Cars aren’t the only thing Volkswagen wants to automate. Artificial intelligence is managing the brand’s media buys in Germany and proving to be more effective than its media agency.
Whenever Volkswagen uses the recommendations from Blackwood Seven, a Danish media agency that uses AI and predictive analytics to forecast ad spend decisions, it sells more cars than it would have if it had gone with its media agency’s recommendation, according to Lutz Kothe, the head of marketing for Volkswagen’s passenger cars in Germany. Kothe said his team uses Blackwood Seven’s algorithm to buy the right ads based on sales.
Defining a role for the AI platform, however, has taken Volkswagen a while. Two years ago, the advertiser ditched MediaCom and gave its digital business in Germany to Blackwood Seven. At the time, Kothe wasn’t sure the algorithm would be able to deliver better media recommendations than its agency, but the initiative has worked. And then some. In some instances, the difference between the algorithm’s and its agency’s car orders has been as high as 20 percent, revealed Kothe.