Businesses that embrace digital transformation and achieve digital maturity benefit from significant and rapid improvements in campaign performance. An independent report from Boston Consulting Group (BCG), has found the use of machine learning in digital marketing can drive quantifiable results fast with an increase of up to 50% in online transactions for some cases.
Business Impact of machine learning
The report, commissioned by Google, found just 2% of brands are best-in-class at data-driven marketing. Yet best-in-class brands drive up to 20% more revenue and 30% more cost savings as a result. So there’s a lot of value being left on the table.
Researchers assessed more than 200 global brands and interviewed more than 40 experts as well as conducting 16 in-depth tests of six brands spanning industries across different industries, such as retail, automotive and finance, and assessed their performances over a period of four to six weeks.
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During this time they measured reductions of up to 44% in CPA and increases of up to 50% in online transactions. Applying AI techniques improved ROAS by up to 33% for the participating brands.
“Our tests showed that advanced technology can drive rapid improvements in business performance and marketing maturity, and with human supervision brands achieve maximum impact” said Dominic Field, Senior Partner at BCG. “Most marketers still need the technical and organizational enablers in place to achieve multi-moment marketing maturity. Individually, each of the enablers represents a powerful increase in capability, and the combination of all of them makes marketing organizations capable of engaging customers at every stage of the purchase journey.”
Noah Samuels VP, EMEA Go To Market Solutions at Google, said: “Data-driven marketing drives business growth. It is vital for all advertisers and their partners to embrace this moving forward. Google is committed to support this journey to digital marketing maturity with the Digital Marketing Transformation programme”.
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Human Intervention + technology
While the available technologies are powerful, ongoing input from people remains critical in driving performance. On average, human adjustments can add another 15%, on top of the 20% technology-driven improvement to campaign performance.
The tests showed that advanced technology can drive rapid business performance in digital marketing. But it takes human input to achieve maximum impact. Businesses must have people in place to make smart strategic decisions, optimise the technology, and decide how best to apply machine learning-based algorithms to campaign objectives, category characteristics, and customer behaviours.
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Organisational maturity + digital marketing maturity
BCG’s survey of over 200 global brands showed that more than 85% of those in the two most advanced stages of data-driven marketing maturity (Connected and Multi-moment) also have high organisational maturity.
The new study shows that advertisers who apply both technical and organisational best practices get better results. In fact, organisationally mature brands are seeing 1.5 times greater cost benefits and up to 2.5 times the impact on revenue from their data-driven marketing efforts than low-maturity marketing organisations.
In the short term the report recommendations include that advertisers should test the impact that machine learning can have on their specific business. Showing the value of technology will help build support for and investment in new technologies and organisational change. Looking longer term though, companies’ success will require breaking down internal silos, embedding expertise with in-house teams, and establishing strategic partnerships.
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In addition to this report, BCG also worked with the Google Digital Academy to create a Digital Maturity Benchmark diagnostic tool. Any business can now start their own in-depth assessment, see how their digital marketing measures up and develop their roadmap to digital maturity.