Crypto.com spent $700 million to put their name on a stadium in downtown Los Angeles. Mastercard is a sponsor of the PGA Tour. Dunkin Donuts hired Ben Affleck and Jennifer Lopez to star in a Super Bowl commercial. Businesses spend billions on marketing every year, but the question remains whether these campaigns translate into profits.
San Francisco-based startup Alembic is using big data techniques developed for contact tracing during the pandemic to answer these questions. The company today announced a $14 million Series A round including Jeffery Katzenberg, NFL star-turned-VC Joe Montana and Braze co-founder Mark Ghermezian.
“If you spend a dollar, does it actually produce a result? Until recently, the best you could do was be average,” said Katzenberg, a former Walt Disney Studios executive, founder of DreamWorks and backer of Alambic through its venture capital fund. WndrCo.
Katzenberg says that over the years he spent billions of dollars on marketing with no way of knowing if he was getting value for money. He compares traditional techniques for measuring the effect of marketing campaigns to “putting your finger in the air.”
But recent advances in AI and big data technology, he says, have made it possible to track the impact of marketing spend at a granular level, in real time.
“For every CMO, it’s somewhere between the Holy Grail, the fountain of youth and the meaning of life,” Katzenberg said, “it wasn’t achievable a year or two ago.”
CEO Tomas Puig says Alembic uses techniques developed by epidemiologists to track the spread of Covid-19, but applies that technology to calculating the ROI of marketing spend.
“Everyone says that MRNA is the only thing that came out of the pandemic in terms of technology, but that’s not true,” Puig said. The company uses AI models to process massive amounts of anonymized data – from location data to TV show fragments to proprietary customer data – to track exactly how much impact a business is achieving of a particular campaign.
“We can tell you tomorrow if this actually had an effect or if it didn’t, how much money are you burning by not stopping the campaign,” Puig said.
He says the company currently has about a dozen clients, including Billion-dollar chipmaker Nvidiawhich uses technology to guide its marketing efforts.
“This allows us to increase productivity in ways that weren’t possible before,” said Jensen Huang, CEO of Nvidia.
Although Alembic is still in its early stages, it’s just the latest example of how quickly AI technology promises to disrupt entrenched traditional industries like business marketing.