Navigating the Future: GenAI’s Impact on Marketing, Ethics, and Data Strategies – Six Five On the Road

By Patrick Moorhead - June 17, 2024

On this episode of the Six Five On the Road, host Keith Kirkpatrick is joined by Pega‘s Tara DeZao, Director of Product Marketing, Adtech & Martech, for a conversation on how Generative AI (GenAI) is transforming the marketing landscape through innovative adtech and martech strategies, while also addressing the critical aspects of ethics and data management.

Their discussion covers:

  • The evolving role of GenAI in marketing and advertising technologies
  • Ethical considerations and best practices in data utilization with GenAI
  • Impact of GenAI on personalized marketing strategies and customer experiences
  • Navigating the challenges and opportunities presented by data privacy regulations in the era of GenAI
  • Future trends in advertising and marketing technologies influenced by GenAI advancements

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Keith Kirkpatrick: Hi, this is Keith Kirkpatrick, Research Director with The Futurum Group, and welcome to The Six Five – On the Road. Today I’m really happy to have Tara DeZao, director of product marketing with Pegasystems here as my guest to talk about the AdTech and MarTech space. Welcome, Tara.

Tara DeZao: Thank you for having me, Keith. It’s really great to be here.

Keith Kirkpatrick: Well, there’s a lot of really great stuff going on here at PegaWorld this week, and I kind of wanted to delve into an area that maybe we won’t be talking about that much at the show, but I know is an area that’s really interesting to me and you, and that is the current state of the MarTech and AdTech space, given that we’re really at a crossroads here in terms of what data can be used, what can’t be, maybe you can just give folks an idea of where we are in the space right now.

Tara DeZao: Yeah, so we’ve been talking about this for 10 years, but Google Chrome is deprecating the third-party cookies from their browser. They’re sort of the last frontier of data deprecation. We’ve seen rounds and rounds of different data providers deprecating. So we’re at a moment where we’re going to have to replace a gap for advertisers specifically, and it’s very unclear at this point which is going to be the best solution to do that. So there’s probably going to be a number of solutions that come in. I think this is ultimately a good thing for marketers because third-party data is not all that accurate, and consumers aren’t super comfortable with it from a privacy perspective. So it’s really more about gathering, organizing, cleaning your first-party data, and then activating that across channels.

Keith Kirkpatrick: So when we’re talking about third-party data, that’s like saying, “Okay, I’m going to this website and this website and I’m being tracked that way.” And then the idea behind it was, “Okay, they know that I went to Dick’s Sporting Goods here, and I also went to Kmart there,” and they can kind of build a profile based on that third-party data. But it sounds like what you’re saying is that there’s some accuracy issues when you’re just relying on that third-party data.

Tara DeZao: Yeah, big time. Because I don’t know about you, but in my house we have several people using the computer, so depending on who’s using the browser, that’s what we’re going to see, but I don’t need to be targeted with basketball cards from my nine-year-old son. So that’s a wasted impression. And then you add that up over time and marketers are just wasting impressions when they don’t have accurate targeting capabilities.

Keith Kirkpatrick: Right. It’s really interesting, you talk about wasted impressions. One of the other things that I’ve come across both from a professional point of view, but also in my own life, is you’ll be scrolling around looking on the web and you’ll click on a site going, “Wow, I think this really has information I need.” And then all of a sudden you’re just bombarded with clickbait ads, all that of that kind of stuff. And I understand that’s something called made-for-advertising websites. Maybe you could talk a little bit about that and why that’s a problem.

Tara DeZao: Yeah, so made-for-advertising websites are a huge problem, and brands need to know about this because a lot of their display ads are going to made-for-advertising sites. Made-for-advertising sites are exactly what they say, so low content value, high advertisement-to-content ratio, almost twice what a regular website would be. And it’s mostly a lot of paid traffic. It’s not organic, it’s not the type of audience that a lot of these brands want to get in front of. And then users, audiences, they get really frustrated by this experience because they have to be clicking off ads and really getting that really interruptive, high-frequency advertising when they’re really just trying to get to the content that they want to see.

Keith Kirkpatrick: Right, and I would imagine that a lot of the stuff with a lot of the MFA sites that I’ve been on, you can’t help but misclick on ads because they’re popping up all over the place.

Tara DeZao: Absolutely.

Keith Kirkpatrick: And then I assume that’s just a wasted impression because I’m not intending to click on something there.

Tara DeZao: 100%. And then when you filter that down to mobile and tiny, you’re just poking all over the place. So these aren’t real impressions. It’s a waste of money for the brand. We talked a little bit earlier about the ANA report that came out last year about waste in the programmatic ecosystem. MFA is one of the top contributors to that. So folks need to talk to their technology partners and their agencies and make sure that their programmatic advertising is not going to these spots.

Keith Kirkpatrick: I’ll go out a little bit on a limb here and say that in a sense, when we’re talking about MFA, we’re kind of talking about ad fraud because really it seems to be what it is.

Tara DeZao: Yeah, it’s a misrepresentation of the audience insights that you’re getting, so it’s an inflation of the actual impact of your message I would say.

Keith Kirkpatrick: Right. And I know we could probably spend all weekend talking about this, but is there anything that advertisers can do to combat this? Obviously, they should be aware of what it is, but is there anything they can do in terms of using different brokers or what have you?

Tara DeZao: Yeah, I would say just ask for transparency, full transparency from your vendors. They should be able to give it to you. The less layers between you and the consumer, that’s the best way to go. That’s why I always advocate first-party data activation, and now with AI, we’re able to maybe decrease some of the bloat in our MarTech and AdTech stacks. So less sort of bureaucracy between you and your customer would be great.

Keith Kirkpatrick: Right. Well, I’m glad you mentioned generative AI because we haven’t talked about that enough this week or this year-

Tara DeZao: Yeah, so much AI talk.

Keith Kirkpatrick: … but I’m just curious, it sounds like there’s real opportunity to utilize generative AI to provide more personalization, which is really what it sounds like a lot of companies are trying to do. They’re trying to market in a much more one-to-one way as opposed to one-to-many. Maybe you can talk a little bit about how generative AI might help with that.

Tara DeZao: So generative AI is kind of just like a slice of the overall market and product capabilities available, but with GenAI, what we’re seeing, at least at Pega, and what I always advocate for is that it’s a tool to augment… I cover marketers and I research marketers, so it’s really a tool to augment marketing creation of content, content variation. I think when GenAI first hit the scene, folks were scared that it was going to take their job away from them, but we’re seeing that human creativity outlives all, and really it’s a way to help decrease time to market for testing messages, for creating content variations, or even concepting. I’ve seen brands use their generative AI to create sort of pre-concepts that they then hand off to their external agency, and it reduces the amount of rounds that you go with your agency. So that’s a big operational savings there.

Keith Kirkpatrick: So what you’re saying is generative AI, it’s not necessarily going to be replacing people, but really helping them do their jobs, not only more efficiently, but also expanding their productivity by almost an order of magnitude in some cases.

Tara DeZao: Absolutely. If I think back to my days in brand marketing and the marketing ops person is the glue that holds everything together, this will decrease burnout in so many ways because it’s allowing us to do things more quickly that are routine, and that means faster time to market, your in-house creative people are going to be happier because their stakeholders aren’t going to be asking every day where their creative is. It’s a way to really just optimize the creative process I think.

Keith Kirkpatrick: Right, now that all sounds great, but of course with anything there are potential pitfalls. What are some of the dangers around generative AI, particularly from an enterprise point of view?

Tara DeZao: Yeah, I think responsible AI is really important. So one of the things I always talk about is we have a feature called ethical bias check at Pega, and that’s really about looking at your data labels and understanding which data could potentially carry bias. So we’re thinking like age, gender, income, possible region. So really knowing why your AI is making those decisions, why they’re serving certain pieces of content, why it’s serving certain pieces of content to this customer and not that customer, it’s really important.

And then I would also say accuracy. When you’re using Gen AI, that tool is scraping the entire internet and sometimes it hallucinates and answers without information. So I always check my sources, always check for plagiarism and things like that because it’s meant to help you, but it’s not meant to replace you, so can’t set it and forget it.

Keith Kirkpatrick: Yeah. I’m wondering though, some things that I’ve heard about at this conference and at others that there are certain things that can be done in terms of grounding these AI models to a specific corpus of data. Is that something that you’re seeing going on with customers in the market saying, “Hey, we understand that just sending it out to OpenAI everywhere is probably going to result in the problem that you said, of hallucination?”

Tara DeZao: Yeah, I think really the foundation of all of this is the data. So if you’re training your models on inaccurate or outdated data, the outcome is going to be that, right?

Keith Kirkpatrick: Right.

Tara DeZao: If it’s biased data, the outcome’s going to be biased. If it’s stale data, the outcome is not going to be relevant to the consumer. So it’s less about the technology itself and more about the data that you put into it.

Keith Kirkpatrick: And along with that, I think you mentioned this, it sounds like it’s really important to be monitoring that data consistently. You can’t just set it and forget it. You need to keep going back, check for model drift, check for bias that might be creeping in, even inadvertently.

Tara DeZao: Absolutely, and truthfully primarily that’s what happens, it’s a creep. It’s not an intentional, it can be intentional, but it’s rare. So it’s really important to be checking that and having a human in the loop and understanding what’s going on with the data.

Keith Kirkpatrick: So finally, as we wrap up, maybe you can talk a little bit about what is Pega doing in this space and what are some of the exciting things that we can look forward to over the coming six, 12 months?

Tara DeZao: Yeah, we talked about first party data activation and the gaps we’re seeing with third party. Customer Decision Hub is a real-time decisioning engine, and we’re a leader in that space. And what’s great about this is that CDH is able to interact within milliseconds with a customer or prospect. So you’re acting on real-time insights. You can’t get any fresher data than that. So it becomes a one-to-one interaction. You don’t set a campaign schedule and blast out batches of pre-settled messages, and it’s really a way to put hyper relevancy into your content. You can also see how your content is performing in real-time. So as a former campaign marketer, I’m used to not getting the results from a campaign for two weeks after the campaign is closed, but in this new world, it’s about being able to pivot in real-time if something’s not working.

Keith Kirkpatrick: It seems like it opens up a whole world of new opportunities for marketers out there, but I’m curious, is that something that… are these organizations set up to do that? Meaning just in terms of how they look at… Because traditionally it was one to many and we’re in a segment going, “Okay, I don’t know you Tara, but I know people kind of like you, and that’s how we’re going to target.” Now you’re telling me that it’s about being able to understand you based on your first party data.

Tara DeZao: Yes.

Keith Kirkpatrick: It seems like there’s a real key change there.

Tara DeZao: Well, I think that in terms of where folks are on the spectrum of technology adoption, that varies. But I think that most marketers understand the value of having a truly relevant interaction with a customer. So I think that the mind shift is going to be the biggest hurdle maybe. We see a lot of different functional areas within organizations. We see people ready in one functional area to move to one-to-one where we might have some traditional marketers, on the other hand, we see combination. But really I think it’s mostly about how you set up your organization, its mindset, and then the culture that you sort of set up around that as a marketer.

Keith Kirkpatrick: And it sounds like that’s something that Pega is intimately involved with in terms of working with their customers to help them set up that organization for this sort of new framework or way of doing things.

Tara DeZao: Absolutely. And there’s certainly a time and a place for ripping out an entire solution and changing it, but it’s not something that you have to do all at once. You can roll out channel by channel, get to the point eventually where your your inbound channels is powering your outbound channels, but really you can sort of crawl, walk, run. It’s not a all at once… it doesn’t have to be an all at once transformation.

Keith Kirkpatrick: So it can be more evolutionary rather than revolutionary?

Tara DeZao: 100%. And increasing the efficacy on even one channel is going to help a lot, I would say.

Keith Kirkpatrick: Right. Well, it certainly sounds like there’s a lot going on in the space and sounds like Pega is sort of at the forefront in terms of helping to transform the AdTech and Martech space.

Tara DeZao: Yeah, we’re really, really trying to help organizations index towards customer-centricity, understanding that empathy is part of the process. You don’t just want to be selling to your customers all the time. You want to be offering personalization that helps them with a problem. It’s not always about serving them, and sometimes it might even be not talking to them at all. We see, what, 6,000 messages a day or something like that?

Keith Kirkpatrick: Right.

Tara DeZao: So maybe sometimes you don’t have anything to say, and that’s all right, too.

Keith Kirkpatrick: Well, that’s a revolutionary thought and we’re going to stop it there. But Tara, thank you so much for joining me today.

Tara DeZao: Keith, thank you so much.

Keith Kirkpatrick: Absolutely.

Tara DeZao: It’s been great to be here.

Keith Kirkpatrick: All right, well thanks to all of you for watching. This has been Keith Kirkpatrick, Research Director at The Futurum Group for The Six Five – On the Road, and we’ll see you again really soon.

Patrick Moorhead

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.