A new partnership between business solutions and technology company IBM and CRM company Salesforce has been announced, highlighting the ever increasing Artificial Intelligence (AI) applications to marketing and CRM platforms. IBM is no new to this type of partnerships; in March 2015, IBM also formed an alliance with Adobe Marketing Cloud. With these partnerships IBM aims to become more equipped with key pieces from the cloud marketing solutions integrating across them, and importantly create commercial opportunities for its AI systems.
From the advertising point of view the question is what do these partnerships of business technology and marketing cloud services mean for the advertising ecosystem?
For a start, IBM is not seen to directly enter and compete in the same arena with the traditional advertising agencies (despite having acquired four digital marketing agencies in 2016). It will still be active in the wider advertising field, but in a different sphere- much more in the source of the marketing strategies and the back rooms of budgets decisions.
IBM has Watson, its AI platform and data that increasingly deploys it in more commercial projects (it has been developing AI for the last three decades). What IBM doesn’t have is any links with the publishers; ad agencies would typically control these relationships. But it doesn’t need to have these. The value of advertising is more and more created in the prediction of consumer choices. Given the machine learning application tools and capabilities, IBM has a solution for predicting consumer behaviour based on the huge number of data points that can process and analyse with AI.
IBM doesn’t have any link to the ad exchanges either- the stock market style exchanges that ad impressions are sold over. But again, IBM doesn’t need to have these. The ad tech explosion over the last five-six years has (over-) developed the ad serving automation. Ad tech companies have filled the space of exchange platforms and have reached the point of commoditisation. This has reduced the ad exchangers’ value in the ad supply chain.
To the point of relationships however, IBM has another type of contacts. Key business relationships with the C-suite of larger, more complex corporations acquired through its integration and technology services contracts. These contacts would extend to the CMOs of an organisation whose chief role is to decide on the efficient spending of marketing campaigns. Ad agencies would normally bid and influence CMOs, but IBM is to challenge this.
What IBM has that is very useful and adds value is the integration models and tools to orchestrate separate business pieces that run across a company from marketing strategy to sales. So although IBM will not necessarily sell its marketing services to insurance, media companies and bank clients (as its new partner Salesforce does), it nonetheless has the expertise to integrate across the separate business units from its technology and consulting services. For the CMOs integration is a critical process especially in larger corporation that adds value to the marketing operations.
Having Salesforce at its right hand IBM can now provide a proposition to the CMOs that a typical ad agency could not. This is to integrate and streamline the marketing priorities within the business and to augment the Salesforce CRM pure marketing force with clever use of data and machine learning techniques from its Watson application. Above all it promotes Watson API in the mainstream advertising as an essential predictive tool. As with all ad tech solutions, it is a matter of proving that AI can deliver higher measurable ad efficiencies. IBM has acquired bluewolf ($200m, March 2016) a digital marketing consulting firm that works on the Salesforce platform- with hindsight this was a test bench for the scale up with the partnership. Salesforce on the other hand will deploy its CRM and marketing (see krux acquisition in 2016) cloud suit with the advantage of the AI spin. Agencies would still need to play their creative and production role though and provide the links with the publishers.