Conventional wisdom: The result of manufactured perceptions which solidify into institutional facts... that are often wrong.

It's a long headline, but it accurately states our point.

Let's start this piece with one of many examples of fiction being perceived as fact from Freakonomics to set the table on the point of this article.

Did you know that over the years Listerine advertisers were able to convince tens of millions of Americans that bad breath was a disease and that Listerine was the only and then later, the best cure? "Kills the germs that cause bad breath", is the tagline.

Delve into the facts beyond the conventional wisdom pounded into the population's consciousness and you learn that not only is it not true...or at least in how it is perceived isn't true, the product an have a hidden negative effect. The ingredients, including alcohol, do wipe out a lot of 'germs' (a.k.a. bacteria), including the litany of bacteria that are there to help you process food, keep you and your mouth healthy (your bacteria 'biome' commonly understood as the 'gut biome', which today hundreds of products now help you grow and sustain).

Billions of dollars are spent each year bringing new CPG products to market and promoting their sale and adoption by consumers. Most of them fail. And, much of that precious capital spent to launch and grow products is poorly allocated. Why are stacks of cash and hundreds of thousands of valuable man-hours wasted?

Because we (ok, the industry of brand CPG and retail) are focusing on the wrong metrics and are still largely guessing as to where to place bets (investment), where and when...and why. Digital less so than physical space but even there, there is room for improvement in new and exciting ways that graph intelligence can inform against.

Quoted from David Ogilvy, the head of the famous Ogilvy & Mather advertising agency's book, 'Confessions of an Advertising Man (pp. 86-87)':

Half the money I spend on advertising is wasted, and the trouble is I don't know which half.

There is much new intelligence that we can extract from FELIX, DecisionArts hybrid GNN knowledge engine.  This intelligence can include products which appear to have little to nothing in common will resonate with the same consumer , doing so with uncanny accuracy.  Which content and incentives will drive conversion with specific customers, at specific times in specific locations.  Everything within FELIX’s knowledge graph has a unique ‘Fingerprint’.

Putting this approach to work can yield powerful new results for brand marketers.  In this piece we are going to break down some of the shocking conclusions emerging AI and in particular Knowledge Graph driven systems like FELIX are revealing.

FELIX can accurately divine what recommendations or substitutions will yield the greatest results, as well as where and when.  FELIX can accurately identify emerging  white spaces, where products that don’t yet exist will achieve superior sell through results.  It can fetch products based on identified p_Keys or even queried attributes or even bond strength linkages between items. 

FELIX can enter and interpret its graph from any direction or question/knowledge gap, as can the product marketer or even the end consumer with access to FELIX to get to the best or right answer best tailored to their particular needs and desired outcomes quickly. 

The novel approach found in FELIX’s structure and algorithms is what drives insights and results that prior to broad AI awareness in the market was thought to be impossible. 

What does all this mean? 

It means that what marketers have long believed to be best practice and the ground truth of product marketing, isn’t.

Sure, some of these are generalized statements. We get that. The point here is to put a stake in ground and build around that with empirical evidence. Hard data tied directly to definitive outcomes.

We do plan on filling in the gaps with data as we move forward, so stay tuned.

DecisionArts has also been able to analyze program performance data which lead to new expectations about consumer behavior, product marketing and incentives.  What are some of the key learnings FELIX is uncovering?   Here are a few nuggets to chew on:

• The bond strength between a brand and consumers is much weaker than currently believed. 
•  Loyalty as we know it is largely a myth.  What drives repetitive purchase is not necessarily what conventional wisdom and approaches suggest. 
• Loyalty behaviors can be short circuited just prior to, or at the moment of truth (purchase), through the use of certain incentives and merchandising, which can easily result in a competitive product substitution.
• Habit, entry points and friction play a much greater role to status quo consumer shopping behaviors. 
• Habit and friction can be more easily influenced than entry points.
• Price and friction have a different relationship than previously believed.
• Discounting doesn't necessarily work as commonly believed.
• Specialty or non-traditional merchandising, including non-alike items is materially more effective than traditional planograms in generating share growth for new products or products in maturity phases.
• ZIP codes adjacent to one another yield very different sales results using traditional assortment, merchandising and marketing techniques.  A more selective approach applied in identified ZIP codes can have 2x greater results over simply making a product broadly available within a regional marketplace.
• Characteristics and attribute linkages are consistently more important than 'brand strength' as we currently think about 'brand strength.'
• Characteristics and attributes drive selection and performance can be identical in geographically diverse ZIP codes in which surface data would indicate otherwise.
•  Look-alike models, PRIZM data, focus groups and the use of third party aggregated data sets are important tools to use as a starting point but the value and accuracy quickly falls away. Characteristic, attribute and criteria alignment is significantly more effective than Look-alikes, PRIZM segmentation and focus groups.
• Broad based market share growth can be accomplished using more surgical techniques. In essence, the current model of 'Spray and Pray' is no better than betting on the trifecta at the Kentucky Derby based on a horse's name.

Traditional product development, assortment, merchandising, promotion, marketing and advertising techniques do still work today.  It’s just the variables these tools and programs must account for means the effort required is much greater than ever before and results and their consistency is lower. 

But that is how it is today.  More channels, more noise, more tools, more options to choose from, smarter competitors, new entrants, market forces, economic dynamics, etc., etc. etc..  However, unlike Blackjack, card counting with AI driven solutions is perfectly legal, if you pick the right approach and put it to work correctly.  All AI solutions, like any solution or even like card players are not equal.

You can still guess and rely on historical methods, but the goal is to win, so why would you?