IAB Working Group Aims To Develop Marketing Standards For Artificial Intelligence

The Interactive Advertising Bureau has established a working group of industry executives to tackle three areas that will shape the use of artificial intelligence and machine learning in the digital marketing space: recruiting talent, developing new approaches to creativity, and establishing insights.

The IAB AI/Machine Learning for Marketing Purposes Working Group is headed by Co-Chairs Patrick Albano, Chief Revenue Officer of AdTheorent, and Jordan Bitterman, CMO of IBM’s the Weather Company.

The Weather Company has been particularly aggressive in using IBM’s AI and machine learning system, Watson, to power campaigns for the likes of Campbell Soup Company, Unilever, and GSK Consumer Healthcare.

“Transforming ourselves and industries is part of The Weather Company DNA,” Jeremy Steinberg, TWC’s Head of Global Sales, told us earlier this year. “We’ve embraced big data and leveraged it to improve every aspect of our business, from forecast accuracy to ad targeting. Now we’ve set our sights on cognition. We believe human interaction is the new ‘search,’ and that cognitive advertising is the next frontier in marketing – and we’re leading the charge to make it a reality.”

The Weather Company is in the process of establishing the Watson Ads Council, which will include a marketers who will act as a sounding board for the latest ways of leveraging Watson Ads and the use of artificial intelligence for brands.

The IAB is expected to amplify and organize existing efforts at using AI and machine learning for advertising.

Citing a Forrester prediction that by 2020, Albano wrote a blog post introducing the working group by nothing “the companies that effectively master AI will steal $1.2 trillion per year from those that don’t… If you’re not thinking about it yet, hold your wallet because the race is on.”

In addition to the three initial subjects the working group plans to tackle, Albano also highlighted these areas of interest that will be on the agenda as well:

  • Understanding how AI and ML will impact our business
  • Simplifying, defining and setting standards for the space as it relates to the advertising and marketing industry
  • Organizing tools for the industry to plan ahead
  • Thinking about responsible usage of AI so that humans and machines work well together into the future

The assembling of the working group on AI follows the publication of the IAB’s  “playbook” on understanding location-based advertising in April.

On the talent development front, Albano offered a military analogy to what digital marketing companies face in terms of finding the right people to move AI and machine learning programs ahead.

“Recruiting people is hard as so much of the decision is based on timing and circumstance,” Albano wrote. “A cliché approach to recruiting for the armed services is ‘setting up a table in a shopping mall,’ which is similar to the way that a lot of advertising targeting works – make a broad assumption (potential recruits will visit the mall) and hope for the best (maybe our sign will attract them).

“The US Air Force took a different approach earlier this year by using Machine Learning to analyze the different attributes of young men and women across the US and predictively target the people most likely to volunteer for service,” he continued. “This not only takes the guess work out of advertising, but it also identifies hard-to-reach audiences with the right message.”

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What’s Driving The Growth Of Connected Health Devices?

More than 40 percent of U.S. broadband households now own a Connected Health product, up from 37 percent in 2016 and 33 percent in 2015, notes tech research consultancy Parks Associates.

That report buttresses other industry forecasts looking ahead to tech developments in the intersection of connected devices and artificial intelligence. For example, eMarketer has forecast the value of the “Internet of Health Things” will hit $163 billion by 2020, with a Compound Annual Growth Rate (CAGR) of 38.1 percent between 2015 and 2020.

And within the the next five years the healthcare sector is projected to be “number one” in the top 10 industries for Internet of Things app development. As a separate Accenture report notes, the insurance industry is primed for AI.

The mainstreaming of on-demand technologies that have changed the way people find restaurants and share information with friends online is altering the methods that doctors are “discovered” and engaged by existing and potential patients already.  The use of reviews by patients through platforms like ZocDoc is one case in point.

Is there anything on the horizon that will serve as an alternative means of finding a doctor. Will Siri or Alexa or Cortana likely recommend nearby doctors in the future? It’s a matter of time, Parks Associates’ analysis suggests.

“The steady increase in consumer adoption of connected health products bodes well for the ongoing healthcare practice transformation,” said Harry Wang, Senior Director of Research, Parks Associates.

GeoMarketing: In terms of the Connected Home, as well as devices like Amazon Echo and smart watches, can you put the state of Connected Health in context? How big is this area versus other areas, such as wearables or the Connected Car in terms of consumer adoption?

Harry Wang: Connected Health is intertwined with connected home technology and wearable device industry therefore adoption of these technologies will help connected health industry grow.

We include wearables that directly benefit consumers’ health and wellbeing, such as fitness trackers, smart watch with health & fitness tracking capability as connected health devices (which include connected medical devices, e.g., a BPM, or connected wellness devices, e.g. a Fitbit) from a device adoption perspective, adoption of connected health products as a whole category is perhaps on par with smart home device as a whole category (thermostats, door locks), but ahead of connected cars (depending on its definition). Individually speaking, fitness tracker and smart watch with fitness/wellness features leads with 12 percent adoption each.

Are there any particular use cases that are driving Connected Health? For example, are we mainly seeing growth in Connected Health from wearables like fitness trackers?

Connected health is more than devices. Software and services are actually more exciting. Health and wellness apps are used by more than 40 percent of consumers in the U.S., and access to remote care services (those pioneered by Teledoc and MDlive) is on the rise.

Besides these general categories, the connected health market has many unique, high growth, and niche use cases that are gaining distribution channels and consumer’s mindshare.

These innovations that target specific use cases may be driven more by healthcare providers than consumer marketing efforts.

For instance, Health insurers start to fund/subsidize diabetes prevention programs, hospitals begin to contract digital rehab software makers to offer in-home technology-assisted rehab services.

Each use case has significant room to grow but as their target market is not the entire consumer population, they would never reach the traditional mainstream status.

But for healthcare providers and insurers, if these technologies can help them address the issue of the 80 percent of the healthcare spending by 20 percent population, mainstream adoption is irrelevant.

Is there anything in the Connected Health space that will help doctors, hospitals, and medical clinics, achieve greater discovery through the use of these IoT devices?

We do believe that many IoT devices/software that touch upon people’s life therefore contributing to doctor’s understanding of patient condition and helping patients self-manage their conditions will gain more adoption. Siri may one day evolve to answer health related questions from patients or Echo will collect patient self-reported data to doctors.

Applications targeting health and wellness needs of consumers will find their way to a connected home, a connected car, or a connected speaker platform.

Many remote care applications are mobile driven so consumers can talk to a doctor via video on smartphones, and healthcare system will rely more on these everyday consumer devices to engage patients particularly in preventive care areas.

Barriers still exist; it takes time for consumer and doctor’s habits to replace old ones. But we are getting there.

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Retailers Ramp Up AI Efforts, But Feel The Strains Of Catching Up

While brands from West Elm to Harley Davidson to Cosabella ramping up the use of artificial intelligence to better predict and connect with consumers, only 52 percent of retailers say that they’re able to manage real- time customer interactions, according to a global survey of 717 store brand marketing execs by Forrester and AI platform Emarsys.

That said, brands are scrambling to catch up. About 78 percent of retail organizations polled said spend on AI marketing technologies will increase over the next 12 months by at least 5 percent or more.

“AI is helping us to target specific segments of customers, which is increasing our customer base and helping us in addressing their needs,” one European respondent said.

Additionally, retail marketers plan to deploy AI marketing technologies to address foundational requirements for supporting real-time customer interactions, such as understanding cross-channel customer behavior (81 percent), mapping customer journeys (80 percent) and cross-device identity resolution (78 percent).

At the same time, about 65 percent of retailers voiced concern about attempts to keep up with consumers’ rapidly evolving tech choices and the complexity to form cross- channel customer relationships.

To get a better sense of where brands’ comfort with AI stands, the survey grouped retailers into four groups:

  • Experts (11 percent) who demonstrated true AI marketing readiness across all three dimensions.
  • Opportunists (34 percent ) who excelled at two of the three dimensions.
  • Novices (28 percent) who excelled at only one of the three dimensions.
  • Laggards (27 percent) who clearly struggled across all dimensions.

A clear majority of respondents (88 percent) “strongly agree or agree” that AI will reinvent the retail industry and dramatically change what the company does (81 percent).

In addition to finding ways of interacting with customers on their own terms, the bottom line of this call for “reinvention” is the pressure to personalize the shopping experience from Amazon.

Sales on July 11 surpassed Black Friday and Cyber Monday, making it the biggest day ever in Amazon history, the e-commerce giant said in a press release, noting that more than 200,000 women’s dresses — and more than 200,000 lightbulbs —  were purchased by customers on Prime Day 2017.

When asked about West Elm’s AI strategy, VP of Innovation Luke Chatelain told GeoMarketing, “We believe AI has a role in all facets of the technology we create. From programmatic emails to personalized product recommendations, we’re working to create better, more streamlined customer experiences that are personalized to each user.”

In the report summary, Emarsys and Forrester offer this additional guidance for retailers shifting to AI: “Misconceptions of tech skills required for AI marketing hinders mainstream adoption. Users are after all consumers too, they must get their hands-on AI-powered marketing tools to understand, control and teach it to get the best results.

“Not all firms will have all the required skills in the marketing organization, and given the talent shortage, it’s also likely that firms won’t be able to rely on external recruitment to fill the gaps,” the report warned. “Decision makers must educate themselves in all things AI, and ensure that for AI to work there is first and foremost excellent data stewardship, and not necessarily the need for marketers with tech skills.”

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Alexa Poised To Play A Bigger Role This Amazon Prime Day

The third annual Prime Day is set on Tuesday, July 11, with the e-commerce giant promising “hundreds of thousands of deals exclusively for Prime members” with 30 hours of deal shopping starting night before – and new deals as often as every five minutes.

And like last year, many of those deals will be aimed at Amazon Echo owners through the device’s voice-activated digital assistant, Alexa.

In a press release, Amazon singles out “voice shopping”  more “Alexa-exclusive deals” for members with an Amazon Echo, Echo Dot, Echo Show, Amazon Tap, compatible Fire TV or Fire tablet.

“Amazon is exclusively targeting its consumers who have an Alexa-enabled device, offering early-bird access to their Prime Day deals,” notes Dina Abdelrazik, Analyst, Parks Associates. “This will mark the second year that Amazon pushes ‘voice shopping’ with Alexa-exclusive deals.”

According to Parks Associates data, 17 percent of Amazon Echo owners use the device to shop for goods and services. We expect Amazon’s newest Echo Show iteration, which features a screen, to increase voice-supported shopping further.

One other change in the way Alexa homes will be able to shop includes the first buyers of the video/voice device, the Echo Show.

Pre-orders for the $299 Echo Show began last month with, promising consumers “everything you love about” its voice-activated assistant, Alexa, along with the ability to watch video flash briefings and YouTube, see music lyrics, security cameras, photos, weather forecasts, to-do and shopping lists, and more.

While the Echo Show has been a top-selling electronics device on Amazon (naturally) for the past month, the numbers of those shoppers will not have a perceptible impact in terms of actual sales numbers on Prime Day.

However, the use of the Echo Show, and Alexa generally, will certainly influence the shape how the mix of voice- and visual shopping grows.

As Google and Microsoft’s Bing expand the power of visual search as yet another way consumers can find and shop for products, the complementary aspects of voice and visual queries to generate specific responses, as opposed to a list of hypertext links, will force retailers of all stripes to further reconsider their omnichannel marketing strategies.

“With a screen, Echo Show users can visually see what items they place in a cart and make choices based on the displayed selection of goods,”Abdelrazik adds. “Amazon’s other Alexa devices lack that ability – a limitation that has hindered some consumers from voice shopping on devices like the Echo.”

 Prime Mystery

Just how big Prime Day really is remains a well-kept secret, notes Deborah Weinswig, managing director of Fung Global Retail & Technology, in a blog post.

Last year, estimates of the day’s sales ranged as high as $2.5 billion, Weinswig says, citing figures from Internet Retailer.

“Amazon reported that orders increased by 60 percent worldwide and by 50 percent in the US on Prime Day,” Weinswig writes. “Even in 2015, Amazon commented that its Prime Day sales exceeded its Black Friday sales in 2014.”

In a comparison of contrived shopping holidays, Prime Day is way below China e-commerce hegemon Alibaba’s Singles’ Day, which saw $17.8 billion worth of gross merchandise volume last year.

“The shopping holiday serves several purposes,” Weinswig says. “First, it offers exclusive deals for Prime members, rewarding them for their membership. Second, it drives Prime membership, as nonmembers are offered free trial memberships.

“Amazon figured out long ago that Prime memberships represent a virtuous circle for the company: signing up Prime members and providing them with exclusive benefits encourages them to renew their membership the next year and encourages others to sign up for the program who will then renew their own membership,” Weinswig says.

The relative success of Prime membership shopping programs could mean that a saturation point is fast approaching. There were 80 million Prime members in the US in March 2017, twice as many as two years earlier, according to Weinswig. That represent 64 percent of US households.

As rivals like Walmart expand its own responses to Amazon’s e-tail dominance, Amazon’s ability to reduce fees and offering more deals and still make the program worthwhile has to hit a wall at some point in the near future.

So as rival retailers at all levels gird themselves for Amazon Prime Day’s onslaught, the time is right to fine-time their own responses and personalized marketing tools.

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Rental Car Brands Avis And Hertz Shift Gears To Self-Driving

As a range of car manufacturers like General Motors roll out more connected car features and evolve their approach to shared mobility, car rental brand Avis Budget Group and its rival Hertz are working to make sure they doesn’t get caught behind all the technological changes.

Like any other company that depends on getting its customers from one place to another, Avis and Hertz recognize they’re operating in the transportation industry, not just the car rental business.

So rather than follow once car manufactures like General Motors, with its growing Maven shared-mobility program, or Audi, which recently acquired airport-focused and app-based auto rental startup Silvercar, the two are starting to explore their respective options with self-driving cars.

On Monday, Avis signed a “multi-year agreement” to begin working with Google parent Alphabet’s Waymo autonomous vehicle experiment.

The Avis deal calls for the rental car company to support Waymo’s “growing” autonomous vehicle fleet as well as Waymo’s early rider program, a public trial of its self-driving cars in Phoenix, Arizona.

Waymo recently announced that it is adding hundreds of Chrysler Pacifica minivans to build a 600-vehicle fleet. This partnership will allow Avis Budget Group to service Waymo’s growing number of cars on the road, “ensuring Waymo’s self-driving vehicles are ready for riders around the clock,” the company said in a release.

“With members of the public using our growing fleet of self-driving cars, our vehicles need standard maintenance and cleaning so they’re ready for our riders at any time of the day or night,” said John Krafcik, chief executive officer, Waymo. “Avis Budget Group is an ideal partner to provide fleet support and maintenance. With thousands of locations around the world, Avis Budget Group can help us bring our technology to more people, in more places.”

“We are excited to partner with Waymo, the self-driving technology leader that is changing the mobility landscape in a profoundly transformative and beneficial manner,” said Larry De Shon, president and chief executive officer, Avis Budget Group. “Not only does this partnership enable us to leverage our current capabilities and assets, but it also allows us to accelerate our knowledge and hands-on experience in an emerging area as Waymo-enabled self-driving cars become available in the marketplace.”

Hertz Drives With Apple

Separately, Bloomberg News reported that Apple began leasing Lexus RX450h sport-utility vehicles from Hertz’s Donlen fleet-management unit in April, citing to documents released by the California Department of Motor Vehicles.

The Bloomberg report pointed to restive investors’ growing concerns about the role rental car companies will play in the autonomous vehicle future that appears to be fast approaching.

Even more than Hertz and Avis, Apple is also trying to keep pace with self-driving cars. With Amazon and Google ahead of the Cupertino company in powering voice-activated assistants within the connected home, Apple’s Project Titan, the name for its self-driving program, is perceived as lagging its rivals’ efforts in that area.

Still, Apple’s got a vastly different focus that might allow it to ultimately strike when the autonomous car moment is particularly hot. Instead of building its own autonomous cars, the company is mainly interested in providing the software that powers other brands’ vehicles.

In that sense, the race for the autonomous car is chaotic, and each brand is approaching it from the perspective of its own set challenges and strengths.

Avis’s Connected Car Commitment

Over the past year, Avis has struck a number of partnerships designed to allay those concerns and position it at the table for whatever shape the autonomous vehicle future arrives in.

Back in May, Avis touted its commitment to the connected car, saying that 50,000 more vehicles becoming fully connected by early 2018, more than doubling the number of connected vehicles in the Avis fleet. I

“This investment will bring the total of connected cars in the Avis fleet to nearly 100,000,” said Arthur Orduña, chief innovation officer, Avis Budget Group, at the time. “It will also ensure that we remain at the forefront of our industry and will bring us one step closer to realizing what we believe is the future of car rental for our customers.”

Roadmap To The Self-Driving Car Future

After Uber and Alphabet/Google stepped up investments in autonomous cars, traditional car companies and electronics manufacturers reacted quickly to form alliances and stakes in companies to ensure that they, too, don’t get left behind.

For most consumers at the moment, the idea of a driverless car still seems like science fiction — and along with the uncertainty of buying wearables, it’s not certain that people are clamoring for a virtual chauffeur. But then again, before the iPhone, how many people considered taking photos of themselves with their phones or pressing a button for food delivery and payment — or order a car service, for that matter.

As the technological hurdles are being dealt with on the road to the driverless car, a variety of major automotive manufacturers, electronics companies, and tech platforms appear all in on the idea of “if you build it, they will come.”

And for Avis and Hertz, along with all entities across the auto industry, if they’re not part of the building it, they’re likely to be stranded when the mainstream expectation fully emerges.

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Salesforce: Email Still Works To Drive Consumer Connections, As Artificial Intelligence Emerges

“Personalization” is the primary focus of marketers in the Age of Amazon, but to actually achieve that one-to-one relationship with consumers, a Salesforce report highlights the value of one of the older forms of digital marketing: email.

Email seems like an odd touchpoint for marketers’ success as social media and messaging apps emerge as key entries for personalized campaigns. On average, the 3,500 global CMOs surveyed by Salesforce in its Fourth Annual State of Marketing report say 34 percent of their budget is spent on channels they didn’t know existed five years ago — and they expect that to reach 40% by 2019.

The reason for email’s continued relevance, even as Saleforce’s survey shows growth for video, texting/sms, and AI, is that email works well to amplify all those channels.

“Over the past two years, we’ve seen an explosion in the use of newer channels like video advertising, SMS, mobile apps, and native advertising/sponsored content,” Salesforce says. “The percentage of both B2B and B2C marketers using video advertising, for example, has risen by triple digits over the last two years.”

Despite its well-established presence in the B2C marketer’s toolbox, email is still growing at a significant rate, Salesforce notes. Email’s number two ranking among marketing professionals surveyed indicates that marketers may be testing new channels in conjunction with proven ones to find combinations that work for their consumers.

The three biggest benefits cited in the report are improved awareness, higher rates of customer engagement, and improved customer acquisition.

“Email provides a window into customer behavior — such as which emails they open, what device they use, and which offers they redeem — making it a natural candidate to leverage alongside other channels to boost personalization and engagement,” the report states.

While email, when combined with other channels, can help reinforce a message and extend reach, using the data available to craft the message can have a bigger impact.

“This is a missed opportunity for most marketers who aren’t evolving messages between email and other channels based on customer behaviors or actions,” Salesforce concludes. “About half (51 percent) of the emails they send are identical messages to what they’ve broadcast in other channels.”

AI’s Coming Impact

The Salesforce State Of Marketing report notes that 51 percent of marketers surveyed are already using AI.

A separate IDC/Salesforce analysis buttresses that report’s view that that AI will be the fastest growing channel in the next few years.

AI-powered CRM activities will drive new efficiencies in how companies sell, service, and market, ultimately expected to create more than $1.1 trillion in new GDP impact worldwide by 2021.

The IDC/Salesforce report says 2018 is poised to be “a landmark year for AI adoption.” More than 40 percent of companies said they will adopt AI within the next two years.

In addition by 2018, IDC forecasts that 75 percent of enterprise and ISV development will include AI or machine-learning functionality in at least one application.

Salesforce has made a particularly big bet on AI with the release of its Einstein project last fall. With Salesforce Einstein, AI capabilities are embedded with “every Salesforce Cloud,” the company has said. Einstein leverages all data within Salesforce—customer data; activity data from social media chatter, email, calendar entries, and e-commerce; social data streams such as Tweets and images; and even IoT signals—to train machine learning models.

“AI is impacting all sectors of the economy and every business,” said Keith Block, vice chairman, president and COO, Salesforce. “For the CRM market—the fastest-growing category in enterprise software—the impact of AI will be profound, ushering in new levels of productivity for employees and empowering companies to drive even better experiences for their customers. For companies embracing AI, it’s critical that they create new workforce development programs to ensure employees are prepared for this next wave of innovation.”

Among the key findings from the IDC report on the economic impact of AI on CRM:

  • AI associated with CRM could boost global business revenues by $1.1 trillion from the beginning of 2017 to the end of 2021.
  • This global business revenue boost is predicted to be led primarily by increased productivity ($121 billion) and lowered expenses due to automation ($265 billion).
  • The types of AI companies are planning to use, or exploring, range from machine learning (25 percent) and voice/speech recognition (30 percent), to text analysis (27 percent) and advanced numerical analysis (31 percent).
  • New jobs associated with the boost in global business revenues could reach more than 800,000 by 2021, surpassing those jobs lost to automation from AI.
  • Underpinning the adoption of AI, 46 percent of AI adopters report that more than 50 percent of their CRM activities are executed using the public cloud.
  • The United States is predicted to lead the way in new business revenue growth due to the economic impact of AI ($596 billion), followed by Japan ($91 billion), Germany ($62 billion), the U.K. ($55 billion) and France ($50 billion).

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The Future Of Car Talk: The Weather Company Runs First ‘Cognitive Ads’ For Toyota

The Weather Company, an IBM Business, is taking another big leap in connecting artificial intelligence and advertising with the launch of what the company claims is the “first cognitive ads” for the auto industry in a campaign to promote the Toyota Prius Prime.

The Watson Ads for the Prius Prime will run in The Weather Channel App and on weather.com.

The campaign follows recent uses of Watson Ads by the Campbell Soup Company, Unilever, and GSK Consumer Healthcare, respectively began their first foray into marketing that promises to understand and respond intelligently to consumers’ voice-activated and written queries.

The most recent effort involved Watson Ads being aligned with the annual return of the GSK Consumer Healthcare’s Allergy Tracker digital tools to promote relief through its Flonase brand.

And now, with Toyota, the Watson ads invite consumers connect with brands with a personalized, one-to-one conversation via voice and text.

This Watson Ads experience is primarily focused on driving awareness and brand engagement, says Sarah Ripmaster, head of automotive sales at The Weather Company. “Toyota’s goal with this campaign is to reach and engage consumers who are interested in the Prius Prime.

Text or voice queries are answered directly in the ads, which can also send local Toyota dealership information.

The cognitive ad format combines machine learning, natural language understanding, and integrated dialogue tools designed to deliver on the promise of a personalized user experience.

IBM Watson can discern a user’s intent — as opposed to reacting to a keyword search — to best respond to the consumer, The Weather Company says.

Using Watson Ads, Toyota is employing the power of AI to “engage and educate” consumers about Prius Prime. Consumers are invited to ask questions like, “How can I be a better Prius driver” or “Can you tell me about the Prius’s new features?”

By connecting one-on-one and offering a consumer the new car information they specifically ask for, the effort can guiding decision making during the purchase consideration stage, Ripmaster says.

“Watson Ads put the consumers in the driver’s seat,” she says. “Instead of passively experiencing a brand’s message, consumers are actively engaging with the ad to learn more about car on their own terms. This means the experience empowers consumer to ask the questions that truly matter the most to them during their auto shopping journey, and can ultimately help impact brand consideration.

“On Toyota’s side, they are able get deeper insight into the types of questions that consumers are asking during the decision-making process, which can then influence future creative messaging and media strategies,” Ripmaster added.

The Toyota Watson Ad includes several additional features that extend the interaction, including exploring different Prius models, branded video content, and a Toyota dealer locator.

“In the competitive automotive market, the ability to showcase a helpful and beneficial customer experience is invaluable,” says John Lisko, executive communications director, Saatchi & Saatchi, Toyota’s creative and media shop. ”

We are entering the next frontier of marketing, with cognition and AI poised to take consumer engagement to the next level, and Watson Ads is a prime example of that shift and the great potential we have,”Lisko adds. “We have leveraged IBM Watson in other areas of our business such as the programmatic video campaign of 300 custom pieces for Toyota RAV4 and most recently, the Mirai campaign on Facebook in which the tool wrote thousands of ads and we continue to uncover valuable insights.”

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