First, it is important to understand what predictive technology is and what it does. 

al·go·rithm     /ˈalɡəˌriT͟Həm/

In computers science, a sequence of instructions – a small procedure that solves as reoccurring problem.

In today’s world, algorithms are everywhere. The most common example for most individuals would be social media. With marketing specifically, the algorithms will use demographics and previous behavior to track customers’ interests. Algorithms analyze your interactions as well as that of similar consumers.

Algorithms are based off sequences or a set of rules. Is this enough to provide accurate marketing to consumers? According to Accenture, 91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them. 

Personalization is key to successful marketing in our consumer-centered markets. An algorithm is not sensitive enough to understand context. It bases marketing off of sequences that were created from past purchases and similar consumers. Everyone is different and so are their decision-making processes. Algorithms cannot combine every possible variable and only have the ability to use certain variables that are set in their sequences or rules. This results in unequal distribution of weight put onto certain variables. A prediction is not the same as knowing.

Algorithms rely on rationality and certainty. Two factors that are not true of consumers. 

Human beings are....well....irrational. Dan Ariely, professor of psychology and behavioral economics at Duke, gave a wonderful example proving this point. Everyone knows that texting and driving is wrong, right? Well, most people have admitted to doing it at one point or another. It is never about the lack of knowledge; everyone knows that it is dangerous. Yet, humans still consciously make this irrational decision.

As for certainty, it is almost impossible to be 100% certain when only using past data and demographics. This past year has been a great example of this. There is no algorithm that could have predicted COVID-19. Due to the lack of real-time interaction and data, algorithms do not take into account other factors. It is all about the inputs it already has and the sequence that it is based on. Overall, algorithms favor patterned marketing activities. If 2020 has taught us anything, it's that life is uncertain, and patterns can easily be interrupted.

The moment you think you’ve developed an 'algorithm', your buyers have already moved on.

Algorithms are not initially biased, they are technology. The people who create them and the data put into them can create an unconscious bias. While no one wants to admit it, we all have biases whether they be big or small. The biases can end up in algorithms. It makes creating a bias-free algorithm extremely difficult. The human mind is complicated and hard to understand, so minimizing it down into sets of rules or sequences can become unproductive especially with accidental biases.

3 Birds does not rely solely on predictive technology and algorithms to market to your dealers’ customers. The combination of these two technologies is over a decade old. Why use old technology when the tech has evolved into so much more? Would you rather have a 2010 Blackberry or 2020 iPhone? For us, the answer is simple. We want your dealership to have marketing that is based on the best and newest technology. 

Understand; however, this is not to say that data and analytics have no place. Of course they do! And of course we incorporate predictive technology and algorithms in our marketing mix. But they are simply indicators of buyer behavior from which we try to understand buyer decision-making and thinking.