Episode 283

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Artificial Intelligence (AI) is a hot topic but many agency owners wonder how, exactly, it can benefit their shop. They get how it works but they think that either a) they don’t understand it enough to deliver on it for clients or b) they can’t afford the AI tools out there for agencies. The truth is – now is the time to experiment. Most agencies are at the infancy stages of learning about AI and how to use it to serve clients better. But we have to get up to speed or we will find ourselves left behind. The good news? It’s within your grasp.

It’s with these challenges in mind that I was inspired to reach out to RJ Talyor and have him on the show. RJ’s SaaS company, Pattern89, works with agencies and brands and improves their ad effectiveness and efficiency by measuring over 49,000 characteristics of a digital ad. With that data, they can provide insights on what’s working and what isn’t, as well as the predicted shelf life of any ad. Through their analytics, they’re also able to predict with over 95% accuracy whether or not a piece of creative is going to work.

In this episode of Build a Better Agency, RJ and I discuss the many ways AI insights are quickly becoming a necessity for agencies of all sizes. We look at the specific data it can provide, as well as how an agency can begin to experiment while convincing even the most dubious of clients of its importance. We also talk about the way the creative life cycle is changing, how agencies approach AI wrong, and what is coming next in the world of artificial intelligence.

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev, or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

AI for marketing

What You Will Learn in This Episode:

  • The specific data AI for marketing can give to an agency
  • Why AI doesn’t undermine creative
  • How small to mid-size agencies are leveraging AI marketing insights
  • Why AI is quickly becoming a need-to-have for agencies of all sizes
  • How the creative life cycle is changing
  • How iOS 14 is changing the way marketing will work
  • Why the speed of change is disruption A/B testing
  • Ways agencies can begin to dip their toes in AI
  • Where agencies get AI wrong
  • What is coming next in the world of AI
“Beauty is in the eye of the algorithm.” @Pattern89 Click To Tweet “Data sits between creative and performance.” @Pattern89 Click To Tweet “In three to five years, AI is going to be everywhere.” @Pattern89 Click To Tweet “The idea of evergreen creative is going away.” @Pattern89 Click To Tweet “Data can help an agency guide a client over a subjective opinion.” @Pattern89 Click To Tweet “We always have to be at the point where we’re predicting what is coming next.” @Pattern89 Click To Tweet

Ways to contact RJ Talyor:

Additional Resources:

Speaker 1:

It doesn’t matter what kind of an agency you run, traditional, digital, media buying, web dev, PR. Whatever your focus, you still need to run a profitable business. The Build a Better Agency podcast, presented by White Label IQ, will show you how to make more money and keep more of what you make. Let us help you build an agency that is sustainable, scalable, and if you want down the road, sellable. Bringing his 25+ years of experience as both an agency owner and agency consultant, please welcome your host, Drew McClellan.

Drew McClellan:

Hey everybody, Drew McClellan here from Agency Management Institute. Welcome back to another episode of Build a Better Agency. I’m excited to share with you the insights that our guest is going to have for you. He’s got a really interesting lens and perspective into the business. Speaking of an interesting lens into the business or perspective, I want to remind you as we are rolling into 2021, I want to remind you that we have a tool on the website, absolutely free for you to use, that will allow you to do your own looking through a different lens at your agency. So basically it’s a health assessment of your agency, and it looks at five key areas. Your account executives or account managers, your agency’s finances, your agency’s biz dev efforts, your happiness as an agency owner, and how you’re managing the team. So it basically walks you through a series of questions and in five or six minutes you’re going to finish the questions. You will get instantaneously a report that talks about where maybe you need to spend some more time and where you’re super strong.

Drew McClellan:

You will also get that report by email so that you can keep it for your very own and you can set some goals. And then what happens is, based on your score, then you’re going to get some emails from us that are going to point you to other free resources for you to shore up wherever it is that you have the most room to grow. So to take that assessment and to get all of that support and all of that help, you just need to go over to agencymanagementinstitute.com/assessment, assessment is single, not plural. So head over there, take the assessment, and then take the data that we give you and begin to think about how you might tackle some of those issues as you march into 2021. This would be a great leadership team discussion, a great discussion for your next traction meeting if you have one, and we are happy to make that available to all of you. So head over the agencymanagementinstitute.com/assessment.

Drew McClellan:

All right, let me tell you a little bit about our guest. So RJ Taylor is the founder of a software as a service company called Pattern 89. And what they do is they, and I’ll let RJ explain it to you in a far more eloquent way than I will, but basically what they do is they partner with agencies and brands and they use machine learning and artificial intelligence to help you improve the ads that you’re putting out into the social channels. And they do that by measuring over 49,000 characteristics of a creative ad and being able to tell you what’s working and what’s not working, what is getting reaction from audiences and what isn’t. They’ll also be able to tell you, predict how long the ad will be effective, they will help you write the creative brief, they’ll help you iterate the ad. So it’s really interesting.

Drew McClellan:

But what I want to talk to RJ about is what he knows and learns based on and watching all of their clients’ ads and brands go through this process. So what is AI teaching RJ that would be valuable for us? How is all of the algorithms and all of the changes that are happening in the technology, how is that impacting the way we think about creating and testing ads? And some other questions like that. So I’m anxious to learn what he thinks we need to learn, because I think this is a place where many agencies are still in their infancy. And so my job, of course, is to pick his brain on your behalf, and I’m ready to do that. So let’s get to it. RJ, welcome to the podcast, thanks for joining us.

RJ Taylor:

Thanks for having me so much, appreciate it.

Drew McClellan:

So tell the listeners a little bit about your background, about Pattern 89, and how you came to have all of this insight into how agencies are using AI, things that we can be doing with it, and all the other things that we’re going to talk about today.

RJ Taylor:

Sure, sure thing. Well, I’ve worked in the digital marketing space for almost 20 years now, and started at Exact Target at a pretty robust partnership program with agencies, and then worked at Salesforce, and then I’ve continued to work in digital marketing. And across all that experience, what I’ve found is that marketers just need to know what’s going to work from a creative standpoint. And they’re doing a lot of A/B testing to figure out, “Does this one work, does that one work?” And it almost goes without fail that once you find the creative that works, it doesn’t work any more. Because trends changed, means changed, things changed, et cetera, and then we’re back to the drawing board.

RJ Taylor:

So it was with that idea in mind, or that problem, that we solved it with Pattern 89. And with the advent of AI, machine learning for both computer vision and natural language processing, we can understand what’s going to work. And so started playing around with some new algorithms about 4 1/2 years ago and built a business around it, and now we’re serving clients across the globe, and it’s been a lot of fun to blend my creative background, because I have an English degree, I’m a liberal arts guy, with the latest in technology, it’s a win-win on both sides of blending those two together.

Drew McClellan:

So give the listeners an idea of what, if they’re not familiar, what Pattern 89 is and what it does.

RJ Taylor:

Sure. What Pattern 89 is is a software platform that’s built on a data co-op. And what that means is that over 2,000 brands have connected their accounts, Facebook, Instagram, Google, other digital marketing platforms, to Pattern 89. We analyze it with 49,000 different creative dimensions to discover what’s trending up and what’s trending down. And we’re over 95% accurate at predicting whether a piece of creative is going to work. So a good example is, let’s say we’ve got an upcoming campaign for a fitness brand. Should I use a man or a woman in that fitness brand? Should I use a man with a blue shirt on or a red shirt? Should he have a beard? Should he have glasses? Should he be outside or working out inside? All these are creative questions that we might A/B test ourselves into, or you can use artificial intelligence to predict what’s going to work. And that’s ultimately what we do, is predict creative performance. We’re over 95% accurate at doing it and getting really granular as well as large, validating the creative ideas that are actually going to drive performance.

Drew McClellan:

So if I had an account, if I have an agency, I have an account, and I am going to be placing ads on behalf of a client, I can put creative up there and you’re going to say to me, “No, Drew, not the glasses,” right?

RJ Taylor:

Yeah, there’s two ways to think about it. One is, when you’re going to pitch an idea to a client … Actually, sorry, three different ways. One, when we connect an account up front you can say, “Hey, here’s what’s working, here’s what’s not working,” for your brand. And then use that to, number two, create a creative brief that is building on the things that are working for you. And so you can actually go into the creative session with a customer to propose, “Hey, you need more pictures of men with beards and glasses, plaid shirts, doing yoga outdoors in front of a mountain. And here’s the data underneath that.”

Drew McClellan:

Yeah, I don’t think that ad would work. I’m just saying, I’m just saying. But anyway, the plaid yoga thing, you lost me there. But okay.

RJ Taylor:

Yeah, I don’t know, it just …

Drew McClellan:

I’m with you. So when I plug my brand in, your software then goes and looks at what we’ve already done that’s been working and not working. So you’re basically going to say, “Hey, this ad underperformed this ad, here are the elements that seem to be getting you more attention, more clicks, more whatever,” right?

RJ Taylor:

Yes.

Drew McClellan:

Okay.

RJ Taylor:

Yeah, and the thing it’s going to do is benchmark you versus yourself, but also against the other 2,000 brands.

Drew McClellan:

Okay.

RJ Taylor:

So we’re going to identify patterns and outliers there to say, “Hey, here’s some ways to differentiate yourself,” as well as, “Here are the things that are in line with what’s working.”

Drew McClellan:

Okay, so I interrupted you with my plaid yoga guy. So number one is, you’re going to be able to look back and tell me what was working for us. Number two, you’re going to help us build a creative brief and suggest what we should do. And then I stopped you before you told us number three.

RJ Taylor:

Yeah, well, number three is, that creative brief will then generate creatives. And let’s say you come up with 20 candidate creatives or even 10, we can then tell you which creative to put into which format in front of which audience and identify what is it about the creative that’s going to drive performance. So rather than you just launching 10 or 20, or even if it’s two, you can launch the right one.

Drew McClellan:

So I can hear the creative directors who are listening to us …

RJ Taylor:

Oh, yeah.

Drew McClellan:

… screaming into their whiskey glass right now saying, “You’re destroying the creative process, the …” Et cetera, et cetera. I’m sure you’ve heard it before, so what is your response to that concern that using a tool like this or using AI at all, because this isn’t just specific to your tool, is watering down the creative process?

RJ Taylor:

Hm, yeah. Well, you know, it’s a fair concern, and I, just again for background, I have a masters in creative writing, so I really love the creative process and creativity. So I really come at this from the creative’s perspective. With that in mind, every creative really cares about ideas. And they want to figure out what idea is actually going to drive performance, and I describe Pattern 89 as the same as a recipe that you might give to three different Michelin starred chefs. And those Michelin starred chefs would create three different things from a basket of goods. I’m thinking of Chopped, that TV show, if you’ve ever watched it, but it’s true. Three different creative directors are going to come up with three different ideas. But what we’re going to do is use AI and data to tell you, “Here’s the recipes or the ingredients that you should work within.”

RJ Taylor:

So if I could tell you the color green is trending up, then you might want to use the color green versus blue. And humans, we’re just going to pick whatever we like, or maybe what the customer wants, instead of what’s actually driving performance. So if I can enhance those creative ideas, validate them with data, or a lot of times in the agency world we’re arguing with our customer about what to do. And it’s their opinion and the customer’s always right and they’re paying the bill. But what if you could say, “Hey, it’s not just RJ’s ideas as he’s sipping whiskey.” Instead it’s RJ’s ideas backed on predictive data that’s over 95% accurate. “Here’s why you should do it.” And we hear from our customers, “We want to differentiate from our competitors.” But then we come up with something different and then the customer’s like, “Wait, this doesn’t look like an ad for yoga pants.”

RJ Taylor:

“Well, did you want to differentiate or did you want to look like everybody else?” And you pay me to come with new ideas, now we can validate those ideas with data. So that’s how I get there. I’ll tell you, I have been, in the early days of Pattern 89 about 3 1/2 years ago, I made the mistake of walking into the creative directors’ world and trying to say that creative is going to be taken over by machines, and I learned that lesson early. And so we have to-

Drew McClellan:

Yeah, I bet that was painful.

RJ Taylor:

It was, it was.

Drew McClellan:

Yeah.

RJ Taylor:

But it’s good. So we just have to align ourselves with creative directors. Because there’s the creative team and the performance team, and both of them are pointing at each other saying, “The creative’s not good,” and the performance team’s saying, “We need better creative,” or whatever the case is. So we’re the data in the middle that can hopefully have the creative people do more creative ideas and express those ideas in a way that are actually performant.

Drew McClellan:

And I’m assuming that the AI, and again, your tool or another tool, the AI’s not just about visual things, but it would be about word choice and things like that, headline length and all kinds of stuff like that, right?

RJ Taylor:

Yeah, exactly. And it’s across images as well as video. So got a creative idea, how long should the video be? Should it be six seconds, 10 seconds, should it be long form? What copy should you pair with it? Should you use emojis, should you not use emojis? Special characters, tonality, those types of things. So we’re not going to tell you what to write or what to create, but the recipe around that is exactly what we can fulfill as creative people, and then performance of course matters. So it’s a little bit of both.

Drew McClellan:

Yeah. You know, I came up through the ranks as a copywriter too, but for me I never lost sight of the fact that, and I talk to agency owners about this all the time, it’s not our job in the creative department of an ad agency or a marketing agency, it’s not our job to create the Mona Lisa. It’s our job to create creative that drives whatever action we’re trying to drive. And so if I want to write a mystery novel, I can do that on the weekend. But my job Monday through Friday is to use words to create action and connection. And so if a tool could say to me, “Boy, if you use the word ‘pal’ versus the word ‘friend,’” that’s helping me do my job.

RJ Taylor:

Yeah. Yes, it’s true. It’s also scary and there’s this human thing that you’re describing there. And I really like this phrase that I’ve used a number of times, beauty is in the eye of the algorithm. You’re just saying, we want to create the Mona Lisa. It’s like, well, you don’t want to create the Mona Lisa like a Facebook ad. What would be the point?

Drew McClellan:

Right.

RJ Taylor:

So instead you want to create something that drives performance that also speaks to your brand. And so if you could do both, then that’s great. And it’s the Mona Lisa? Well then, you deserve a gold star, because that would be great. And the other component here is, a beautiful thing might resonate on a billboard or a beautiful thing might stand out maybe in a television commercial on the Super Bowl, and those are different mediums than an ad on Facebook or an ad on Google or a Pinterest ad or Snapchat or something. So you have to know the medium. And I don’t know, it’s tricky to balance those. But that’s a good point.

Drew McClellan:

Yeah. So agencies are challenged, small to mid-size agencies are challenged to figure out, they know AI is out there and there’s conferences about it, there’s things they could read about it, but they’re trying to figure out how to actually use it. And their clients aren’t Budweiser or Coca-Cola. Their clients are the local butcher, baker, and candlestick maker, or a regional bank. So how are you seeing, stepping away from your own tool for a second, how are you seeing small to mid-sized agencies leveraging AI? And is it your opinion that it’s a need or a want as we walk into 2021?

RJ Taylor:

Yeah, well, it’s a tough question to answer. I think it’s a need to have. And I’ll tell you what, it’s not a need to have right now, it’s a need to have for three years from now. And I think agencies of all sizes are going to be using artificial intelligence and it’s going to be something that everybody expects.

Drew McClellan:

Yeah.

RJ Taylor:

It’s kind of like a car without cruise control, or without driver assist, like the rear backup thing. You get into my 10-year-old car, and literally my wife has run into a few different things behind her because our other car, which is our family car, has the rear view thing. So it’s like we just expect it to be there. And so I think that a lot of especially small or mid-sized agencies as well as some smaller brands, they’re like, “Oh, we don’t need to have it right now,” because it feels a little bit luxurious or whatever. But if you’re not investing in AI, I don’t think that they’re going to be in business in three years. Or your competitors are all going to have it.

RJ Taylor:

And the other lesson I learned in my career, and I’m not that old but I’m 42 now, but in 2007 … So I ran mobile at Exact Target and Salesforce, all the mobile stuff. And in 2007 I was third in line to buy an iPhone when it first came out. Third in line in Indianapolis, where I live. And the news cameras showed me on the TV. I was pretty embarrassed about that. But in 2007 12% of Americans had a device with Internet, 12%.

Drew McClellan:

That’s hard to imagine.

RJ Taylor:

It is hard to imagine.

Drew McClellan:

Right.

RJ Taylor:

And back in 2007 we would say things like, I’m sure an agency would be like, “Well, what’s your mobile strategy? Tell me about your mobile website.” And we would talk about WAP pages and put a little “M” in front of everything. “Well, we have m-commerce.” And now if you ask a brand, you say, “Well, tell me, what’s your mobile strategy?” They’ll be like, “Do you mean my marketing strategy?”

Drew McClellan:

Yeah, you mean like my strategy? Yeah, yeah.

RJ Taylor:

Yeah, it’s the same deal. AI’s going to be everything. Right now we’re like, “Well, what’s your AI strategy?” There are AI conferences, and in three to five years there’s not going to be that. It’s just going to be everywhere. It’s going to be an enabling technology that is expected. And you can look at things like, Mobile Marketer just integrated their … They just got bought. There’s no more Mobile Marketer any more because there isn’t a mobile marketer that they’re speaking to. So it’s the same thing. So I don’t know that it’s need to have right now, because we’re still in early days. But it certainly is need to have in three years. If you’re not investing in it now, then I think you’re going to be left behind by your competitors who are investing today.

Drew McClellan:

Well, I think now is the time that it’s okay to experiment with it and to acknowledge to your clients that you’re experimenting with it. And so it’s time for you to play right now. But as you say, in three, four, five years everybody’s going to expect us to be proficient at it and have the tool set and all of that. So now is the time to start dabbling, right?

RJ Taylor:

Yeah, exactly right.

Drew McClellan:

So I’m guessing that you see a lot. When you’re looking at the data sets in, what did you say, 94,000 creative factors or something?

RJ Taylor:

Oh yeah, 49,000, yeah.

Drew McClellan:

Yeah, right, which I’m going to ask you to recite in a little bit. But anyway, so I’m sure that as you’re looking at the algorithms and the data, you’re seeing some really macro patterns about what’s working and what’s not working and all that. So I want to ask you about that, but first we’re going to take a quick break, and then we’ll come back and I want to hear about some of the things that you’re seeing, that if we had our brands plugged into your software we’d be seeing too. But because you’re on the podcast, you can just tell us. So we’re going to do that right after we come back from a quick break.

Drew McClellan:

When it comes to conducting a client satisfaction survey, your agency has three choices. The first one is, adopt a “don’t ask, don’t tell” policy and just roll the dice. Your second option is to do the study in-house, and the third option is to use a third party to conduct your client satisfaction survey. If you decide that you’re ready to invest in protecting your client relationships and improving your win and keep ratios, we believe there are some benefits of using AMI as your third party research partner. Number one, we know emphatically that your clients will tell us things that they just won’t tell you. The reality is they’re going to speak more freely if they’re not talking to you directly. They don’t want to hurt your feelings, and they don’t want to get into a big conversation about it. So a third party is a safe place for them to share their real feedback.

Drew McClellan:

The second is that at AMI we don’t have a bias about any particular clients. We don’t know if you like them, don’t like them, if they’re a pain, if they’re your favorite. And so because we understand the agency business but we don’t come into those conversations with any preconceived notions, we can absolutely give you unbiased and unfiltered information based on what your clients tell us. And you know what? We know agency clients. We can hear what they’re saying and we know which threads to pull on as we’re talking to them to get more information for you and more insight. Your clients will be comfortable talking to us because we speak their language. If you’re interested in having AMI do your customer satisfaction survey, head over to agencymanagementinstitute.com and look under the “how we help” section of the website to learn more. All right, let’s get back to the show.

Drew McClellan:

All right, we are back, and RJ and I have been talking about artificial intelligence and the importance of that for our agencies, and that now is the time to experiment. But right before the break it occurred to me that he’s seeing all of these data points. And so in terms of what’s working right now, granted that’s a window of time, so this is not what’s going to work for all of 2021, but I’m curious, RJ, what are you seeing that is maybe amongst the data sets or the 49,000 creative characteristics or features, what are you seeing that’s surprising you