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HOW TO HIRE A MACHINE

The CMO’s Guide to Artificial Intelligence Marketing (AIM)

How To Hire a Machine – 1


This guide explores the rise of artificial intelligence
Content
marketing (AIM) and the implications for marketers,
strategic thinkers, and global enterprise as they stretch
to reach today’s informed, demanding, and connected Intro: Rise of AIM...........................................................................................................03
consumer.
What is AI?.......................................................................................................................................05

Which technologies are ready now for marketers?..................................................................06

Rise of AI in marketing..................................................................................................................09

Evaluating AIM Technologies..........................................................................................10

Limitations of rules-based marketing........................................................................................14

Shift in burden of labor for marketers........................................................................................15

Section 3: AI in the Wild: How companies currently measure ROI from AI......................16

Utilize AIM to drive growth in cutthroat mobile market .......................................................17

Gaming industry leader levels up incremental revenue.........................................................18

Section 4: AI Vendor Assessment...................................................................................19

Section 5: Closing..........................................................................................................20

Sources............................................................................................................................................21

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INTRO: RISE OF AIM

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INTRODUCTION // RISE OF AIM

INTRODUCTION


Welcome to the gold rush phase of artificial intelligence marketing. Three years ago, only a
handful of companies possessed AI capabilities within their marketing stack. Three years
from now, AI will permeate every aspect of technology.

Right now, every vendor is talking about AI and the only thing bigger than the hype is the
skepticism.

86% of enterprises 86% of enterprises are investigating AI marketing, but only 12% have implemented.

are investigating
As the category matures, companies rightly are cautious about how to proceed. In these
early days, some will gain competitive advantages through early investments in AI, while
others will waste time and money on technologies that don’t work or can’t deliver the

AI marketing, but
promised impact.

Many companies will stay on the sidelines with a wait-and-see approach which puts them at

only 12% have


risk from competitors investing heavily in AI.

In a recent report, McKinsey found that companies with executive support for AI initiatives


implemented any
and infrastructure achieve up to 15% higher profit margin, with the majority of respondents
expecting margins to increase by 5% points in the next year.

into production.
Whether you’re already exploring AI marketing solutions or considering adoption in 2018,
this guide is designed to help the enterprise B2C marketer answer these essential questions:

+ What is AI?
+ Which AI technologies are ready for marketers to use now?
+ Which AI technologies can have the biggest impact on my business and my
customers?
+ How should I evaluate vendors and solutions?
It’s critical for brands to find the right answers to these questions to deliver better
customer experiences—before their competitors do.

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INTRODUCTION // RISE OF AIM

WHAT IS AI?
Machines perform millions of complex tasks. What is the difference between
computation and cognition? Here’s a simple way to think about it: if a computer is solving
a problem or answering a question without being given an explicit set of instructions to
do so, then it’s probably AI.

Sarah Fay of Glasswing Ventures (an investment firm focused on AI) says: “Artificial
intelligence exists when software can make decisions outside of the data strategy and
rules set by humans, to form new solutions.”

Meanwhile, popular culture has created an impression that AI is about creating self-
aware, simulated humans, or even more powerful minds. While it’s an aspirational goal,
it doesn’t really represent most of what’s happening in the field. It may not even be the
most useful application of the technology. After all, we already have seven billion humans,
most of whom are adept at performing human-like tasks.

Although human simulations are provocative and mostly hypothetical, applied AI takes an
entirely different approach. While you wouldn’t consider it a fully synthetic being, applied
AI can do things humans don’t do naturally or quickly, like crunching large sets of data to
find patterns.

As marketers already know, we have more data than ever before avilable. In fact, 90% of
the data in the history of the world has been created in the last two years.

While humans have a biological limit on the amount of data we can process, AI answers
questions at a scale that’s beyond humanly possible. And, for marketers looking to take
action on the vast volume of customer data being captured, AI represents a whole new
era of customer engagement.

International Data Corporation (IDC) forecasts worldwide


revenues for cognitive and artificial intelligence (AI) systems
will reach $12.5 billion in 2017, an increase of 59.3% over
2016[2]

How To Hire a Machine – 5


INTRODUCTION // RISE OF AIM

WHICH PREDICTIVE

TECHNOLOGIES
ANALYTICS

ARE READY FOR


MARKETERS NOW?
MACHINE ARTIFICIAL
LEARNING INTELLIGENCE
The good news is that while true sentient, human-simulating AI is
a ways off, natural language processing and machine learning are
proven technologies with benefits for marketers right now.
DEEP NATURAL
Natural Language Processing LEARNING LANGUAGE
PROCESSING

Machine Learning and Its Derivatives

Predictive Analytics

Deep Learning

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INTRODUCTION // RISE OF AIM

Natural Language Processing


Natural language processing is a set of machine capabilities that allow for interaction with humans
in their language of choice. This has been a goal of AI as long as the field has existed (e.g., the Turing
test). But only recently have we seen real-world applications that are powerful enough to understand the
nuances of human language.

Examples:


+ Personal Assistants (Alexa, Cortana)
+ First level customer support
+ Google Translate
+ Chatbots

Machine Learning and Its Derivatives Machine learning can


Machine learning starts with data – the more the better. This can be relational data, such
as customer records, or it can be unstructured data, such as clickstream data from a
web app or device location. Data is then fed through an algorithm with an objective in
be an offline, manual
mind. The result is a model that can be applied in many ways. It can surface as insights
in analytics, as a change in behavior in a system, or an update to a set of data. process, requiring
manipulation of data,
Not everyone considers all machine learning applications to be AI. Machine learning
can be an offline, manual process, requiring manipulation of data, and hours of work
by data scientists to produce results that are consumed in offline documents. But


and hours of work by
when implemented as part of a platform where it drives actions automatically, Machine
learning can be considered a true intelligence, capable of making unsupervised
decisions and delivering powerful results.

Today, certain machine learning algorithms are a commodity, automatically built into
applications and scripting language libraries. The value of applying machine learning to
a specific application comes in choosing and shaping the data to create a useful model.
data scientists...
Most useful models answer a specific question at a specific point in time. To address a
new question, you must construct a new specific model.

Examples:
+ Naïve Bayes Classifier Algorithm: “Does this thing belong to a set or doesn’t it?”
Example application: Spam filtering: Is this message spam or is it not spam?

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INTRODUCTION // RISE OF AIM

Examples (continued):
+ K Means Cluster Algorithm
Example application: Clustering of search results for multiple meanings of a word (car
keys versus piano keys versus cryptographic keys)
+ Support Vector Algorithm
Example application: Stock market forecasting
+ Decision Tree Algorithm:
Example application: Loan applicant qualification
+ Random Forest Algorithm
Example application: Regression tasks, like multivariate testing or patient disease
prediction

Predictive analytics
Using data mining, statistics and machine learning, predictive analytics aims to take historical
data to find trends and patterns in order to make predictions about the future.

Examples:
+ Lead scoring based on current customers,
+ Customer Lifetime Value (CLV)
+ Next-Best-Action (NBA) and
+ Product or related content recommendation engines.

Deep Learning
Another offshoot of machine learning, deep learning, uses an artificial neural network, which is a
computer system designed to function in some ways like a biological brain. Unsupervised, it can
build complicated learnings out of simple ones. This requires a tremendous amount of data and
processing power, but can yield surprising results. The ability for a machine to learn new things in
an unsupervised way has tremendous potential in areas such as cyber security, image recognition,
and fraud detection.

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INTRODUCTION // RISE OF AIM

RISE OF AI IN


MARKETING
The rise of AI Across industries, increased investment in artificial intelligence signifies a sea change
in the application of cognitive technology within enterprises. No longer relegated to

reflects key MIT grads and sci-fi iconoclasts, AI is a proven force within consumer industries. What
was once a theory of market disruption is rapidly evolving into a cornerstone of market

changes in
survival.

The rise of AI reflects key changes in consumer behavior and data proliferation, as
customers fluidly interact with brands across channels, industries and devices—all

consumer behavior in real-time. As marketers increasingly seek to deliver personalized, highly contextual
experiences, they struggle to close the gap between the vortex of available data, new


and data
channels, and ever-evolving customer behavior.

In an attempt to harness existing marketing cloud technologies to deliver seamless,


relevant consumer connections, marketers have been limited by rules-based legacy
proliferation. systems and labor-intensive data science processes.

“Existing marketing constructs — including organizational design, insights generation, and


rule-based systems for orchestrating and delivering customer interactions — centered on
human cognition simply cannot cope with the volume, velocity, and complexity of modern
customer engagement,” according to Forrester VP, Principal Analyst Joe Stanhope
in his recent AI-focused research, “AI Must Learn the Basics Before it Can Transform
Marketing.”

This exact challenge of delivering 1:1 consumer experiences at scale has led to a boon in
AI-powered marketing technology solutions.

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EVALUATING AIM
TECHNOLOGIES
Distilling core AI from hype

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EVALUATING AIM

What areas of your organization are


leading or evaluating the investment and
adoption in AI systems?
(Please select the top three.)

Marketing/sales 46%

Product management 40%

MARKETING: Customer support 40%

LEADING THE Engineering 31%

CHARGE IN CEO/board 25%

ENTERPRISE AI Risk & compliance 19%

ADOPTION Security 19%

Logistics 13%

Finance 12%

Source: Forrester’s Q2 2016 Global State Of Artificial


Intelligence Online Survey

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EVALUATING AIM


EVALUATING AIM
Marketers evaluating artificial intelligence marketing (AIM) solutions are
faced with a market so filled with sales hype and opaque, proprietary data
science, that wading through the waters is a tough proposition for even
the most savvy enterprise buyer.
The emerging AI
In the context of consumer behavior, AI is often used as a catch-all term
referring to technology that carries out tasks in conjunction with human
market is so chock-
efforts. For example, to generate automated decisions about everything
from product offerings to geo-location mapping. full of sales hype and
While the market is filled with rules-based or ad hoc, bolt-on solutions
masquerading as AI, true AI-powered martech, according to Forrester’s
Joe Stanhope, requires the following three critical capabilities:
opaque proprietary
+ Sense: Ingest Data and Context data science that
+ Think: Deploy Self-Learning Models
+ Act: Take Action
wading through the
SENSE: INGEST DATA AND CONTEXT.
According to Stanhope, much of AI’s advantage over traditional systems
waters is a tough
of insight and engagement is its built-in ability to consume data from a
propopsition for


broad range of customer, behavior, and content sources, at scale and
real-time speed.

By connecting to nearly any data feed with the ability to rapidly ingest
event-level data and enriched data sets, emerging AIM platforms act as
even the most savvy
a layer of intelligence between data environment(s) and systems of
engagement. enterprise buyer.

How To Hire a Machine – 12


EVALUATING AIM

THINK: DEPLOY SELF-LEARNING MODELS.


While AI serves as an overarching category for a number of analytical techniques,
including machine learning and predictive modeling, it takes more than algorithms
alone to be considered AI. They must be able to continuously optimize and retrain
based on customer behaviors and changing conditions.

“The algorithms employed by AI systems are not static, they constantly test
themselves against marketing KPIs and dynamically retrain their models to
improve performance,” said Stanhope.

ACT: TAKE ACTION.


True AIM solutions are able to decrease the gap between insight and action
to fulfill on the promise of truly prescriptive analytics. It’s not enough to simply
deliver insights—these tools must be able to orchestrate and execute cross-
channel action across hundreds of customer attributes and thousands of
experience permutations.

AIM solutions plug into a variety of engagement channels, ranging from site and
mobile experiences to email, SMS, and paid media.

DATA CUSTOMER
SENSE THINK ACT EXPERIENCE
SOURCES
LEARN

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EVALUATING AIM

THE LIMITATIONS OF


RULES-BASED MARKETING
How AI solves for marketing automation scalability issues
In order to get the The challenge with traditional marketing automation or customer journey orchestration solutions
is that they are only as scalable or as intelligent as the marketers running them. While such

desired targeting solutions have shown the ability to automate marketing execution for specific “if/then” scenarios
and to address the challenges of orchestrating cross-channel interactions, these solutions fall

granularity, marketers
short when trying to apply them broadly across a large B2C enterprise for three key reasons:

In order to get the desired targeting granularity, marketers have to write and maintain dozens
1

have to write and


of “if/then” rules across hundreds or even thousands of campaigns.

2 All of the targeting rules have to be set in advance of ever having run the campaign, so

maintain dozens of
initial success relies solely on the experience and “best guess” capabilities of the marketer
configuring the campaign

if/then rules 3 Running A/B/N tests to optimize campaign efficacy remains a very manual, labor-intensive
process, often requiring a data scientist to get involved and spend weeks doing uplift or


propensity modeling, only to come up with a recommendation for improvement that, while

across hundreds of helpful, only positively impacts a small portion of a marketer’s total audience.

As a result of these challenges, marketers spend their time programming campaign rules,

campaigns. managing holdout groups and analyzing test results instead of being strategic or creative.

While it’s critical for today’s marketers to be “data-driven,” the pendulum has swung too far:
automated and programmatic campaigns have become so focused on improving short-term
opens and clicks that they overlook opportunities to optimize longer-term KPIs that directly impact
customer lifetime value metrics, such as average revenue per user and retention.

How To Hire a Machine – 14


EVALUATING AIM


SHIFTING THE
As marketing BURDEN OF LABOR
automation technology It’s no secret. Today’s marketers are mired in the manual processes of building

has advanced, the


targeting rules and segments across legacy marketing technologies.
As marketing automation technology has advanced, the role of the CMO has evolved
from strategist to technologist and statistician—leaving little, if any time for the

role of the CMO has creativity that sparked interest for a career in the field. Likewise, other highly paid and
highly skilled analytics and data science team members are spending much of their

evolved from strategist


time doing the menial tasks of pulling, organizing, and packaging target audiences
and manually designing and managing marketing experiments.
From Fortune 500 enterprises to smaller marketing teams, senior analysts, marketers,

to technologist and and even data scientists are spending much of their time pulling reports versus the
advanced analysis, marketing campaign strategy, or deep-dive insights that they’re

statistician—leaving
paid to do.
Data scientists, according to New York Times estimates, spend from 50% to 80% of
their time mired in the mundane labor of collecting and preparing unruly digital data.

little, if any, time for the Likewise, a recent Forbes article put the number at 80% based on survey results.
It’s repetitive, uncreative work done by highly paid, highly skilled people.

creativity that sparked While the prevailing thinking around AI focuses on job replacement, early adopting
orgs are experiencing a massive scale-up in velocity on their teams, while neither

interest for a career in


contracting nor expanding the human team. It’s a multiplier, not a replacement.
Utilizing AIM platforms, marketers are now running thousands of tests to continually
optimize the customer experience at scale. Rather than building static tests for each
the field. segment, the marketer sets their KPIs and creative experiences and the machine does
the rest.
Ultimately, the burden of labor is being shifted to machines, allowing marketers to
focus on the creative and strategic aspects of their jobs.

How To Hire a Machine – 15


AI IN THE WILD:
HOW COMPANIES ARE
USING IT TODAY

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AI IN THE WILD
OVERVIEW:

MAJOR MOBILE Major Mobile Carrier

CARRIER TRANSFORMS Subscriber base: 58.7 MM

CUSTOMER EXPERIENCE
EBITDA: $2.5+ B
Region: North America

THROUGH CORE AI TOP BUSINESS CHALLENGES:


According to Angela Sigley-Rittgers, Chief Marketing Officer - Sprint, Boost and Virgin
brands, prepaid mobile subscribers pose a unique marketing challenge. These Activating disparate user data to im-
subscribers are fickle, price-sensitive and have little brand loyalty especially in a hyper- prove the customer experience with
competitive marketplace with well-established brands upping the ante everyday to steal highly contextual, 1:1 cross-channel
their customers while upstart Mobile Virtual Network Operators (MVNO’s) offer over-the- messaging across email, SMS, and
top promotions to get in the game. call centers.
In addition, they’re dealing with challenges caused by legacy marketing technology and
siloed, rules-based systems that don’t allow them to adopt with any velocity or scale to the Optimizing marketing for customer
changing behavioral dynamics of their customer. lifetime value metrics: ARPU,
retention, and usage.
To address these challenges, Angela and her marketing team deployed a core AIM
platform to first; 1) knit together customer data from disparate sources within the Predict and intervene earlier for
enterprise to harness and expose the highly valuable behavioral data they knew they had; customers at-risk for churn.
then, 2) set the over-arching KPI or goal they wanted to achieve at the enterprise level—in
this case to increase top-line incremental revenue, and finally, 3) to prioritize a set of initial
use cases to drive that KPI.

Within 10 months of launching their AIM platform, Sprint saw a dramatic increase in AIM RESULTS:
Unique marketing experiments
marketing velocity. Simultaneously running 75 cross-channel campaign strategies with
more than 255,550 unique marketing experiments, their AIM innovation initiative yielded 255K running simultaneously
an ROI of more than 6.5X in terms of incremental revenue.
Testable permutations based on
Meanwhile, Sprint’s customer experience transformed from messaging based 2^886 customer attributes
on static segmentation and pre-conceived marketing rules, to adaptive, highly
contextual experiences based on each customer’s constantly evolving 6.5X 6.5X ROI
behaviors and profile data.

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AI IN THE WILD

OVERVIEW:
GAMING EVOLVES Leading gaming publisher

BEYOND AI NPCs Customer base: 15+ MM


While the gaming industry has long employed artificial intelligence to simulate Revenue: $300+ MM
human-like behaviors in non-player characters (NPCs), AIM technologies are
starting to gain traction with marketing, retention, and loyalty leaders at top Region: North America
gaming publishers to drive engagement throughout the entire player lifecycle.

At this well-known gaming publisher, marketers struggled to utilize the vast


amounts of data collected to drive meaningful, cross-channel interactions with
TOP BUSINESS CHALLENGES:
their player base. Increase revenues from its large
Historically, the company used customer acquisition to grow customers, but player base by increasing # of
were looking to increase revenues through activating their 15 million-member active payers and generating a
customer base. Their primary goals for doing this were to increase engagement, higher ARPU from its entire base.
convert players to payers, and encourage higher purchase amounts and
frequency. Scale and optimize marketing
without adding additional
Implementing a core artificial intelligence marketing solution to serve as
resources.
a system of intelligence between their CRM and in-app/email systems of
engagement, the publisher is now able to run approximately 300 dynamic
marketing experiments per day based on their full behavioral and profile data
Dynamically message to users


ecosystems. through multiple channels (push,
email, and interstitial).

Optimizing the use of customer data to drive meaningful 1:1 player interactions is key RESULTS
to increasing engagement in the gaming industry.
9,700 Unique marketing experiments
running simultaneously
Using the Amplero AIM platform, we’re running more than 9,700 unique marketing
experiments based on thousands of data points each day. This gives us the ability to
provide each player an optimal experience and map a dramatic rise in the 2^231 Testable permutations based on
customer attibutes
percentage of incremental revenue directly attributed to our marketing efforts.
— Chief Marketing Officer 4.3X Return on investment
Incremental revenue
7% lift of 7% and rising
How To Hire a Machine – 18
AI IN THE WILD

10 CRITICAL QUESTIONS TO ASK AN


AI MARKETING VENDOR
As you evaluate AI marketing solutions, here are 10 critical questions to ask any
vendor claiming AI capabilities.
1. What stages of the marketing process would still 6. Can the AI optimize for longterm KPIs
be managed by humans, and what is handled by such as 45-day revenue lift and 60-day
your machine? retention?
2. Can I set guard rails to protect brand and 7. Can it scale to tens of millions of
customer experience? customers and experiences?
3. What kinds of data can your system ingest? 8. How does the AI adapt to external
a. Demographic factors that may impact results (e.g., a
b. Psychographic/Intent competitor launching a new product or
c. Event stream/usage data price point to disrupt the market)?
d. Third party
9. Does the AI platform proactively surface
4. What channels can your system optimize? insights that would not be intuited
a. SMS through human analysis?
b. Email
c. Display 10. Can a BI analyst or data scientist
d. In-app drill-down or export data for offline
e. Web analysis and modeling?
f. Direct mail
g. POS
e. IVR
5. What aspects of campaign management does
your system optimize?
a. Audience tagging/segmentation
b. Content creation
c. Content sequencing
d. Personalization
e. Multivariate testing
f. Delivery time/channel
g. Orchestration
h. Measurement
i. Insights
How To Hire a Machine – 19
Want to learn more about how
artificial intelligence marketing is
driving ROI for global brands?

Contact info@amplero.com to
schedule an AIM consultation.

How To Hire a Machine – 20


SOURCES
[1] 5 Disrupters to Marketing: Part 5: Artificial Intelligence https://www.amplero.com/blog/posts/amplero-welcomes-former-pandora-ceo-brian-mcandrews-and-former-
salesforce-marketing-cloud-ceo-scott-mccorkle-to-board/
http://chiefmartec.com/2016/12/5-disruptions-marketing-part-5-artificial-intelligence/
[13] Amplero welcomes former Pandora CEO Brian McAndrews and former Salesforce Marketing Cloud CEO
[2] Worldwide Spending on Cognitive and Artificial Intelligence Systems Forecast to Reach $12.5 Billion This Scott McCorkle to Board
Year, According to New IDC Spending Guide http://www.idc.com/getdoc.jsp?containerId=prUS42439617
https://www.amplero.com/blog/posts/amplero-welcomes-former-pandora-ceo-brian-mcandrews-and-former-
[3] Worldwide Spending on Cognitive and Artificial Intelligence Systems Forecast to Reach $12.5 Billion This salesforce-marketing-cloud-ceo-scott-mccorkle-to-board/
Year, According to New IDC Spending Guide http://www.idc.com/getdoc.jsp?containerId=prUS42439617
[14] AI at the core. Humans at the helm. http://searchengineland.com/ai-core-humans-helm-274450
[4] Worldwide Spending on Cognitive and Artificial Intelligence Systems Forecast to Reach $12.5 Billion This
Year, According to New IDC Spending Guide http://www.idc.com/getdoc.jsp?containerId=prUS42439617 [15] Amplero expands artificial intelligence marketig platform for scalable intelligent and personalized cross-
channel marketing (https://www.amplero.com/blog/posts/amplero-expands-artificial-intelligence-marketing-
[5] Worldwide Spending on Cognitive and Artificial Intelligence Systems Forecast to Reach $12.5 Billion This platform-for-scalable-intelligent-and-personalized-cross-channel-marketing/)
Year, According to New IDC Spending Guide http://www.idc.com/getdoc.jsp?containerId=prUS42439617
[16] AIC presentation: https://www.amplero.com/blog/posts/sprint-ai-martech-presentation/
[6] Amplero welcomes former Pandora CEO Brian McAndrews and former Salesforce Marketing Cloud CEO
Scott McCorkle to Board https://www.amplero.com/blog/posts/amplero-welcomes-former-pandora-ceo- [17] Amplero expands intelligence marketing platform for scalable intelligent and personalized cross channel
brian-mcandrews-and-former-salesforce-marketing-cloud-ceo-scott-mccorkle-to-board/ marketing https://www.amplero.com/blog/posts/amplero-expands-artificial-intelligence-marketing-platform-
for-scalable-intelligent-and-personalized-cross-channel-marketing/
[7] Marketing executives predict artificial intelligence will revolutionize marketing by 2020. https://www.
demandbase.com/press-release/marketing-executives-predict-artificial-intelligence-will-revolutionize- [18] Three reasons A/B testing is dying
marketing-2020/
http://thenewnewthing.com/3-reasons-ab-testing-dying/
[8] AI Must Learn The Basics Before It Can Transform Marketing https://www.forrester.com/report/AI+Must+L
earn+The+Basics+Before+It+Can+Transform+Marketing/-/E-RES137223 [19] Why a machine will be your next hire http://www.econtentmag.com/Articles/Editorial/Industry-
Insights/Why-a-Machine-Will-Be-Your-Next-Marketing-Hire-114402.html
[9] How the managed services economy is shaking up marketing https://www.websitemagazine.com/blog/
how-the-managed-services-economy-is-shaking-up-marketing [20] Why a machine will be your next hire http://www.econtentmag.com/Articles/Editorial/Industry-
Insights/Why-a-Machine-Will-Be-Your-Next-Marketing-Hire-114402.html
[10] Olly Downs, Why a Machine Will Be Yuor Next Marketing Hire http://www.econtentmag.com/Articles/
Editorial/Industry-Insights/Why-a-Machine-Will-Be-Your-Next-Marketing-Hire-114402.htm [21] Why a machine will be your next hire http://www.econtentmag.com/Articles/Editorial/Industry-
Insights/Why-a-Machine-Will-Be-Your-Next-Marketing-Hire-114402.html
[11] AI at the core. Humans at the help. http://searchengineland.com/ai-core-humans-helm-274450

[12] Amplero welcomes former Pandora CEO Brian McAndrews and former Salesforce Marketing Cloud CEO
Scott McCorkle to Board

How To Hire a Machine – 21

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