Context is Everything.How the pursuit of relevance and personalisation has sparked an AI gold rush.

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Conquering the fear of irrelevance.In a dynamic business world shaken up by digital disruption and dramatic shifts in consumer behaviour, staying relevant is essential.

What’s more, relevance is something brands must prove continuously. Consumers have more choice than ever as to how and where they shop, which brands they do business with and how they engage. Brands need to be proactive in targeting consumers with relevant communication and experiences — getting it wrong can be as potentially damaging as doing nothing at all if customers feel the brand is out of step with their needs.

And while digital is disrupting almost every industry globally, digital also holds the key to conquering any fear of irrelevance that may be gripping brands today, as it presents opportunities for brands to leverage data to craft deeply meaningful and relevant customer experiences.

Businesses should be looking at their data, the digital channels available to them, the possibilities within AI and machine learning, and the appetite among consumers for personalised products and services — seeing all of this as an opportunity to embed relevance into their business models today.

Complete digital transformation is a journey with a North Star that guides us and also continuously moves as technology advances. By seizing the day and acting in the now, businesses will have begun the journey toward more personalised and more relevant experiences for customers.

Garrett Ilg President, Adobe EMEA

About this report: We have created this report to help brands understand how they can stay relevant and get closer to their customers by looking within their data. We look at the ability of artificial intelligence (AI) to help brands find relationships within their data and uncover richer insights that would evade human analysis and we consider the important relationship between increased data analytics and compliance. We will also look at what all this means for skills and hear from some Adobe customers throughout the report on how they are addressing the issue of relevance and personalisation.

About the data in this report:Adobe commissioned research company, Coleman Parkes, to interview 600 senior business decision-makers, comprising of 100 respondents from each of the following European countries/regions: Benelux, France, Germany, the Nordics, Switzerland, and the UK. Coleman Parkes interviewed respondents about their attitudes towards and preparations for personalisation, their experience of data management, and its relation to customer experience and compliance. The interviews took place between 21 August and 12 September 2018.

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Figure 1:How important is the personalisation of advertising, marketing and customer experience to businesses, versus percentage of businesses currently delivering the desired level of personalisation?

The desire to personalise.Brands want to roll out more personalised services and customer experiences. In fact, the vast majority believe personalisation is essential to success. But the Adobe research reveals most brands acknowledge they still have some way to go, with less than a third saying they are currently offering the right level of personalisation.

Businesses currently offering the right level of personalisation

Importance of personalisation to businesses

Context is everything.

It is said that a little knowledge can be a dangerous thing, and nowhere is this more true than when trying to create relevant relationships with consumers. Basing a relationship on a single data point – the last purchase somebody made, the last film they downloaded, the last journey they took – tells us remarkably little about that consumer and what they might want to do next.

Instead, brands need to be analysing the entirety of their customer data. They should be taking advantage of technologies such as AI to dig deeper and unearth relationships, context and insights within that data. Those insights can provide the foundations for creating incredible, personalised experiences for consumers that are relevant to who they are and what they want.

35%

89%

Switzerland

88%

23%

Nordics

88%

22%

Benelux

89%

42%

Germany

88%

35%

France

91%

30%

UK

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Figure 2:Respondents currently offering the desired level of personalisation, per industry sector:

“Whether you’re a retailer trying to anticipate what customers will need

next or a broadcaster hoping to upsell existing subscribers on a new

service, traditional targeting isn’t enough anymore. People do not

want to feel targeted; they want experiences that feel tailored to their needs. That’s what separates modern companies that know how

to put customers first from those businesses that can’t look past their

own products and services.”

Jamie BrightonProduct & Industry Marketing

EMEA, Adobe

THE ADOBE PERSPECTIVE

27%

Travel & Hospitality

21%

Financial Services

32%

Retail

39%

Telco & Media

The financial services sector in particular is lagging behind in terms of being able to offer personalisation and this appears to be in keeping with a consumer perception that many big banks and brands in that sector are less relevant now, especially as newer, more disruptive brands branch out into financial services and more agile fintech start-ups come along. So how do brands start to mine the customer insights they need to create more personalised experiences?

When we look at industry sectors it becomes clear some are doing better – or perhaps it would be more accurate to say some are doing far worse, as the overall situation is one of brands failing to deliver the personalisation they need.

We collect too much data from too many sources60%

We cannot process data quickly enough to act on it in time56%

We struggle to collate, structure and integrate data in a meaningful way

51%

We lack the capabilities or talent to effectively manage our data

48%

Data is stored in too many different systems48%

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Seeking relevance amid a sea of data and confusion.When looking for the perfect starting point to develop a customer centric approach, based on deep understanding of customer data, few businesses would choose where they find themselves in 2018: drowning in data and wrestling with the EU General Data Protection Regulation (GDPR).

Adobe research shows European businesses have been struggling to make sense of the data they already collect, with more than half of the senior decision-makers interviewed saying they collect too much data from too many sources, cannot process what they do collect quickly enough, and are unable to structure and integrate that data in a meaningful way.

Figure 3:What are the biggest barriers to your company’s ability to draw actionable insights from customer data and act on these?

This is not a great starting point for brands who need to find answers to some of their business’s most pressing questions within that data. It is also not great for ensuring an effective response to GDPR.

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“Businesses are making investments in AI, demonstrating that they believe this technology gives them the power to leverage greater control of their data, improve their digital offering, and

tackle compliance. The first step to making AI work is to integrate and consolidate all the data coming into your organisation. This is also the first step to gaining greater transparency into

this information – where it comes from, how it is used, and how it is being shared – which is the fundamental principle behind GDPR. That is why brands are getting excited about AI. It’s not just a way to achieve personalisation at scale, it’s a way to be more transparent with customers and

ensure they can better manage compliance, all while modernising the way they work.”

Julian KramerChief Experience Ambassador, Adobe EMEA

THE ADOBE PERSPECTIVE

Figure 4:Respondents who say GDPR has held them back to some extent in their drive to increased personalisation:

Make no mistake, these issues – personalisation and compliance – are inextricably linked. They both come down to how capable brands are at handling and making responsible use of their data. Brands who are struggling to manage their data will be limited in terms of what they can do with it, whether that is deriving customer insights or demonstrating compliance with data protection regulations.

This relationship can be seen clearly within the research, as nearly half of respondents in most countries said GDPR specifically had slowed down their efforts to roll out more personalised services.

However, to turn that into a positive, what it tells us is that brands who can solve one issue facing their business can also take significant steps towards solving the other, by getting on top of their data and ensuring they can analyse it quickly and in-depth. But how simple is that?

42%

Benelux

43%

UK

44%

France

46%

Nordics

49%

Germany

70%

Switzerland

We will do so before the end of 2019

48%We will do so before

the end of 2020

22%We are doing so

this year

18%Within 3 to 5 years

9%We have no

current plans

3%

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Figure 5:The road to AI – where are brands in terms of their use of AI for increased personalisation:

The role of AI in simplifying data management.Having recognised the need to personalise their customer experiences and identified the issues related to data management holding them back, brands are increasingly turning to AI for the power it can provide in structuring, analysing, and helping them make sense of their data.

Furthermore, so pressing is the need to start making sense of their data, the next two years look set to see something of an AI ‘gold rush’. From almost a standing start, the majority of businesses are already at least planning their AI roll-outs (Figure 5) and most expect to be using it successfully before the end of 2020 (Figure 6).

Figure 6:What timeline are you working towards for rolling out AI for improved personalisation:

Using AI to create personalised marketing and / or ad campaigns

Using AI to identify / improve personalised offers

Using AI to assess and optimise marketing / ad campaigns

01

02

03

Not doing but plan to

Testing

Rolling out

Using successfully

We have no plans to use AI

28% 35% 24% 11%

25% 40% 21% 11%

28% 42% 20% 7%

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The reasons brands are turning to AI are revealed by the research:

Brands recognise manual processes, such as time-consuming analytics, do not offer the speed or the depth of analysis required for creating personalised customer experiences.

However, that is not to say people are not still a vital asset within organisations as they start to roll out AI. Much has been made of the role of AI in reducing jobs, or making people obsolete, but the truth could not be more different. The research reveals a growing and increasingly important role for people within an organisation looking to benefit from AI.

1. Improving the speed and efficiency of existing processes (34%)

2. Offering customers new services (19%)

3. Getting to know customer better (16%)

Swisscom has been relentless in its pursuit of more innovative and personalised digital services. Most recently, the company added auto-targeting and auto-allocation capabilities to its digital properties, fueled by Adobe Sensei. Together, these allow Swisscom to automatically rollout, test, and optimise new services based on real-time customer data, in addition to personalising each customer’s experience based on their preferences.

AI SUCCESS STORY: SWISSCOM

“Personalisation is an important part of developing a fantastic customer experience, but it can be time consuming. By automating recommendations using artificial intelligence, we can provide even more personalised experiences while spending our time building new tests and experiences.”

Nicolas MérielSenior Digital Strategist, Swisscom

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Retail

Financial Services

Travel and Tourism

Telco and Media

63%

72%

92%

95%

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AI success is about skills and culture, not just technology.To meet their aggressive timeline for AI deployment over the next two years, brands are also racing to expand their AI capabilities by hiring experts and training their existing employees to work with the technology successfully. Brands across Europe are hiring and training in near-equal measure.

Brands see immense potential in AI, but they understand that technology alone will not be enough to get closer to their customers. They also need the necessary skills to take control of their data and take full advantage of AI. The need is across all sectors, though particularly high among companies in the travel and tourism sector and telco and media sector.

Interestingly, as we saw earlier in the report (Figure 2), the Telco and Media sector feels it is currently offering the highest levels of relevant personalisation, but also has greater concerns about the lack of skills to take it to the next level, suggesting that the need for personalisation may be greater still than other sectors. Certainly, the telco and media industries are fighting well-publicised relevance issues, from disruption to commoditisation in crowded, highly competitive market places.

Figure 7:Brands, by sector, that feel they lack the skills in-house to make full use of their data:

70%

Training existing staff

69%

Hiring new skilled staff

54%

Using external contractors / consultants

41%

Outsourcing to an SI / managed service provider /

IT consultancy

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To fill their skill gaps without slowing down their ambitious drive to personalisation and AI success, brands are taking a number of approaches, with hiring and training the top two. There has been a focus also on outsourcing work to contractors, consultants and consultancies, as we see wherever there is an in-house skills gap and a need to move quickly. However, it is likely hiring and training will, in time, diminish the short-term need for some external assistance.

It is also of interest to note the areas in which brands are hiring and the extent to which they have recognised AI success is contingent on far more than just investing in technology and IT skills.

Figure 8:How brands are gearing up from a skills perspective to tackle AI:

Sky UK collects a tremendous volume of customer data and understands that traditional segmentation can only go so far towards understanding a diverse audience. That is why the broadcaster is working with Adobe on a programmatic approach, using Adobe Experience Cloud solutions, alongside machine learning and AI, to analyse data in real-time to create experiences that are relevant for each and every customer.

AI SUCCESS STORY: SKY UK

“Adobe Sensei is the only way for us to build, maintain, and deliver hyper-focused offers across channels. It allows us to surprise and delight customers with recommendations that are not only relevant, but wanted.”

Rob McLaughlinHead of Digital Analytics, Sky UK

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Figure 9:The top areas where brands are hiring as they push towards AI:

Figure 10: How brands are approaching algorithmic development:

There is obviously a technical side to AI adoption, so it is unsurprising to see IT skills still top the list. One area where brands are lacking in IT skills is around the ability to create the algorithms needed to power AI. Nearly a third (30%) of respondents said they do not have the skills in-house to develop and train AI algorithms, and as such are turning to a combination of external consultants, vendors and partners (Figure 10).

Working with a combination of external partners and internal specialists

Creating and developing AI internally from scratch

Working with trusted partners / specialist vendors to develop AI

58%

IT skills

Data analytics skills

Customer service skills

Ethical skills and understanding

Advertising

Change management

Marketing

50%

36%

36%

45%

48%

48%

UK

51%

24%

25%

France

50%

34%

16%

Germany

53%

20%

27%

Benelux

48%

33%

19%

Nordics

47%

33%

20%

Switzerland

36%

30%

34%

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“The biggest mistake you can make is to start using AI without also adapting

the way you work. The technology can have a major impact when used correctly, but it is no saviour on its

own. Think of it more as an incredibly powerful assistant that allows you to work faster and at scale. As with any technology, it still takes the right

combination of skills and culture to unleash AI’s full potential.”

Bridget PerryVP Marketing, Adobe EMEA

THE ADOBE PERSPECTIVE

Despite IT skills being the top focus for hiring, brands are also recognising that AI is not just about IT, and its success is shaped by the people who are using it and acting upon the insights they derive. This recognition is driving a notable interest in recruiting analytics skills, customer service skills and practical skills around advertising and marketing.

Encouragingly, the focus on both change management and ethical skills also suggest brands are aware of the shift they are undertaking, towards AI-driven personalisation, and a more data-driven approach to customer engagement and experience. This approach is more significant, with greater implications for the business, than simply rolling out some new technology.

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Epson America serves a range of customers with vastly different needs, from the individuals who purchase its printers to the schools who need to outfit their classrooms with its industry-leading projectors. The company has its analytics capabilities with Adobe Sensei, providing employees with more robust customer dashboards that allow them to share real-time updates on campaign performance with marketing stakeholders. This greater level of transparency and collaboration means Epson can make crucial split-second decisions and instantly jump on opportunities to upsell and cross-sell its product lines.

AI SUCCESS STORY: EPSON AMERICA

“With Adobe Sensei-enabled capabilities helping us do even more with our Adobe Experience Cloud implementation, we’re shining light on any weaknesses so we can build a strong digital experience for all of our customers.”

Scott SturckeDirector Online Marketing Management, Epson America

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Based on our research, the insights shared by our customers, and the expertise of our Adobe team, we recommend businesses focus on the following five steps towards AI-driven personalisation at scale:

Build a team and culture for AI success: Identify the broad skills required within the organisation, not only to deploy AI but to understand what it should achieve, and how insights will be applied. AI success requires an informed, strategic, ethical and organisation-wide approach.

Get to grips with your data: Businesses may have been putting off tackling their data deluge, or may have assumed it was impossible to make sense of it. But now they must, for compliance purposes, and also in the interests of understanding their customers and remaining relevant. AI can help significantly and brands must embrace its capabilities.

Be bold and seek out context, not data points: AI has the power to see past singular data points and identify relationships and important context within complex data sets. Businesses need to understand what it can deliver and not use it to replicate the mistakes of the past, such as poor targeting based on shallow insights. Brands must put AI through its paces, be ambitious and seek true personalisation at scale.

Be prepared to adapt constantly: The insights derived from AI will help brands understand their customers and their businesses better. It will help them make more informed decisions and enable them to adapt and evolve their business – as long as they are willing to. AI success depends on brands being prepared to act upon insights.

Act now: The next two years are looking to be a significant tipping point in the adoption of AI for delivering more personalised customer experiences. As businesses rush to AI, driving customer expectations ever higher, those brands who are left behind face an increased risk of very quickly becoming irrelevant.

Do you want to know how Adobe can help you improve personalisation and get up and running quickly with AI? Find out more about Adobe Sensei AI and Adobe Experience Cloud.

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Adobe, the Adobe logo, Adobe Sensei and Adobe Experience Cloud are either registered trademarks or trademarks of Adobe in the United States and/or other countries. All other trademarks are the property of their respective owners.© 2018 Adobe Inc.

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AI success checklist.