complexity of data. Great marketing begins with an understanding of consumers, and that understanding is built on data. Decades ago, data largely referred to simple demographics like age and income. Today, it encompasses far more, including behaviors, transactions, and deep demographic profiles.

The amount of data collected has grown exponentially. For every person in the U.S., more than 2,000 megabytes of data are stored—equivalent to millions of words, articles, or endless streams of content. But having access to vast data is not the same as effectively using it. Connecting with customers in a meaningful way requires not just data, but the technology, expertise, and systems to translate it into actionable insights.

Most advertisers, especially those outside of the largest agencies, face significant challenges in making the necessary investments in artificial intelligence and data analytics to maximize these insights. Meanwhile, platforms like Meta and Google, with their deep resources, have built their business models on controlling and optimizing data for their benefit. Their promise to marketers is enticing: "Invest your budget, and we’ll deliver the results." However, these results often come from opaque, AI-driven algorithms—the infamous “black box”—that make decisions without fully disclosing how they were reached.

The Risks of Over-Reliance on AI

While AI-driven platforms like Meta and Google can drive marketing success, excessive dependence on them can lead to a disconnect between brands and their customers. Marketing strategies risk becoming more about optimizing for platform-driven metrics and less about building meaningful, informed relationships with customers. This can turn marketing into a transactional process, where the focus is on short-term wins rather than long-term customer insights and business growth.

Additionally, algorithms from these platforms are designed to optimize for their own financial performance, not necessarily the brand’s. The deeper a business relies on these walled gardens, the harder it becomes to shift budgets, test new strategies, or react to shifts in consumer behavior. If core customer insights are locked within platform algorithms, it becomes risky to adapt and change with evolving market demands.

Strategies to Reclaim Customer Understanding

While AI platforms can be valuable, businesses can take steps to regain control and use these tools to their advantage, rather than being beholden to them. Several strategies can help shift the balance:

  1. Deep Customer Knowledge: Brands should always begin their media planning with a comprehensive understanding of their own customers. No platform should have more insights into a brand’s audience than the brand itself.
  2. Leverage First-Party Data: Bringing proprietary audience data into campaigns can help refine targeting beyond what platforms offer. Brands that leverage their own insights can uncover more nuanced audience behaviors and preferences.
  3. Structure Campaigns for Learning: Campaigns should be set up not only to achieve immediate results but also to gather long-term insights. This includes testing different segments, offers, and customer journey stages.
  4. Extract Available Insights: While many platforms keep their algorithms opaque, they do provide certain data through APIs. By harnessing these insights and combining them with existing data, brands can gain more visibility into customer behaviors.
  5. Test New Channels: Diversifying budgets to include emerging or alternative platforms can help mitigate the risks of over-reliance on any single AI-driven system. Testing new channels ensures that businesses stay agile and responsive to shifting consumer preferences.

The ROR Approach

At ROR, we were built with one mission in mind: shifting the balance of power back to marketers by making data actionable. We help brands in the health, wellness, and active lifestyle industries harness their own data and supplement it with external insights to drive real business growth. Our data-driven strategies prioritize understanding your customer first—so that when it comes time to allocate media budgets, you’re doing it with precision and confidence.

With over 1 billion impressions delivered monthly and 100 million unique individuals reached, ROR has the expertise to help you leverage AI without losing sight of what matters most—your customers.

Like the bots said, marketing is all about understanding your customer, and ROR is here to make that easier.

 

About ROR:
ROR is a data-driven, AI-integrated, performance marketing company that services land-based businesses, including health clubs, fitness studios, personal and medical service providers, and active lifestyle destinations.  

ROR utilizes AI for ad generation and creative testing, albeit to a limited extent. However, the platform heavily relies on AI for data mining and operational outputs. By processing billions of data points, AI constructs highly precise target audiences, ensuring our clients invest their resources effectively by targeting only interested parties. This approach consistently yields exceptional results.