A technology platform which wants to 'revolutionise marketing' and promises to fully automate media buying and planning using artificial intelligence, could arrive in Australia within a year.
Blackwood Seven, which uses predictive technology and algorithms to help clients insource media planning, buying and execution across all traditional and digital channels, claims its system is at least 20% more effective than manual labour.
It is being used by some of the largest companies in Europe including Volkswagen, Vodafone and Reckitt Benckiser in Germany, and the platform manages annual billings in excess of A$550 million globally.
The platform is also making inroads in the US, with clients including Groupon and One Dollar Shave Club, and plans to expand into Asia-Pacific within the next 12 months.
Blackwood Seven CEO and co-founder Carl Erik Kjærsgaard tells AdNews the technology could challenge the current business model of media agencies, in particular labour intensive manual processes.
“If you take our platform and put it into a media agency you could save 40% to 50% of all staff,” Kjærsgaard says. “Not the strategic advisers at the top level, but you could take out what I would call the ‘hot hands’, the media executives that are moving excel spreadsheets back and forth.
“I have spoken to three CEOs from the global media groups and they accept they will need to change and get some (similar) technology. But it’s not tech you can buy, you have to build it.”
The platform works by applying machine learning to more than 80 external data sources, as well as real-time client sales and net media spend data to chart media plans against client KPIs.
Kjærsgaard says the approach differs from a traditional media agency because its media planning is focused more on sales than audience.
“What we find very interesting is that we can use all of this data to now predict sales. So far, media agencies have always had a focus on audiences and how they can work with an audience (to deliver campaign objectives),” he says.
“We are actually leapfrogging the audience. When it comes to clients what they are really interested in is actually transactions or sales.”
Kjærsgaard claims the software can predict how many transactions a client will get out of a media investment with accuracy of 89% to 94%.
Tech giants threat
An industry source tells AdNews Blackwood Seven's success will depend on the quality of data it can source as well as overcoming challenges to access inventory from publishers.
Another challenge it would need to overcome is integrating the platform to Australia's various media owners, which are at different stages in the transition to programmatic.
While it is difficult to predict how much of an impact Blackwood Seven will have in Australia, the broader trend towards automation of buying and planning processes appears inevitable with several global technology companies investing more in media and marketing solutions.
In recent months, the the Danish company formed a partnership with technology giant SAP to offer the software a a service solution as part of its marketing suite.
Kjærsgaard believes the likes of Salesforce, Adobe, Oracle, IBM and SAP are the biggest threat to global agency holding groups.
“There will come a huge change very fast,” Kjærsgaard predicts. “You can see year to year how fast these technology giants are moving into this area and they are doing this because they already have all of the clients’ data.
“It’s not so difficult for them to start operating in this area…and that’s where the big change in the media buying industry will come. They will place enormous pressure on the media agency market within the next four to five years.”
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