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[The Marketing AI Show Episode 18]: AI for CMOs: The 2022 Report
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By: Cathy McPhillips

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June 17th, 2022

[The Marketing AI Show Episode 18]: AI for CMOs: The 2022 Report

Digital transformation is now the core strategic priority for CEOs, with the past 24+ months only accelerating the market shift.

In a survey by IBM, 3,000 CEOs said technological factors were the number one concern for their enterprises over the next two to three years. As a result, 60% say they’re accelerating digital transformation efforts.

This should be good news for CMOs. According to research from The CMO Council, the majority of the C-suite says the essential role of a CMO is to be a digital transformation leader. As companies go all-in on digital transformation driven from the top, CMOs should stand to benefit. But are CMOs prepared?

In this week’s episode, Paul and Mike break down some key findings from our AI for CMOs report, discuss opportunities for CMOs and marketing leaders, and more. Thank you to our AI for CMOs series sponsor, Persado.

Timestamps

[00:06:11] The State of CMOs

[00:10:36] How do we make CMOs care?

[00:15:15] Are CFOs are beating out CMOs as doigital transformation leaders?

[00:22:24] How do I drive personalization?

[00:30:46] The 10-step framework for scaling AI

[00:39:23] But…you do not have to go all in on AI

[00:47:46] Creating a groundswell of practitioners and leaders

Links referenced in the show

Watch the Video

 

HubSpot Video

 

Read the Interview Transcription

Disclaimer: This transcription was written by AI, thanks to Descript, and has not been edited for content.

[00:00:00] Paul Roetzer: Welcome to The Marketing AI Show. The podcast that helps your business grow smarter by making artificial intelligence, approachable and actionable. You'll hear from top authors, entrepreneurs, researchers, and executives, as they share case studies, strategies, and technologies that have the power to transform your business and your career.

[00:00:20] My name is Paul Roetzer. I'm the founder of Marketing AI Institute. And I'm your host.

[00:00:30] Thanks for joining us for episode 18 of The Marketing AI Show. Before we get started, I want to take a moment to tell you about our AI for CMOs series sponsor, Persado. Persado is the only motivation AI platform that generates personalized communication to immediately motivate each individual to engage and act. Organizations that use Persado benefit from an extensive customer motivation knowledge base, enabling them to hyperpersonalize their communications at scale. Clients who incorporate Persado's innovative motivation

[00:01:03] AI increased conversions by an average of 41%. I'd like to increase conversions by 41%. That's pretty legit... unlocking millions in unrealized revenue. So if you're looking for a platform that can drive hyperpersonalization, be sure to check out www.persado.com now onto the show.

[00:01:28] This episode is part of our AI for CMOs series presented by Persado. The idea behind the series is to tell the story of AI and digital transformation through the experiences of CMOs from diverse backgrounds who are leading the understanding and adoption of AI in their organizations. while AI is forecasted, have trillions of dollars in annual impact on businesses,

[00:01:53] many marketers and marketing leaders are just beginning to explore how it can impact their careers and organizations and trying to figure out how to get started.

[00:02:03] I'm joined today, once again by Mike Kaput, our chief content officer at Marketing AI Institute and my coauthor for the upcoming. 14 days from now upcoming or 10 days from now, depending on when you listen to this... upcoming book, Marketing Artificial intelligence: AI, Marketing, and the Future of Business.

[00:02:21] Mike welcome back as always

[00:02:23] Mike Kaput: great to be here.

[00:02:24] Paul Roetzer: All right. Today is sort of a special episode of a special series for CMOs series. What we're going to do today is rather than having a con. Um, so you've had, uh, John Dougherty at Brighton Jones, Andrea Brimmer at, Ally, Um, some incredible conversations, we have more lined up and coming soon.

[00:02:44] Um, but today we're actually going to talk about the AI for CMOs report that was just released last week, The Real World Playbook for Digital Transformation. Now this report was sort of the cornerstone of the campaigns that we had talked to Persado. Last year. I think this started back in 2000. And what year are we in 22, 2021.

[00:03:06] We started this idea that we needed to create this guidebook, like our personal experience. So Mike and I wrote, uh, wrote the report. And so that's kind of why Mike and I are here as the guest today to talk about this. But the whole idea is like, we've, we've talked to a lot of CMOs and they're. Uh, in many cases, just trying to figure this stuff out.

[00:03:28] Like I said, in the opening, there's a lot of marketing leaders at the very highest levels at some major companies that themselves are still trying to get a grasp on what exactly is artificial intelligence. Um, how do we integrate it into what we're already doing rather than stopping and trying to go figure out this whole new thing.

[00:03:48] We talked to them a lot about that. It's just smarter technology. You hear us say this over and over and over again, the AI is just smarter technology. So if you're buying email marketing software, social media management, or ad management or ad creative, or we get it, whatever you're doing already in your marketing department.

[00:04:04] AI just makes it smarter, makes you more efficient at doing your job, makes your team more efficient. So it reduces costs and it, it improves your, your probability of achieving your goals. And so when you think about it as a tool for businesses, It becomes a lot easier to explain and justify internally the need to invest time and resources and figuring this stuff out.

[00:04:26] So that was the idea is we need CMOs on board with this. We need them to know it's okay if they don't understand it because. Don't and make it really approachable for them. And we've had like this intro to AI for marketers class that we've been doing now. I think 12 times we've done it over 4,000 people registered.

[00:04:47] We've had a number of CMOs take that and that's good. Like 30 minutes in like those CEO's hopefully have a really much stronger understanding of what it is. So that was the idea behind this report is like, let's write something. That makes us really understandable for CMOs and gives them a framework to start applying this in their organization and then gradually start kind of scaling it up.

[00:05:11] So that's kind of the premise of the campaign. It's sort of what we want to do with this podcast. We launched the report last week, and then we did a webinar. Uh, as Ms. Stewart and I's as them as a VP of marketing at Persado, she and I did the webinar together. And so we're going to kind of walk through some of the key findings from the report.

[00:05:28] You can download the report@aiforcmos.com for AI, for cmos.com. It is available. Now it's a free download, so you can check that out, but we're, again, we're going to kind of talk through some of the high points. So, um, as I mentioned, Mike, and I wrote this together and the way we're going to do this is I'm going to kind of interview Mike to start on the state of, cause Mike did a bunch of the research on what's going on.

[00:05:50] What are the opportunities for CMOs? We wanted to position this to CMOs, not as a fear factor thing. Like you need to figure this out to save your job, but more your peers. Aren't figuring this out. You can get there first, you can be a leader within this, within the industry, within your company, and you can drive this adoption and create huge opportunities for yourself and your team.

[00:06:11] So I wanted to kind of start off with where are we at for CMOs? Uh, the adoption understanding of AI. So Mike, having done the research, what is the state of CMOs AI? Digital transformation. What did you find out?

[00:06:27] So we did a ton of research across a multitude of different sources, not just in the world of marketing to really understand what was going on here.

[00:06:39] A couple of really important, uh, threads like narratives came out of this from what I'm seeing. And one of the big ones is the importance of digital transformation. Now that's a term that we've heard for years as being important, but we really did find quite a bit of data that appeared to validate the fact that digital transformation is now.

[00:07:03] The core strategic priority for CEOs. I mean, if you think of everything that has gone on over the past 24 plus months, um, the market has shifted and now digital transformation, whether you call it that or something else going fully digital in your operations, as much as possible is the. Executive priority for company leaders.

[00:07:26] And we actually found some data from a survey by IBM, where they talked to probably 3000 different CEOs and they said technological factors were the number one concern for their enterprises over the next two to three. And 60, a full 60% said that they're accelerating digital transformation efforts as a result.

[00:07:50] So really what I take away from that is if you are a CMS, This should be good news. Um, it's very tech focused, but this is very important for CMOs. And the reason being is because our research also found that, uh, according to say, the CMO council who also did a study on this, the majority of the C-suite sees the essential role of a CML as a digital transformation leader.

[00:08:18] When they're asked about what is the CMOs supposed to be doing? Digital transformation is the number one answer. Now we can very easily kind of put those two ideas together. If companies top, top leadership is prioritizing digital transformation, it stands to reason the CMOs should be one of the most important people, probably in the entire company based on that.

[00:08:42] Um, what's interesting though, is the data. Doesn't always reflect that. Um, for instance, like Gartner did a CMO spend survey and they looked at marketing budgets as a slice of company revenue, and they actually dropped from 2020 to 2022. It is up a bit over 2021. Um, but 2021 was the lowest level in the history of this survey.

[00:09:09] And. What was really telling is as part of this data, Gardner found that 83% of CEOs told gardener that they intended increased spending on digital, but less than half intend to increase marketing spend. So really the big takeaway I see here is that CMOs should have this massive opportunity in front of them to drive.

[00:09:36] Unprecedented unprecedented digital transformation at their organizations to be truly a linchpin of the executive team and the most important initiative at the company. But instead they're being kind of underfunded and a bit overlooked and we can dive into some reasons for that. But that's kind of really where I see the state of CMOs and digital transformation being

[00:09:57] as of today.

[00:09:59] Yeah. I know with the IBM study, the 60% of Schiavo. So they were accelerating digital transformation, specifically IOT cloud, cloud computing, and AI, like, I mean, they called out and AI is one of the three fundamental technological areas. And then just this lingering. The concept of digital transformation.

[00:10:17] It's interesting because Mike and I have spent the better part of six years now, um, trying to make AI make sense to people, to make, you know, marketers and marketing leaders, business leaders care about AI to take that first step, to understand it so they could realize the potential it offers to them.

[00:10:36] And, and w we, we've always struggled with like, well, how do we make them care? Like, what. What are the terms that, that would mean something to them because it's often not AI on its own because there is this perception right or wrong that it's like scifi or too technical or whatever it may be. And so digital transformation is not a term.

[00:10:57] That we used very often in the early years. I don't think, I don't remember writing blog posts about, you know, AI's role in digital transformation or anything like that because I've felt, you know, having spent, I mean, I started this industry in 2000 and, uh, I felt like that term was just had, had its day.

[00:11:15] Like, I, I just kind of thought that we had moved beyond digital transformation. I thought that that happened with social media and mobile. And, you know, after that, it was just sort of like. That was w what marketing was, it was digital, but, you know, I think the more Mike and I have looked into it realized that that term still very much resonates with a lot of leaders.

[00:11:38] It resonates with a lot of CEOs, CMOs, and so. You know, we've started to gravitate more toward it, including in the subtitle of this report when we start realizing that no of that is in fact, a very approachable topic that people know they need to continually drive digital transformation. It's part of the fundamental.

[00:11:58] Purpose of their jobs. And so talking about AI's role in the ability to accelerate the digital transformation, build smarter digital transformation is something that we've really started to kind of latch on to and build more messaging and content around because it matters to the CEO's. And if it matters to the CEO, It should matter to us marketers.

[00:12:20] That's what we've all learned is, you know, you need to pay attention to what's driving the business and then, you know, construct what we're doing as marketers around those goals. So, um, yeah, so I just kind of a commentary on digital transformation as a whole. So in the research and like, w what were we seeing as.

[00:12:39] The obstacles for CMOs to be leaders to be perceived as leaders. What did you come across there?

[00:12:45] Mike Kaput: Yeah, there's a few big things here that we found. And personally, I found them actually pretty surprising because it, you know, it made perfect sense to me that CMOs should be very high up. If not the top person driving digital transformation, you and I have seen.

[00:13:01] Basically our entire careers, the impact of technology on marketing and how important it is. Um, however, we found a couple of surveys that were a little shocking, um, like for one, uh, Rackspace conducted a survey of over 1400 enterprise leaders and employees. And as part of that, they asked them who in the entire, C-suite not just mark.

[00:13:27] Had the best and worst understanding of technology at the company and CMOs were ranked second, last, I think the last one was like chief revenue officer. So I kind of relate yeah. Something like that. Um, and that was, that was pretty shocking to me. Um, based on that, it doesn't seem like CMOs are perceived within certain companies, at least at enterprises.

[00:13:52] Being at the forefront of technological change. And you know, what's actually interesting too, is that you might think, okay, well maybe they don't have to, but actually. C-suite executives that were surveyed by CMO council actually said that marketing leadership's number one gap in their work is the modernization of the marketing organization, its systems and its operations.

[00:14:18] So you literally have many people that are not marketers at the company that are in positions of power and influence say. The CMO is one of the worst at understanding technology. And we're also frustrated with how, uh, technologically not advanced our marketing programs and departments are. So I thought that was really surprising to me.

[00:14:43] And the next data point didn't surprise me after, after. Letting this seep in and, you know, IBM as part of that study asked CEOs like which members of the C-suite would play the most crucial role in your organization over the next two years. CMOs did not do well here either. So CIO's, and CTO's were mentioned as more important twice as often as CMOs and CFOs and chief operating officer.

[00:15:15] Also beat out marketing as digital transformation leaders, which operations makes a little more sense to me, but the fact that even the C CFOs are, you know, beating out the CMO as digital transformation leaders, it seems a little crazy to me. I mean, it's just unreal. How CMOs are being perceived within organizations.

[00:15:38] But then we get to kind of, okay. So like, why is this happening? Aren't CMOs running sophisticated marketing campaigns. Aren't they embracing new technology? I mean, aren't they going fully digital essentially, as part of, like you said, marketing is just digital. Now the weirdest thing is gardener. Surveyed, uh, marketing leaders and said, okay, what are you focused on in terms of your improving your professional capabilities over the next, like one to two years only 38% of marketing leaders said that they wanted to increase digital know-how.

[00:16:18] So that's a pretty broad term, but that was the technology. Thing that Gardner asked about instead, CMOs and leaders were more focused on professional capabilities like branding and messaging. There's no doubt. Those are important. But the fact that almost basically a third of people really were the only ones that wanted to improve digital skills.

[00:16:40] And you've got all of this. Uh, mistrust that CMOs are ahead of the curve from a technology perspective, that seems really kind of like a perilous position to be in. I mean, CMOs are still really important to digital transformation they're in the conversations, but it kind of seems based on this data that they're cloud and resources to be digital transformation leaders are, uh, really waning, um, and could be under threat in the next couple of.

[00:17:12] Paul Roetzer: And I'm not saying there's a cause and effect here. Um, but we also saw the chief marketing officers, average tenure in their posts held study flashed year at 40 months on average, um, the lowest level in more than a decade. So, you know, they're not, not sticking around long enough now, or they're not sticking around long enough because they're not seen as valuable in the digital transformation equation.

[00:17:40] Or is it not related in any way or are they not there long enough to drive the digital transformation by the time they get that? They're off to the next thing I don't know, like, but it's just an interesting data point that the CMOs aren't sticking around very long. I think CEOs on average have a tenured to two X that of the CMOs.

[00:18:02] So, you know, the transitional nature of the CMO position, um, could potentially play a role. Uh, how they're perceived. Um, so I mean, how do you, how do you see AI fitting into all of this Mike in terms of where we're going as from a CMO role and, and, and what they need to be thinking about? So I think you

[00:18:22] Mike Kaput: hit on it before, when you mentioned that, you know, according to IBM research AI was called out as one of us, small handful of technologies that COC as being absolutely critical to making digital transformation work.

[00:18:36] So. Actually in that research. 82% of CEOs at companies that outperform their competitors. 82% of those CEOs championed AI technologies. Now that's a broad term. They champion things such as chat bots, voice technologies, natural language processing, a whole suite of different AI capabilities, but literally 82% of the CEOs at these companies that were beating the competitors in their market were looking to AI to help them.

[00:19:10] And if we, we also looked at some data from PWC and they showed that 86% of professional. At companies just across different disciplines, say AI is going mainstream at their company. So that really connected the dots for me. As you know, previously, we're kind of talking a little more high level about, okay.

[00:19:32] CEOs think digital transformation is super important. CMOs are perceived poorly in terms of technology and technological know-how. But CEO's, I really think based on this data are using digital transformation as a proxy to say essentially artificial intelligence, or as we say sometimes to create a smarter business.

[00:19:55] And I think like the way this fits together is AI is the piece of this. Give CMOs the massive opportunity to be digital transformation leaders. And it's not like, okay, you got to go learn. Excuse me. I got to go learn about IOT cloud, quantum computing, whatever. I mean, there's too many things to keep up with, but the fundamental technology underlying a lot of this stuff is artificial intelligence and CEOs know it and they're seeing benefits from it.

[00:20:27] And the employees overwhelmingly understand. No matter, even if they don't fully understand the technology yet they know it is going to impact their work and the company's goals. So if CMOs can get a really solid understanding of what AI actually is and what opportunities it presents, I think that is really kind of key.

[00:20:53] To getting in the door as a real digital transformation leader. Honestly, every CMO should be the AI champion realistically at their company. You know, I mean, we we've quoted this number quite a bit, but it's really, really important. We look at McKinsey data that tells us AI is projected to create, you know, one to two, almost $3 trillion of value in marketing and sales alone.

[00:21:19] So if your CMOs sitting here saying, okay, like AI is just another thing I need to learn, I have to do marketing. AI is going to be marketing. I mean, it is the top use case for the technology within a business, more than any of the. Areas of the business that aren't directly say, if you sell an AI product, for instance.

[00:21:39] So it really seems like AI is the key to everything for CMOs that are lagging behind very quickly. And I think the cool thing is, you know, not to be all doom and gloom. I actually think it's a huge opportunity because you and I done tons of work on this. You really don't need to go. Get a degree in artificial intelligence and machine learning engineering, or really do much more than understand a few key concepts and start experimenting with real world use cases to actually get started in a meaningful way

[00:22:15] Paul Roetzer: with.

[00:22:16] And I think you just need to understand what it is, what it's capable of doing, and then who on your team or your outside advisor network. You need to be bringing into the conversations to solve business problems more efficiently and to unlock creative possibilities that you didn't previously know were possible.

[00:22:34] And so to do that, yeah, you don't, you don't have to be able to build the machine learning models, use it to know what machine. Does. So when you look at a problem, talk about Persado in front, like hyper personalization. How do I drive personalization? It's not through tokens, the first name, last name company in the email, and then sending the same email to a hundred thousand people with different names.

[00:22:55] That's not personalization like those personalization in 2010, maybe, but a decade has passed. There's there's much smarter ways to do personalization and predict outcomes. And I think that. If CMOs don't understand that if they're taught touting personalization and they're building conversational agents on their site, and you know, they're doing these things where.

[00:23:20] They don't even understand the underlying capabilities that AI could enhance these things. That's, that's the starting point, just being able to have the basics there.

[00:23:28] Mike Kaput: So, yeah, I think that's really interesting in the context, too, of what we mentioned in the description of Persado, where they're saying, okay, you know, you have an ability to increase conversion rates by double digits.

[00:23:40] It's like if your CMS. You're already trying to do that. Like how many other, how many traditional approaches or technologies are going to bump conversion rates by that much, AI is just a smarter way to do and actually achieve what CMOs are already trying.

[00:23:58] Paul Roetzer: So we have a 2022 state of marketing and sales, AI report coming out at the end of the month that we did in partnership with drift.

[00:24:08] And so Mike has actually been, uh, in the lab for say, Working on the data crunching. Um, we don't have AI that figures this out for us. We'd love to say they, I just like figured it out and writes the report for us, but it's actually humans that analyze the data for that report and then publish it. Um, so what did we see?

[00:24:28] There's kind of a little bit of a preview, I guess, of some of our data, but we did ask a question that we did not ask last year and that. I think I'm paraphrasing about who in your organization owns, um, AI adoption basically. Um, and the options were like chief market officer, chief digital officer to CIO CTO.

[00:24:48] I don't remember who else we had, but, um, what did, what would we kind of learned the preview? Not final data yet, but a little preview of, of what our reporters.

[00:24:58] Mike Kaput: Yeah, for sure. And keep in mind, this was probably a sample size of, probably about, I want to say 500 plus marketing leaders. Um, mostly I'm majority were director level and above, so you're probably looking at higher levels of the company and decision-makers.

[00:25:13] And when we asked them who at your company owns AI adoption implementation? You could actually pick multiple people. And that's really, the reality is there's probably multiple C-suite roles involved in actually applying AI across the business. But what was fascinating is 33% of these respondents said the CMS.

[00:25:39] Is responsible for this at their company. They own it. And they either solely own it, or they own it with other roles in tandem. And almost 20% said the CMO had sole ownership of the adoption and integration of AI technology for marketing. So I think that's really telling in the sense that out of all the titles, the COO was far and away, the most common owner of AI.

[00:26:06] So. That should say something about the importance of AI to the role of a CML. Um, but what's also really interesting as the other answers. So the responses were pretty varied among different roles, but you're probably looking at about nine, 10, 11% for each of these roles. For instance, 9% said the chief technology officer had sole ownership.

[00:26:30] And another 10% said the CTO shared AI ownership with other roles. So that's 19% total. That was the second highest one. So if you're a CMO looking at us and you're saying, oh wow, okay. AI ownership is a massive opportunity. You are probably going to be working with your chief technology officer in some way.

[00:26:49] So it's that really important understanding that not only do you need to own that. But at owning, it means you're probably going to be working hand in hand or should be and partnering with other C-suite roles in your organization. And I think, lastly, what was super interesting is that almost 20% of respondents were not sure who owned AI in their organization.

[00:27:15] And my guests, I can't say for sure is that those are probably 20% of organizations where the CMO should be owning AI. But yeah.

[00:27:23] Paul Roetzer: And I it's funny, like, I, I didn't when we asked the sir, put the survey out in the field, I did not sit there and take guesses at the responses we would get on this one. I would have pegged, not sure who owns it and their organization to be closer to like 40 or 50%.

[00:27:40] Like if I, if I was a guest, it just wouldn't shock me at all. If people did not know. Who it was. And honestly like the people who said they do, you probably just guessing that's probably our CMO like edited. It's just, it's interesting perspectives. Cause if you ask, you know, the CEOs, do they answer the same way?

[00:28:01] I mean, you're asking marketing people. So the marketers, you know, 33% say the CMO, huh.

[00:28:07] Mike Kaput: And if that's happening, if that's not happening and they're assuming that CML that tells you that kind of in my mind is a similar. Uh, scenario to what we just talked about is like the CMO might not even know that they're supposed to be owning this technology, which is the key to every part of digital transformation yet other people at their company may very well assume they're the ones doing

[00:28:32] Paul Roetzer: it.

[00:28:33] See, now I would, we can't do it the data to this year, but I would be fascinated. To ask a leading question into this one that says, does your organization have a chief digital officer? Because my guest and this is purely a guess? Well, it's a, it's an educated guess is that if an organization has a chief digital officer, maybe chief digital and marketing or chief digital and data, whatever it may be, then my guess is 70% plus.

[00:29:07] That's who owns it? I think that, again, I'm not the CMO. Like a lot of times what we're seeing is it's just, it's not the COO and again, it could be for any of the reasons Mike outlined to stop. Like, they just, they don't know the stuff. So they're not relied on heavily or there's other people in the organization, but that, yeah, I mean, I think our whole point in the presentation we gave it in the report is like every CMO can though, like there's no, there's nothing preventing you as a marketing leader or an aspiring marketing leader from being the one that does this.

[00:29:38] Cause you do not have to go back to grad school to get this degree. You can, you can take an intro course that we offer for free. You can come to our marketing AI conference, you can read our book, you can read the algorithmic leader. Like I give me 10 hours, 10 hours of like a bootcamp. And I bet we could, we could build a bunch of CMOs who could lead this in the organization.

[00:30:00] Like it's, it's not a heavy lift to, to really understand and apply AI.

[00:30:05] Mike Kaput: Yeah. And I think that's really, like you said, the entire goal of this report is really for CMOs, not saying like, Hey, you're impossibly far behind or like, Hey, like this is, you guys really need to really, you know, accelerate what you're doing.

[00:30:20] We get like CMOs have one of the most important jobs in the organization. It's really more the opposite showing, you know, go read this guide, maybe take a couple of our classes or courses or come to Macon and you're there. You're going to be able to see. Owning this and you, you know, ongoing as you get more complex projects, of course, you'll probably need a little more work on it, but you can start owning it very soon.

[00:30:46] Paul Roetzer: All right. So then the report kinda, um, ends with, and it's like half the book, but, uh, an excerpt from our upcoming book. So the marketing artificial intelligence book chapter 15 is called scaling AI. And so what we did is we actually took the 10 step framework from that chapter and then wrote some original stuff around it.

[00:31:11] But using that. Okay. If you're the CMO, when you go through this, okay, I can do this. Like I can figure this stuff out. This has to happen one way or the other, what are, what do I have to do now? We just basically created this framework to help you understand and walk you through it. So our thought was to just quickly walk through these 10 steps again, download the report after cmos.com and you can get.

[00:31:33] Do this, or grab the book and read the full chapter, which has much more to it as well. Um, but we want to do is kind of run through these and I'm going to run through these pretty quick. If Mike's got some input or wants to stop and ask questions, we'll do that. Otherwise, I'm just going to kind of hit these 10 points and then, uh, we'll wrap up this episode.

[00:31:51] So the first is to think strategically. And what we mean by this is you have to understand that AI again is just smarter technology, but if you're buying any marketing technology, marketing sales service, doesn't matter. It has to survey a business role. There has to be a reason to have it. It's not just because it's AI and it sounds cool.

[00:32:12] And you want to be able to say you're using AI tech, it's got to have a strategic purpose. So some of the things we talk about with like, I'm buying this tech, because it helps me achieve X, Y, or Z. So it could be accelerate revenue growth. Personalizing consumer experiences, driving costs down, generating a greater return on investment for your, your spend is like ad spends a great example.

[00:32:33] Here. You can get more out of your ad spend that's we all want that. Um, getting more actionable insights out of your marketing data. We all have dozens. If not hundreds, I heard a stat recently that the average marketer has 107. I think it was SAS products in their tech stack, just wild. Every one of them produces data that we should.

[00:32:53] Process and act on. So just getting insights out of that, having the machine, tell you what it's seeing and you get to act on it like that. That's awesome. Um, predicting consumer needs and behaviors and intelligent automation of repetitive tasks, those are all really good reasons to be thinking about buying AI technology.

[00:33:14] Um, the second one view data as essential to success. There are AI tools. You can buy that you don't need any of your proprietary data. So we always get asked this question, how much data do I need to take advantage of AI? Do I need to be a big enterprise? No. Depending on your use case, you might be able to start over.

[00:33:32] Two minutes after this podcast episode go find an AI tool that does subject line writing, or, you know, copyright, whatever it may be. And you can get started right away. You don't need a bunch of data, but if you're scaling it and if you're, if you're a CMO or a aspiring CEOs, At a larger organization, you have to understand the data, go have access to how that data is structured, who owns that data, how that data is integrated into everything you're doing.

[00:33:59] So data is the foundation of scaling AI and honestly, successful marketing moving forward. And the challenge of first party data versus third party data and the reduction of access to third-party data. Like there's, this is a whole. Probably podcast series is AI for data. Uh, I know we have a couple of really great sessions on this at the marketing eye conference coming up in August.

[00:34:24] I think Chris Penn is doing a session on this. I think, um, Tim Hayden is like web three readiness, but I know it has a data component to it in privacy elements. So data is just critical, but again, you don't have to be a data scientist. You just have to understand how to talk to those people and how to integrate data into what.

[00:34:44] The third is becoming an informed buyer of AI powered technology. And again, we try to explain to people you don't need AI, you need smarter technology. So if you're buying email marketing, ad management, whatever software it is, you need smarter versions of it. And that means you need to understand how the vendor.

[00:35:08] Uh, builds the software and how AI makes it smarter over time. So it reduces the amount of time you need to be spending using that technology. And then as the software gets smarter and learns, as new data comes in, you need to understand the implications of that to your team. And if like, let's say you buy a conversational AI software, like some conversational agent for your site in the first three months, you may.

[00:35:34] One or more people on your team to train the conversational agent. What is a good answer? What's a bad answer. Be watching it in real time. Like human oversight, human in the loop stuff where you're looking at the interactions it's having and say, no, no, no machine. That was a bad answer. Here's what you should have done it.

[00:35:50] And you're training the machine and then four or five, six months in, maybe the machine is getting pretty good. And like 90% of the time it's doing its thing. Well now what do you do with the people who are the conversational. People like they don't need to do that anymore. What do they do? So you have to understand this.

[00:36:06] You need to be working with vendors that understand this and help you onboard the software, help you train your team and help you as you evolve. What does that team look like as a result of the software? So it it's really hard to do though. Like most people can't ask the right questions of this. And so in our book, I think it's in the marketer to machine scale chapter, which is like chapter three or four, We actually offer, I think it was like two or three dozen questions to ask vendors.

[00:36:32] It's like, Hey, if you're going to buy smarter technology, here's what you need to be asking them. Because again, if you haven't done it, you have no idea what to ask. So we just kind of make that a part of the book.

[00:36:43] Mike Kaput: So, Paul, I want to jump in here and ask you a quick question because a component of this too, I think a lot of CMOs just getting started with this topic would be surprised maybe to learn that sometimes.

[00:36:56] Vendors who claim they use AI or machine learning don't always use it or are it's maybe over-hyped or potentially even some of their sales reps that you're talking to might have an imperfect understanding of what a solution can do. Can you speak to that a little

[00:37:14] Paul Roetzer: bit? Yeah. It's, it's extremely common that, um, like I'll often say.

[00:37:20] You know, they, they can make these claims about AI and it might just be because they're marketing and salespeople have been told those talking points by the engineers and they don't understand. So they just regurgitate what they're told. Um, or it could be that they're just trying to claim they're using AI when they're not really.

[00:37:38] And maybe it's just like some very small piece of in conversational agents is a good example here. Like there's a lot of people who think chat bot equals AI. And the vast majority of the time it does not, it is just human written rules. It's branching logic, but maybe there's some natural language processing in there where you put text into the chat bot and it, it tries to understand your question.

[00:38:06] And then based on that, understanding it, tags it into here's the response to give this person, but the machine's not learning. It's not getting smarter. It's not ad-libbing. And like coming up with some response that a human hadn't taught it, there's no real intelligence in the chatbots. So that's an example.

[00:38:23] If you're a major enterprise and you're driving a conversational AI strategy, like you need to make sure it's actually AI, that it's actually going to get smarter. It's going to learn from its own answers and you know, how users rate the answer. Those answers are what actions people take as a result of them.

[00:38:41] It's a whole different world to build an intelligent, conversational agent. And that applies to pretty much. Piece of software. We used as marketers. So knowing what AI is and how it works, and what questions to ask is really important, especially when you're making core technology decisions. And some of these technologies aren't cheap.

[00:39:01] Like there are very affordably iced solutions, but many of them are not. And you could spend a lot of money to realize that it wasn't in fact much better than you doing it by. Tell us a good point. Uh, the fourth highlights, uh, prioritize, use cases to pilot and the idea here. You don't have to, what does it boil the ocean?

[00:39:23] Is that the saying people have, you do not have to go all in on AI. You don't have to become an AI first marketing organization overnight. You need to find tactical things that you or your teams spend a bunch of time doing that are repetitive data-driven tasks. So. Segmenting email databases or figure out what subject line to use in an email or send time optimization of an email or what CTA to use or building landing pages.

[00:39:50] Like these very tactical things that we spend dozens, if not hundreds of hours collectively doing each month. And you say, well, let me just start by intelligently. Automating. A couple of those and ones that I'm pretty confident will save us time and money. Like it's pretty, pretty easy to look out three months from now and say, that's going to have had an impact on our business in a measurable way.

[00:40:11] And you want to stack those success stories. So to make the bigger play and to eventually scale AI across the organization, you need to start where you can have success. And then start to build confidence and prepare your team and train your team. And that's really what we mean when we say, uh, prioritizing use cases to pilot.

[00:40:32] Uh it's it's the starting point for most organizations. And there is, uh, tied to the book. Um, there will be on the book site, which is just marketing. Hey, I booked.com. I believe it was the URL for book. You can find on the marketing Institute site as well. Uh, but there will be a download there to get our piloting AI workbook, which will walk you through building.

[00:40:56] Uh, uh, a list of activities or technical things that you could intelligently automate, and it kind of teaches you how to do that. So we talk about that pilot, any I work book in our book, um, and then you can download a free version. Um, the fifth diff defined priority business goals and challenges. So again, this goes back to this whole idea of you have to be able to measure your success.

[00:41:20] You have to be able to quantify why you're doing this. And so this, again, we talk at a very high. Two main reasons you do AI technology, reduce costs, accelerate revenue growth, the two main ones. Now there's other reasons, and you can kind of cover some of those in the first step. Um, but here, what you want to do is as you try and figure out where to start, you look around and say, well, where are the biggest cost centers right now for our marketing team?

[00:41:45] Where could we reduce cost, increase efficiency or. Where do we think we'd have the greatest impact on driving growth for the company. And then you look at smarter ways to do those things. Um, so define priority business goals and challenges, and then you align AI with those. The sixth is, uh, educate and engage leadership.

[00:42:05] So if you're in an organization where the C-suite does not understand, AI doesn't think it's necessary or thinks that maybe. Additive to what you already doing. Like, oh, you want us to go solve this too? Like we're already dealing with these other big challenges. They need to understand what it is, how you're applying it, the logical process you're taking to do it, but they also need to be on board if it doesn't work because AI is still very early, the industry is still at the early adopter phase and you're going to run pilot projects that don't work.

[00:42:37] Hopefully you don't. Big scale projects that don't work, but like any tech you're going to buy some tech where you either don't use all the features in it, or you just don't get the value out of it. And that's okay. Like you need to be in an experimental mode with this technology because the potential of it to drive disproportionate returns is so.

[00:42:57] You have to be willing to take some of the risks early on that things don't work. And I mean, Mike, and I've been doing this like again, if you don't know our background. So I owned an agency for 16 years that I sold last year. And Mike was with me for nine of those years before he moved over to the Institute with me.

[00:43:13] Um, and we were experimenting with AI tools going back to 2015, 16, and there's someone we put tens of thousands of dollars into before we realized it wasn't even really AI. Like we learned this the hard way ourselves. It just doesn't always work the way it's promised to. And that's part of the reason we can talk about this stuff the way we can.

[00:43:31] Now, it's like, we've done it for like seven years. Been trying to figure this industry out. So, um, that one probably resonates with you might have, you'd have to educate me cause you're never going through it together. But we have, we were on the agents. We had clients that were asking us to help them with AI.

[00:43:45] And it was a similar thing. Like we had a client one time, it was like, how much would it cost to put AI in everything? Like just our whole marketing position, AI. That's not a thing. That's not how this works and we'd educate them and teach them what it was and how you could apply. Um, seven, re-imagine your marketing team.

[00:44:04] This is a little longer play, but I was actually gonna have a conversation today where this came up, like, what are those roles of the future look like? When is the demand going to be there for it? So we at the Institute, I mean, 32,000 subscribers. I use that term generically to mean opt-in contexts.

[00:44:19] People downloaded our content or subscribed to the newsletter, attended webinars. And the question I think about a lot is like, when, when are you going to see the inflection point where brands want to hire people with this knowledge that they want to go seek out? Content strategists who understand AI, like you, you start seeing that as a bullet point in the description, we want people have a strong understanding of artificial intelligence technology and what it's capable of doing, like when that starts appearing in job listings, because the people who are moving now to seek out those smarter, um, the smarter talent, the people who have explored this and taking certifications on it, things like that, it's going to change the structure.

[00:45:04] Marketing teams, but so is what's possible like a marketing ops person, AI ops, who just looks across all the different areas of marketing tries to find more efficient ways to do things or an AI trainer. The example I gave of the conversational agent, a human has the train, the AI in almost every case, the human is going to oversee the training and performance of the artificial intelligence.

[00:45:24] That's not a role that exists today. Like a marketing AI specialist or a chief algorithm officer. I don't know what the rules are going to be, but it's going to look different. Um, you know, if you're like a stitch fix, we use that example in the book that the higher astrophysicists. So people who are modeling the cosmos, like building models of the universe now, personalized clothing, like for stitch fix.

[00:45:50] And that's just very forward looking, but this whole idea of like, who are the smartest people that can build personalization models. They're, they're not the data scientists analyzing. Your analytics, like it's not the same person. So it, it might be you're hiring from completely other disciplines. If you're worried about you're a big brand worrying about ethics and bias and data sets like you might be hiring ethicists to work on your marketing team to make sure that what you're doing stays on brand.

[00:46:18] Like, I don't know, but it's going to be fascinating for the next five years to see as that emerge.

[00:46:24] Mike Kaput: I want to ask you here, Paul, if you think in addition to that, is there any, I mean, shorter term play here? I mean, I think you could probably make a decent argument that for a lot of marketing professionals out there, both, you know, up and coming professionals and established leaders, being able to at least speak credibly to this stuff and say on your resume or in an interview or something that you have.

[00:46:48] Some know, baseline knowledge of what's possible here in using AI to actually get marketing results. It may not be tomorrow the job mentioning AI, but I think you, you would be hard pressed to find a lot of companies that wouldn't at least find that

[00:47:04] Paul Roetzer: interesting. Yeah. I, I mean, we've talked about that.

[00:47:09] Interns we've had at the Institute and at the agency that knows stuff that their professors don't know in college to be able to sit in an interview and say, oh, you're using HubSpot. Are you using Adobe? Are you, are you using this technology that lets you generate content faster? And the person interviewing them is using what?

[00:47:28] And like what, what, how, how do you do that? And all of a sudden, like how do you not hire that person? So there's, I think about. This is adoption and the need this talent in a few different areas. One is the brand driven. So the CMOs get it. And they then seek out talent that has this knowledge and capabilities.

[00:47:46] Another is higher ed driven, where the universities are actually integrating this into the curriculum and experiences. And then the, the bottom up, which is the grassroots, which is more, what we've been doing with the Institute is just trying to. Create a groundswell of practitioners and leaders who are seeking the knowledge and trying to do this and change the industry from the ground up in essence, where those people become so good at their jobs, still efficient at their job.

[00:48:15] They get the promotions and all the sudden the personalization manager is now the VP of personalization. And they got there by using AI tools and. There's so much better at their job than anybody else. It's like, well, just keep promoting that person. That's going to take time though. So, yeah, I think you got to come at it from a lot of different angles and that's why we're doing like an AI for CML is like, let's teach the leadership what it looks like.

[00:48:40] And then intro to AI for marketers. Let's teach anybody from an intern to the CMO who wants to learn this stuff to come in. And so at the Institute, we're trying to approach this from a lot of different angles in partnership with vendors to want to, you know, also create more educated buyers and, and help, hopefully in partnership with associations.

[00:48:57] Like we're not working with them. Public relations society of America. I started out in PR like they, they should be teaching this stuff to PR and communications professionals. We have a chapter in the book dedicated to that, that area. Um, you know, ad associations, mark AMA, like they should all be teaching their members this stuff because it will make them better.

[00:49:18] Marketers, it'll give them a chance to advance their careers. And that's what those organizations exist to do. So, um, number eight, train your team and explore eight together kind of fits in that same mold. Like involve them. You don't want them to be afraid. So, if you're taking the leadership of adopting AI, you want to be very early on teaching them what it is and showing them how it's going to transition their roles and giving them a stake in that and helping them feel like they're defining the future, not being told what, what that looks like.

[00:49:49] Um, number nine, focus on mutual learning between humans and machines. This one's a little abstract until you unpack it. But I said earlier, the humans have to teach the machines. Like they, they learn from inputs, from data. They learn from being told they're doing a good job, like reinforcement learning. Is that an actual term in the industry?

[00:50:09] It's like, okay, you did a good thing. We're going to give you points or we're going to say yes, that was the correct answer to give the person, asking the question on the website. So there's always this element of humans being in the loop and train the machine. But humans can also learn from the machines have become better marketers and business people.

[00:50:26] There's the example I like to give an AlphaGo, which is an amazing documentary about, um, AlphaGo, which a machine built by Google deep mind that defeated the world champion go player at least Seattle. And in, in this documentary. Uh, so it all talks about how the machine made him a better gold player by, by losing to this machine four games to one.

[00:50:50] Um, he learned something about the game of go. The, the machine made moves in ways he'd never fathom, but have never considered as a human. But now he looked at the game of go differently and he became a better player as a result of it. And I think there's going to be a lot of that as humans. Start to embrace the fact that the machines are really good at predicting things that really good at recommending actions and behaviors.

[00:51:12] And if as the marketer or business leader, you can start to say, well, why did it make that recommendation? How did it arrive at that audience? Like, I would have never thought to target that audience, how, how in the world that had to come up with that. And then you start to realize how the machine learns and behaves and you realize like there's a lot to be learned from.

[00:51:30] From AI. And so I think the organizations that embrace that and integrate that into their processes are just going to have a massive competitive advantage moving forward. And then the final number 10 is consider how AI can make your brand more human. Again, another sort of abstract idea here, but the premise is in part of like the whole mission of our Institute.

[00:51:54] Um, you know, we had this tagline for the conference, more intelligent, more human, and that the idea. If you can apply AI in all these areas, if you can free up your time and money, that you can reinvest that in uniquely human things. So rather than spending a bunch of time sending out personalized emails or figuring out how to personalize them, and AI can do that for you.

[00:52:16] You now spend your time doing personal outreach through LinkedIn, where you're actually engaging with people and connecting with them and saying, how can I help you? Um, that's a real simple example. You can invest your time in the community, doing more work there. You can apply empathy to what you do, and you can think about that application.

[00:52:35] So it's just the whole concept of. Use AI to do what it does really well, which has repetitive processes, data-driven tasks. Then take the time you free up and rather than reducing head count and finding ways to just continually cut staff and cause. Re-invest that time and money and energy in doing good in the community.

[00:52:54] Doing good for your employees, doing good for your customers and doing the things that remain uniquely human, which generally speaking strategy, creativity to a degree, we could have a whole episode on that. Um, empathy, you know, those are some fundamental skills and traits that just the machines don't have.

[00:53:12] So. So there we go. So I'll run through them. One more time. We had to step one, thinks strategically step to view data as essential to success. Three, become an informed buyer of AI powered technology for prioritize use cases to pilot five, define priority business goals and challenges. Six educate and engage leadership seven.

[00:53:37] Re-imagine your marketing team eight. Train your team and explore AI together. Nine focus on mutual learning between humans and machines and 10 consider how AI can make your brand more human. So again, AI for cmos.com, you can get the full report. Uh, the marketing AI conference, we mentioned a couple of times, may con is going to be August 3rd to the fifth Cleveland convention center.

[00:54:02] Um, at that conference, we have a pre-conference workshop and optional workshop that is the next gen leader workshop. And we'll go through a lot of this kind of stuff and go much deeper on what it takes to be a next gen leader, uh, at that workshop. So we hope you'll join us. It's just, uh, www.maiconmaicon.ai for more information about the event.

[00:54:26] I'm going to, hopefully it's been really helpful. Like if you're, if you are a CML, awesome. We'd love to hear from you. We're always looking for stories to tell. So if you're doing this stuff, reach out to Mike and I on, on LinkedIn. If you're just trying to figure this stuff out, then just join the community.

[00:54:39] Be a part of it. Keep, keep being engaged and let us know how we can help you on your journey. Any final thoughts on your own mind?

[00:54:47] Mike Kaput: No, I think we've covered a lot of ground today. I would just encourage anyone who is interested in the material here to go download that report at aiforcmos.com. There's tons more material, and we didn't even get into all the different use cases by AI categories, marketing categories.

[00:55:03] Go check.

[00:55:05] Paul Roetzer: And then just, uh, I, I suck at the call to action for the podcasts. I always forget to like my kids watch all these videos on like YouTube and stuff, and there's always like, oh, let me make sure to give it a like. I never did, but I'll do it this time. If you're listening to the podcast, be sure to give it a like, subscribe, whatever you do for podcasts.

[00:55:23] Um, this, we also publish these as YouTube videos. So if you, if you want to see Mike and I, for whatever reason, while you're listening, You can watch the YouTube video as well. Um, or if you're on YouTube and don't know those podcasts, there you go. It's over there on the podcast networks. So, yeah. Um, definitely be back.

[00:55:41] We try and do this weekly. Um, if not a couple of times a week on the podcast, so stay tuned coming up. We've got, we're actually going to break down the piloting AI section of the book. We're going to do AI for analytics and for communications and PR AI for email marketing air for content marketing. So we're gonna do an episode dedicated to each area.

[00:55:59] We do. AI for advertising already. That was, I think the episode 17, if I'm not mistaken. Yeah. So that one's there and we're just gonna keep on packing this stuff. And again, our whole mission is to make this stuff approachable, actionable, and accessible to marketers, whether you're the intern or the steamer.

[00:56:15] So thanks for coming along on the journey. Continue to be curious and explore AI. And we will talk to you again next time on The Marketing AI Show. Thanks Mike. Thanks Paul. Bye.

[00:56:28] Thanks for listening to The Marketing AI Show. If you like what you heard, you can subscribe on your favorite podcast app. And if you're ready to continue your learning head over to marketingAIinstitute.com. Be sure to subscribe to our weekly newsletter. Check out our free monthly webinars and explore dozens of online courses and professional certifications until next time, stay curious and explore AI.

About Cathy McPhillips

Cathy McPhillips is the Chief Growth Officer at Marketing AI Institute.

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