Category: Data-Labor-Technology Stories

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Ad Bubble? Investors have overestimated the growth potential of digital advertising, claims The Economist. Valuations are sky-high for Google and Facebook, which generate their revenue from ads, while mega-mergers like Comcast-NBCUniversal and AT&T-Time Warner’s pending deal are justified in part on the basis of… Continue reading »

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By Bryn Caruso — vp, sales & customer success at Julius

In less than five years, influencer marketing has gone from a trendy method of marketing amplification to a serious sales driver. We recently surveyed marketers and public relations professionals on the ways that they currently implement influencer marketing, and found that overwhelmingly, they focus their influencer marketing efforts on driving sales.

While encouraging brand advocacy was a close second response, it was clear that even that focus was in service to driving volume and velocity through the ever-changing purchase funnel.

As shown by the data, there were clear common issues that marketers wanted to address in order to optimize their influencer marketing. Across all of these goals, we identified that there were three salient challenges in particular that marketers will need to overcome in order to execute their most successful influencer marketing campaigns in 2018.

Obstacles to overcome in 2018

1. The need for more information about influencers

Those marketers who relied heavily on in-house efforts for campaign management found that a significant amount of time was spent vetting digital influencers as less information about them is made publicly—and readily—available, especially when compared to traditional celebrities. Yet with today’s complex social dynamics and concerns of appropriateness, these efforts will only increase. Plus, marketers surveyed found that the influencer space is getting crowded, making it increasingly difficult to find quality influencers.

The shift to software supporting these in-house efforts provided a basic level of comfort, due to the added level of knowledge. This helped marketers face the challenge of vetting quality influencers vs. a “spray and pray” approach.

2.    Standardization in proposals and pricing

Not all influencer marketing campaigns are created equally. Nonetheless, marketers in 2018 are looking to standardize proposals to both increase efficiency and make the process more comparable. Easily comparing influencers by their reach on their respective social platforms and sending standard rates per-post or per-video created will be paramount this year.

 

3. Increasing analytics to continue to prove the ROI

One challenge that the surveyed marketers had previously faced was the ability to easily show the performance of their campaigns, including the complete value of their chosen influencer from first post to last reached follower. As the entire influencer marketing world moves to increased accountability for sales funnel contribution, so does the desire for an increase in reliable metrics.

Influencer marketing isn’t just here to stay; it will continue to see robust growth in 2018. It’s clear that with more information, marketers are more strategic: vetting the influencers, standardizing process, costs, and protocols, and accurately measuring campaign effectiveness. Through increased focus on these aspects, marketers will be able to make more informed decisions and find the best representation of their brand.

The post In 2018, influencer marketing is about driving sales appeared first on Digiday.

Digiday’s “Research in brief” is designed to give you quick, easy and digestible facts to make better decisions and win arguments around the office. They are based on Digiday’s proprietary surveys of industry leaders, executives and doers. See our earlier research on whether publishers are making money on Facebook here.

Until technology replaces the human workforce, brands will look to implement it to improve their marketing campaigns and drive consumer purchases.

The post Digiday Research: Brand marketers see more potential in AI than other technologies appeared first on Digiday.

Facebook’s news-feed change is likely to cut into the money publishers can make from producing and distributing custom branded and sponsored editorial videos on the platform, their top source of revenue on Facebook.

Top Facebook publishers can nab a 50-70 percent margin on custom branded videos they distribute on Facebook after paying for production and paid media, according to four publishing sources, including three executives from publishers with at least a billion monthly views on Facebook. With Facebook counting views at 3 seconds, the cost per view has been incredibly low — “less than a penny,” one source said — which means top publishers can scoop up plenty of ad dollars based on their organic reach on Facebook.

There was even more money to be made from sponsorships of editorial videos that publishers already had on their schedule and required no additional production dollars — “essentially free money,” as one exec at a top Facebook publisher said. And it helped that the typical, made-for-Facebook news-feed videos — short, silent, text-on-screen autoplay clips — are cheap to churn out.

Facebook is about to get more costly
With Facebook clamping down on media within the news feed, these executives have legitimate concerns that it could impact how much money publishers can make from custom and sponsored videos. For instance, the cost models for branded content will likely change. As three executives said, it will cost more to run paid campaigns to seed videos in front of users in the news feed, which will cut into profit margins.

“My gut says a lot of people are going to have to increase paid budgets to hit their guarantees,” said one CRO of a digital publisher. “Candidly, does that change anything? I’m not sure — a lot of people were already masking that they were putting paid media behind some of this content — but it probably will affect the bottom line in some way.”

How much this impacts publishers’ overall revenues remains to be seen.

“No one knows what’s going to happen, so we’ll wait and see what this means for our branded stuff — we might have to charge more,” said one executive at a publisher that reaped “eight figures” in branded video revenue from Facebook in 2017.

One potential way to make up for losses in branded-content revenue is producing brand-funded shows for Facebook Watch or selling sponsorships into existing Watch programming (with the exception of Facebook-funded shows). One top Facebook video publisher said it’s been pitching advertisers on broad campaigns that include sponsorships of some of its self-funded Watch shows. This assumes, of course, that Facebook keeps prioritizing Watch programming in the news feed.

“Facebook wants people to watch longer videos so they can get to the pre-rolls and mid-rolls, but no one is going to Facebook for that right now,” said the CRO. “The hope is that the news feed is going to favor [Watch] so people can hit the mid-rolls.”

“We’ve been waiting for this [change] for quite some time, which is one of the reasons that we leaned so, so, so hard into Watch in the first place,” said the CEO of a big digital publisher. “This move makes Watch an even bigger focus.”

Top digital publishers say they have a better safety net
According to Digiday research, 86 percent of publishers make 25 percent or less of their video revenue on Facebook — which points to how unsuccessful Facebook has been in building an ad revenue-sharing product that works for media companies. But almost all the video ad dollars publishers can make on Facebook come from branded content, not Watch, publishing executives said. Even if Facebook isn’t the biggest driver of video revenue, it’s responsible for a decent chunk for many publishers.

Multiple bigger digital publishers are banking on the idea that their businesses are becoming diversified enough that the news-feed changes won’t hurt them as much as it will publishers that heavily rely on Facebook for reach and revenue. One head of a brand content studio at a top Facebook publisher said roughly 15 percent of the company’s revenues — “single-digit millions annually” — come from custom videos solely produced for Facebook. This company also distributes branded videos on YouTube, other social platforms and its own website, which will ideally mitigate the impact of Facebook’s changes.

“I do think [the changes] are going to whittle away a fair amount of the digital players that are out there, but for ourselves, we have some time to figure this out,” this exec said. “You never want 90 percent of your business from something you don’t control.”

Other Facebook video giants point to their organic reach on the platform — their ability to get videos watched and shared without running too much paid media behind it — as a reason they’re not too worried about the algorithm change.

Attn, which did 255 million video views on Facebook in December, according to Tubular Labs, said its branded-content engagement is 4.4 times higher than the Facebook average, citing data from research firm Brandtale. Attn co-founder Matthew Segal pointed to a recent six-minute branded video featuring Keith Richards and Sheryl Crow, which has more than 3.5 million views and 38,000 shares, as evidence of its success in this area.

“Very few people are accidentally watching a 6 1/2-minute-long video featuring older rock stars,” Segal said. “They are making an intentional decision to watch it once they see it on their feed, which Facebook wants.”

Publishers are looking to diversify beyond Facebook
There’s also an opportunity for top digital publishers to sell branded video campaigns that run across other platforms in addition to Facebook.

This is what BuzzFeed does, charging a flat cost per view and guaranteeing total views across multiple platforms, including YouTube and its own site, according to a source and confirmed by the company. BuzzFeed also pointed to its expansion of its Tasty and Nifty brands, built on Facebook, to Snapchat Discover and other platforms. BuzzFeed also has an entertainment division creating shows for YouTube, streaming platforms and TV, and has been building out its commerce business, a company spokesperson said.

Bleacher Report, too, has been diversifying its business with entertainment programming, growing its app audience and other ventures.

“A lot of media brands, Bleacher amongst them, made these changes because we saw [Facebook’s move] coming for a long time,” said Howard Mittman, CRO and CMO of Bleacher Report. “It’s the ones who got over their skis and relied too much on a single distribution mechanism that will have trouble.”

Meanwhile, those looking for a quick near-term fix see Instagram as the natural place to look for revenue — and those willing to take some time and invest in platform video programming can move resources to YouTube. (Snapchat, meanwhile, is about to go on a publisher charm offensive.)

“You’re going to start seeing Instagram cluttered with even more video because it’s the same format as Facebook news feed,” said the digital publisher CRO. “In theory, you can still get organic reach on Instagram — until [Facebook] corrects that, too.”

Unfortunately, Facebook’s news-feed change could also lead advertisers to conclude they don’t need publishers to create and distribute content for them. If brands can hire studios directly and pay for distribution on their own channels and get the same reach, why work with a media partner?

Said the CRO: “The big thing is, if the organic reach also sucks and it doesn’t matter if the video comes from a brand or publisher’s handle, brands have lost the reason to distribute with publishers.”

The post Facebook news-feed changes will cut into publishers’ branded-content revenue appeared first on Digiday.

Google has been using page speed to rank sites for desktop search results, and now it’s getting ready to do the same for mobile. In a blog post published Jan. 17, it said that starting in July, page speed will be a ranking factor for mobile searches. Google said the “Speed Update,” as it’s called, will affect pages that deliver the slowest experience to users and will only affect a small percentage of queries.

We decided to see how the top publishers’ sites perform on mobile, using Google’s own speed test. (This list is based on the comScore 200; in cases where the parent company is listed, we used the biggest or flagship site.) A few observations: The sites that ranked fast aren’t all digital natives, and some of the sites that get hyped as tech-forward don’t deliver, at least when it comes to speed. And size isn’t always an advantage: The slowest sites included CNN, MailOnline and The Wall Street Journal.

Publisher	Mobile speed
The Atlantic	fast
Better Homes & Gardens	fast
Business Insider	fast
Bustle	fast
Cosmopolitan	fast
Diply	fast
ESPN	fast
Everyday Health	fast
Gizmodo	fast
The Hill	fast
HuffPost	fast
International Business Times	fast
Los Angeles Times	fast
National Geographic	fast
New York magazine	fast
NY Daily News	fast
NPR	fast
PBS	fast
PopSugar	fast
Refinery29	fast
SheKnows	fast
Verywell	fast
ABC News	average
AOL	average
BBC	average
Bleacher Report	average
CafeMom	average
Complex	average
Fox News	average
Guardian	average
LittleThings	average
Mashable	average
New York Post	average
The New York Times	average
Ozy	average
People	average
Purch	average
Thrillist	average
Upworthy	average
U.S. News & World Report	average
The Telegraph	average
Vice	average
Vox	average
The Washington Post	average
WebMD	average
Wired	average
Yahoo	average
CNN	slow
MailOnline	slow
NBC News	slow
Reuters	slow
The Wall Street Journal	slow

The post Google’s emphasis on mobile page speed will hit CNN, WSJ and other top sites appeared first on Digiday.

Commerce-focused publishers looking to deepen their ties with retailers and limit their dependence on Amazon are delivering more than just interested audiences these days.

Using conversion data from e-commerce transactions, commerce publishers are giving retailers recommendations on everything from discounting strategies to the look of retailers’ landing pages to the prices of the items themselves. They are also using site search and influencer data to help retailers know what products to promote to customers. Some are considering licensing this data, but for now, most provide it for free in hopes of benefiting indirectly because if the retailers’ sales improve, so will the publishers’ cuts.

PopSugar gives retailers data on which products and brands are most popular with its audience and 20,000 Instagram influencers.

Tech-focused publisher Purch uses audience data that tracks its readers across sites and devices to help retailers optimize everything from sales offers to the design of their sales pages.

Ziff Davis started advising retailers on how to improve conversions 10 years ago. It now provides data to certain ones so they can optimize the offers they make to customers. In the fourth quarter, it advised retailers on their mobile commerce checkout strategies. (The publishers wouldn’t give specific examples of retailers they’ve worked with.)

Such moves will become more common as e-commerce continues to eat into brick-and-mortar retail, customers get more comfortable buying products online and publishers search for revenue streams outside of advertising.

“It’s absolutely grown in sophistication,” said Doug Llewelyn, president and chief operating officer of Purch. “Way too many publishers think they can put affiliate buttons on their page and say it’s content and commerce.”

Publishers that have strong positions in search results and credibility with their audiences can do this kind of advising because they often have a more comprehensive view of the market than an individual retailer.

Ziff Davis, for example, recently convinced one of its partners, a “brand-conscious, boutique-y retailer” that it wouldn’t name, which seldom offered discounts, to try a discount offer it had never tried before.

The move, which was informed by conversion data Ziff had gathered from that retailer and others, led to a substantial increase in the average order size without affecting conversion rates, drastically improving Ziff’s payout.

“It’s almost like free consulting for them,” said Howard Schaffer, Ziff Davis’ head of audience. “Merchants are very good at saying, ‘We’re gonna do what we’ve done in the past,’ even though a lot of times they don’t even have good data to see how that’s performed.”

The collaborations can grow deep. Purch has enough best practices about what kinds of landing pages convert that it built its own template, which it periodically offers to retailers.

On multiple occasions, Purch has delivered so much information that improved conversions for retailers that the retailers put the publisher in charge of custom-designing those retailers’ site landing pages. Llewelyn said those retailers each pay Purch millions of dollars per year in affiliate commissions.

“Commerce publishers are literally a click ahead of retailers,” said Shirley Chen, Narrativ’s founder and CEO. “The best editors today act more like market researchers than just regular experts. You often see a lot of publishers pushing back on promotions their retailers work with because they know it’s not best in class.”

There are obstacles to working together. Retailers normally interact with publishers through their marketing teams, which are typically far removed from the product teams that have direct control over the sites’ look and feel. And retailers often get apprehensive about doing anything that might compromise their SEO efforts.

“It’s often a long game of telephone,” Schaffer said. “Marketing has to go to product, who has to go to engineering, who has to go back to product and so on. It becomes a hassle.”

And publishers have run into indifference from retailers that didn’t see much point in messing with a revenue stream that was growing anyway.

“Personalization has been one of the biggest things on our clients’ road maps this year, and publisher data is key to that,” said Matt Faulk, the CEO of the agency Basic, which has designed e-commerce strategies for clients including Beats by Dre, Ubisoft and REI. “You’ve got to get the use cases and distill it down so you can see what’s converting and what isn’t.”

While the data and assistance publishers are able to provide to retailers may help grow revenues, none of it will be able to replace Amazon. According to Narrativ estimates, a full half of the transactions that commerce publishers initiate are converted by Amazon.

But what the changes do offer is a chance to build durable relationships that will be key to long-term growth. “Way too often, [commerce content] becomes a tactic, not a strategy for publishers,” Llewelyn said. “We see it as our business model.”

The post How commerce publishers use their data to cozy up to retailers appeared first on Digiday.

In 2018, talk about cryptocurrency moved beyond a niche area among finance geeks to a mainstream one that’s part of popular culture. It’s made it into dinner table conversation among families. Companies that mention blockchain have seen their share prices gone up. Bitcoin has stood in the way of friendships.

Now, publishers are getting in on the frenzy. Media companies from Business Insider to Investopedia are all creating new products, from newsletters to video — but the pressure is also on to differentiate. It’s impossible for them to cover everything, and finding a niche is the way to grow audience reach and keep loyal readers engaged.

Read the full story on tearsheet.co

The post How publishers are cashing in on cryptomania appeared first on Digiday.

In the wake of Facebook’s announcement that it would deprioritize publishers’ content in its news feed, the need for publishers to diversify their traffic sources has never been more urgent. In the U.S., HuffPost hasn’t let the Facebook feed changes deter it from growing niche communities through Facebook groups and pages. HuffPost UK is taking a different approach, expediting a newsletter strategy that targets engaged groups of people on specific topics.

“We’re seeing a trend in deepening engagement through richer formats that reach people, not necessarily through Google and Facebook,” said Jack Riley, international strategy director at HuffPost. “Our aspiration is to create deeply engaged communities of people around specific topic areas.”

The most recent example in the U.K. is Gym Buddies, a fitness-focused daily newsletter featuring three links to HuffPost UK content around workout advice, fitness jargon explainers and interviews with athletes and fitness fanatics. Newsletters account for nearly 8 percent of HuffPost UK’s desktop referral traffic, while social accounts for 18 percent of referral traffic, according to SimilarWeb data.

HuffPost UK has 10 newsletters, including The Waugh Zone, a daily political briefing written by politics executive editor Paul Waugh; a weekly Brexit briefing newsletter; and weekly and daily news newsletters. The newsletters feature a mix of content from HuffPost and links to content from other publishers, with the exception of The Waugh Zone, which is a standalone editorial product similar to Quartz’s newsletters. The Waugh Zone, which started in June 2015, has almost 21,000 subscribers and one of HuffPost UK’s highest open rates, according to the publisher.

HuffPost UK plans to add more topic-specific newsletters in the coming months, although the topics still need to be decided.

“We’re testing out what the engagement benefits are of having a more developed newsletter strategy, whether that means more branding, more resource, and how this affects metrics,” said Riley. “We have to make sure the engagement metrics are nuanced enough to show how people are deriving value from it.” Newsletter measurement can be tricky, as some publishers use them as standalone editorial products, rather than to drive readers to their own sites where they can track more elements of user behavior.

For topic-specific newsletters like Brexit and Gym Buddies, the content is published on-site, tweeted and sent through push notifications on Apple News. “Key for us in creating engaged communities on specific topics is acknowledging that readers are open to receiving content in multiple channels,” said Riley. “It’s more reflective of media consumption across multiple media.”

Riley said HuffPost UK has seen referral traffic from sources outside of Facebook climb over the last year, noting news aggregator platforms like Axel Springer’s Upday, Flipboard and Apple News as the fastest growing. Combined, these three platforms now drive significantly more traffic for HuffPost UK than Twitter does, he said.

News aggregator platforms have evolved from being purely algorithm-driven to building large editorial teams that are charged with selecting which content to showcase. Now, they use a combination of algorithms and editorial teams to prioritize content in their feeds. “You couldn’t really talk about specific editorial decisions,” said Riley. “Now, you can talk editor to editor. It’s a bit of a shift from guessing the Facebook and Google black box and a healthy one for the news ecosystem.”

While plenty of publishers grumble about poor monetization from Apple News, HuffPost UK has seen traffic and monetization on the platform grow in the last six months. The publisher, which sells the ads that appear in its Apple News content, said clients are repeatedly booking campaigns. “It’s not just engagement we’re seeing; we’re driving value from it,” Riley added.

The post HuffPost UK plans more topic-specific newsletters appeared first on Digiday.

Marketers have realized that influencer marketing is not going away anytime soon. As they spend more and more ad dollars on it, many brands have started creating internal influencer marketing teams to take more control over their relationships with social stars and campaign performance.

“Brands building in-house influencer marketing teams is probably the No. 1 trend in the industry right now,” said Gil Eyal, CEO of influencer analytics platform Hypr. “It started around last year and is really taking off this year, especially in the fashion and beauty categories. This is largely because more and more brands want to nurture long-term relationships with influencers.”

Much like ad tech, two models exist for moving influencer marketing in-house: Brands either assemble a team to manage influencer campaigns independently, from influencer outreach to campaign setup and execution to measurement; or they hire an in-house influencer czar to strategize influencer marketing, using tools to manage influencer relationships, but those brands still rely on agencies to execute campaigns, according to influencer marketing executives. And since many brands want to at least control influencer relationships — if not the full campaign — themselves, many influencer marketing platforms are pivoting to call themselves “influencer relationship-management platforms,” according to Eyal.

Either way, brands seem to be aggressively hiring for influencer marketing roles. For instance, HelloFresh is looking for a senior associate for influencer marketing to support its “rapidly growing influencer marketing efforts,” while L’Occitane seeks an influencer marketing manager with “extensive knowledge of the influencer marketing landscape,” existing relationships with content creators and the ability to execute campaigns and analyze results. Nike, on the other hand, is recruiting a brand manager responsible for identifying influencers.

At Birchbox, its senior manager of brand marketing oversees influencer efforts, with assistance from the company’s social content and PR teams. This is because Birchbox’s business model is complex and the brand actually resonates most on social with women who are not into beauty, so finding this group that is not inherently looking for Birchbox is challenging, according to Jenna Hilzenrath, director of public relations for Birchbox. “Managing influencer marketing in-house allows us to be nimble and take a really hands-on, nuanced approach,” she said. “That said, we do occasionally work with agencies or other platforms on a project basis.”

Eyal said that around half of his clients are bringing influencer marketing in-house. Small companies typically have one person, while big brands have a team of six to 10. “Don’t feel surprised if you see a 25-year-old be in charge of a brand’s influencer marketing that represents a pretty significant amount of the company’s ad budget,” he said.

Adam Rivietz, co-founder of influencer marketing platform #Paid, has also noticed an uptick in brands bringing influencer marketing in-house. He said that in Canada, 80 percent of his clients are agencies and 20 percent are brands, while the split is 50-50 in the U.S. “Brands in the U.S. have a bigger budget,” said Rivietz. “They are more willing to test influencer marketing on their own, and they want to take more control.”

Rivietz said brands like Nike and Mars have run influencer marketing internally for a while. One big benefit of this for brands is the ability to curate their own lists of top performers and then maintain longtime relationships with those individuals. “Influencers are more interested in long-term partnerships — like traditional sponsorships — than one-off deals. And they look more genuine to their followers this way,” he said. “On the flip side, brands don’t need to go out and find influencers every week or every month. They can also get a better price with long-term deals. Economies of scale apply here.”

Eyal and Rivietz both believe the cost of an ad campaign for a brand could skyrocket when an ad agency is involved. “Sometimes, our proposal for a brand gets lost in translation when an agency relays our message to the client,” said Rivietz. “Of course, for us, a big advantage of working with agencies is they introduce us to many other clients.”

Steve Buors, co-founder and CEO of digital marketing shop Reshift Media, thinks that while brands could use a variety of self-serve influencer marketing tools, agencies have more in-depth knowledge of measurement, as it’s hard to calculate the return on investment of influencer marketing.

“When you work with the right agency, you bring in another level of sophistication,” said Buors. “Influencer marketing is not the same as a Facebook ad where you can draw a direct line between your messaging and sales, but marketers always want to create some degree of connection of, if I do this, what can I get from it?”

The post Brands are bringing influencer marketing in-house appeared first on Digiday.

Since launching “TommyNow,” a series of fashion collections made immediately available for purchase worldwide as they sashayed down the runway on co-designer Gigi Hadid and her crew of models, designer Tommy Hilfiger has never moved faster. For one, the collection goes from design to market in six months, a clip three times faster than traditional collections.

“If you fall behind, catching up isn’t an option,” he said during the NRF Big Show conference last week in New York. “Listening to the customer is very important, and what the customer wants is immediate gratification. I want them to see something on the runway, click and buy it. I want the fastest delivery and the most incredible experience. If there’s no risk, there’s no reward, and our risk was changing our entire design and production process.”

With the exception of Burberry, other designer brands have failed to launch see-now-buy-now collections on Hilfiger’s scale, but the need to speed up the production process is industry-wide. As brands work to eliminate inefficiencies in the production process, artificial intelligence, in particular, is playing an increasingly critical role in not only manufacturing and supply chain logistics, but in the creative design process as well. It’s a tool that’s catching on among legacy brands, technology providers, student designers and retail startups alike.

“How can data make us smarter?”
For Tommy Hilfiger, AI serves as the launchpad that gets the creative process off the ground.

Recently, the brand announced a partnership with IBM and the Fashion Institute of Technology that uses IBM Research AI tools to decipher real-time fashion industry trends, ongoing customer sentiment around every Tommy Hilfiger product and runway image, and resurfacing themes in patterns, silhouettes, colors and styles. Using AI, this massive library of visual and textual content is drilled down into decipherable data and served back to the human designer on the other end, who can then use it to make informed decisions around the next collection as it’s designed.

Questions like, “How did this shirt style perform five seasons ago?” “What color schemes are trending now?” “Is this trend close to being over?” and “What was our most popular piece in the last three runway collections?” can be answered in a matter of minutes. AI is essentially drawing informed inspiration from past and current fashion trends, inside and outside of the brand, immediately — a task that would take a human on a design teams days or weeks to achieve, and on a much less scientific level. Certain information scraped by the algorithms would be impossible for a human to acquire at all. For instance, the machine gathered Amazon and Zolando reviews for Tommy Hilfiger items to understand not just positive or negative reactions, but customers’ views on items’ fit, color options, price and quality.

“The goal was to equip the next generation of retail leaders with new skills and bring informed inspiration to their designs with the help of AI,” said Avery Baker, the chief brand officer at Tommy Hilfiger. “AI can identify upcoming trends faster than industry insiders to enhance the design process.”

The purpose isn’t to replace the creative process — that gut feeling, human eye or impulse — with a series of objective 0s and 1s. The purpose is to reduce the “brain clutter,” as Baker called it: the laborious tasks that delay the creative process, like trend and archive research.

“We wanted to know: How do we eliminate the repetitive tasks? Once you do, you can focus yourself elsewhere, instead of manually scanning Instagram and Pinterest. We’re pulling insights that brands can use again and again, from massive data pools,” said Chris Palmer, the global cognitive offerings lead at IBM. “This is not the same as the creative process, and it’s not replacing it. It’s answering: How can data make us smarter?”

Robot, meet designer
Tommy Hilfiger’s new partnership with IBM and FIT is a small step of progress toward a fashion world that fuses artificial intelligence into the design process. While it’s a leading move in the traditional contemporary and luxury designer spheres, which can be slow to adopt new technology, it’s happening in much fuller force elsewhere.

Online styling service Stitch Fix, which went public in the fall and is projected to bring in $1 billion in revenue in its financial 2017, used troves of personal customer data and feedback (Stitch Fix members are asked to review every piece of clothing they receive in a style box, whether they buy it or not), plus artificial intelligence to design its first in-house line of clothing last year. Called Hybrid Design, the line is made from a series of algorithms that combs the visual and textual data to determine what styles don’t already exist in Stitch Fix’s inventory and are positioned to perform well.

A Stitch Fix Hybrid Design top

The items made with Hybrid Design are entirely cultivated by a machine. The humans on the design team at Stitch Fix only approve them, to make sure nothing “wonky” happens, as Stitch Fix chief algorithms officer Eric Colson phrased it.

“Most of our styles have had volumes written about them, thanks to customer reviews,” said Colson. “It’s next to impossible to parse all of that by a human, but algorithms distill it down: Here’s how to make sense of these reviews, who will love what and who won’t. In the same way, we match what other people have said about something to a client’s preferences, and new styles are curated based on that learning. You can reduce variants by aggregation and end up with a blouse that’s made up of the most popular style, color and silhouette.”

Stitch Fix, which was built on the pervasive idea that data science could improve retail, has made strides in AI that most brands haven’t yet touched. It’s also not designing algorithm-based fashion with the goal to set trends or become a fashion tastemaker — quite the opposite. These Hybrid Designs are meant to blend in with the inventory from the other 500 brands Stitch Fix works with. But the underlying value of AI remains: Set the machine in motion so humans are freed up to do more creative tasks.

As Italian lingerie brand Cosabella wanted to move more into other categories like loungewear, sleepwear and swimsuits, artificial intelligence played a role in deciphering a customer’s life cycle with the brand. Becoming a “lifestyle” brand is a risky move, so Cosabella CEO Guido Campello wanted to navigate the transition in the smartest (read: data-backed) way possible.

“Each time a new customer starts and stops shopping with us, we learn a little more. Does she want boyshorts? Lace? No lace? We can design better and faster with all these customer preferences and demographics in mind,” said Campello.

Cosabella’s design process used to work 24 months ahead of its sale schedule. Using AI, that’s been reduced to six weeks for some items.

“All designers and brands would benefit from adopting this technology into their design processes, and eventually, it’s going to change the way all brands go to market,” said Ed Gribbin, president of apparel consulting company Alvanon. “If you had the chance to get better product that your customer is more likely to buy to the market faster than competitors, I don’t know why you wouldn’t do it.”

Vetting the next generation
FIT student designer Grace McCarty won the design contest hosted by IBM and Tommy Hilfiger with her Tommy Hilfiger-branded raincoat. The contest asked students to design a product they thought could fit into Tommy Hilfiger’s arsenal using AI and wearable tech.

Image: Grace McCarty

McCarty’s raincoat included a removable bottom layer that was threaded with color-changing fabrics that responded to an analysis of voice and social media feeds, using AI. But it wasn’t the futuristic, wearable technology aspect of the design process that opened McCarty’s eyes to where fashion is headed.

“I believe that AI and technology will eventually change people’s lives through fashion,” said McCarty. “But it also taught me that technology in fashion isn’t only wearables. It can play a role in the design process that doesn’t actually change the design process at all; it just makes it easier. It made me approach things differently.”

Michael Ferraro, the executive director of the Technology Lab at FIT, said collaborative efforts like the IBM and Tommy Hilfiger partnership, which bring together students and staff across marketing, manufacturing and design departments, will serve as the blueprint for where FIT’s program is headed.

“AI is a tool that augments your existing toolset and mindset. It’s designed to inform your decisions,” said Ferraro. “That’s going to be incredibly powerful.”

The post How artificial intelligence is informing how fashion designers create appeared first on Digiday.