Wednesday, February 24, 2016

Why Designing Your Marketing Technology Stack is a Waste of Time

My post last week about machine intelligence sparked a Twitter comment from @Jetlore, “The term 'machine learning' is like the term 'mobile' 7-10 years ago. It's simply something that all good software will do.” On reflection, this is absolutely correct – it is why there are already so many different uses of machine learning across the marketing landscape. This got me thinking about whether we could learn something from other technologies that were once bleeding edge but later became commonplace.

The most obvious of those is electricity. Nicholas Carr has explored the analogy between electric power utilities and information technology utilities in his books, but I haven’t (yet) read them. Instead I did a bit of my own research into the early twentieth century transition from steam to electric power in factories, eventually finding the key information in a paper From Shafts to Wires: Historical Perspectives on Electrification by Warren D. Devine, Jr., (The Journal of Economic History, June 1983).

The story turned out to be quite interesting, at least to me. In 1898 electric motors provided less than 5% of factory power.  By 1929 they provided nearly 80%. That 30 year span means a generation of managers spent their entire careers dealing with the shift. More precisely, they dealt with many shifts: the first electric motors simply drove the same overhead shafts that had previously been powered by steam engines or water wheels (leather belts transferred power from the shafts to individual machines). Then the motors drove numerous small shafts instead of one big shaft; then separate motors were attached to individual machines; finally, the machines themselves were redesigned to take advantage of having a motor of their own. Once the machines had been optimized for electric motors and factories had been redesigned to make the best use of this new configuration, the pace of change slowed down.

The analogy with machine learning and with marketing technology in general is clear. Initial applications fit the new technology into the old process: that’s why I love this picture of a robot secretary, which was someone’s initial (presumably joking) idea of how computers could replace human secretaries.* Applications then evolve into something completely different as people uncover the best ways to use the new technology. Those changes create other changes in related systems: getting rid of the overhead power shafts let factories become bigger and more efficient because machines could be placed anywhere and the ceiling was now free for better lights. ventilation, and overhead cranes. One article quoted Henry Ford as saying that his moving assembly line would have been impossible without electrification.

The obvious lesson is that marketers should also expect continued flux as new technologies are invented and refined. But while the need to plan for such change is a commonplace among industry gurus, myself included, I haven’t seen much attention paid to the less-obvious conflict between planning for change and standard approach of defining requirements, designing an architecture to meet those requirements, and then buying components to flesh out that architecture. Just as the physical architecture of factories changed as electric motors were deployed in different and more effective ways, the architecture of marketing systems can be expected to change as the technologies mature.

This means managers need tools designed to deal with continuous change.  These include systematic ways to decide when to adopt a new technology and when to wait for further improvements, and ways to ensure that a technology you adopt doesn’t prevent you from taking advantage of future technology that is more important. Early twentieth century managers invented industrial engineering, standardized fittings, and return on investment analysis for precisely those reasons.  Todays’ marketing technology managers need similar tools but I don’t hear much discussion about how to create them.

The second less-obvious point, although I guess we can credit it to Carr, is that the reward for successfully managing these continuous changes is nothing more than survival. Like today’s marketing technology, electric motors were purchased from outside suppliers who made the same equipment available to everyone. Sound choices were essential and making the wrong choice could be fatal (literally, where electricity was involved). But being a smart, fast follower was good enough; being a pioneer or master user of the new technology didn't ultimately matter because your surviving competitors ended up with similar tools. The final success of firms depended on the quality of their products, distribution, and, yes, marketing, not in whether they used electric motors. This meant that electricians, who at one point were considered super-elite if not magical, ultimately became nothing more than valued but prosaic craftsmen. I suppose that will be the fate of marketing technologists as well: today we are river pilots navigating a wild rapids, an exhilarating task with life-or-death responsibility. But at some point we’ll reach calmer waters, and then we’ll seem, and be, less important.

* On the other hand, conspiracy theorists: why does the robot in this picture have a reflection while the lady does not?  Perhaps she is the true alien, sent to infiltrate our planet with her diabolically irresistible technology.

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