Jim Sterne is an international speaker on electronic marketing and customer interaction. A consultant to Fortune 500 companies and entrepreneurs, Sterne focuses his thirty years in sales and marketing on measuring the value of the Internet as a medium for creating and strengthening customer relationships.

Jim is the producer of the international Marketing Analytics Summit  and is the co-founder of the Digital Analytics Association.

Named one of the 50 most influential people in digital marketing by the United Kingdom’s premier interactive marketing magazine, Jim was more recently was named one of the top 25 Hot Speakers by the National Speakers Association.

Jim offers in-house workshops that bring your marketing department up to speed on Artificial Intelligence for Marketing.

Disclaimer: Links on this website may be amazon affiliate links, meaning if you purchase a product through those links, it will help this podcast by providing a small referral fee.

Yudan Lin – Unexpected Data

Data, Data Science, machine learning and artificial intelligence are fully known as buzzwords. While some believe that a technology or marketed ecosystem can make the difference for the businesses who knows the real purpose of artificial intelligence. I’m Yudan Lin. And today in Unexpected Data, you will hear the story of the belief that artificial intelligence has the ability to help marketers and brands become more human. Being emphatic, making life better, and unlocking the full potential of each of us. Those are the main values of Jim.

Jim Sterne

It means two very different things. On the one hand, it is the absolute joy, the oxytocin release, when I’ve discovered something in the data that will be a value to the organization. I did a pivot table, I did a visualization, I put two and two together, and, and it became five. That’s the thrill of discovery.

The other unexpected thing has come up because of COVID. And that is all of the astonishingly horrible ways. That data has been represented by newspapers and magazines and television, just to be sensational, and you dig underneath just a little bit and find out that their methodology is all wrong. That was completely unexpected. I thought we were better than that. And turns out we’re not.

The brief version of my backstory is: I sold Apple II computers out of a retail store in Santa Barbara in the 1970s. I sold business computers to companies that had never owned one before, in the 80s. I sold software development tools to large corporations and government. And then 1993, I tripped over the internet, suddenly saw that sales and marketing were going to change dramatically. So from that point, I started public speaking and writing books. Trying to get people to make their websites better, that was my whole focus. The internet was awkward and clunky and we had blink tags and just did it horrible. It is like we can do better. And then in 2000, I started coming across companies that were doing web analytics and said, “Oh, it’s not just my opinion. It is: we can measure this stuff. I can show you numerically that this is better than that”. So I started my own conference, the Marketing Analytics Summit, and I’ve been trying to help him make absolutely wonderful customer experiences, because we have analytics.

Yudan Lin – Unexpected Data

Did you hear it? He had sold computers successfully when no one even knew what it was. I present to you Jim Sterne, an international and reknown Digital Analytics expert. He is today helping businesses and talented people to grow in the digital world. For this episode, I had the pleasure to talk to him about his last book called ‘Artificial Intelligence for Marketing: Practical Applications’. Published in 2017, Jim Sterne was not only ahead of his time, but also confirmed his position as pioneer when it comes to analytics. With a fabulous touch of humor and explicit examples, Jim makes it easy for all of us to understand artificial intelligence applications. But first, everything start with a philosophy.

Jim Sterne

Data and technology are a means of understanding people better. “What, what are people doing? What are they trying to accomplish? How can we help them? ; ” is sort of the center of my marketing philosophy ; this is how you build a business. It’s how you advertise your business. You, you empathize with the people that you want to buy your product, and you show them how you can make their life better. For that you have to understand what their problem is, and understand what motivates them, so that you can communicate your value to them in those regards. If I have data, then I have a window into their intent and their desire and their motivations. The technology is a means I have interest in analyzing new data. So I have to acquire technology in order to collect the data and acquire more technology to do the analysis.

Yudan Lin – Unexpected Data

So that is putting roles like data analysts and data scientists in the center, being the voice of the consumers and helping marketers making a decision or solving a problem. And Jim, he has spent 10 years doing public speaking and keynotes on what is the internet and how to use it for marketing. He is a professional explainer.

Jim Sterne

My area of interest is the translator between the technology and the user. The technology is a fabulous tool that’s unfortunately difficult to understand. So I take it upon myself to be the explainer. Being that translator is the fun part. This is what an Apple computer is about. This is what a business computer is. This is what the software development tools can do. This is what the World Wide Web is all about. I spent 10 years doing public speaking and keynotes on what is the internet and how do I use it for marketing. And today, my keynote speeches are what is artificial intelligence and how do I use it in marketing. And oh, by the way, I don’t know anything about artificial intelligence. But it was obvious to me that artificial intelligence was one of the most powerful new things to come along.

Yudan Lin – Unexpected Data

And Jim took this opportunity to write his book.

Jim Sterne

It is a personal PhD. I contacted all the people that I know and a large number of people I did not know yet and ask them to explain it to me.

Yudan Lin – Unexpected Data

And the explanations from some people were so good, that you can find them directly in his book. Some were even so precise and detailed, that it could have led him to become a data scientist.

Jim Sterne

But that’s not me. My My interest is in the public speaking and writing. My background is in English Literature. So my fascination and my motivation was: “how do I help other people use this? Not? How do I get them to become data scientists? How do I educate marketing people enough so that they understand what it is and where it’s useful?” and if they get hooked and interested. Well, great. We need more data scientists. That’s terrific.

Yudan Lin – Unexpected Data

As the organization is changing with data and analytics, the way to do marketing is also.

Jim Sterne

When I think back at when I learned how to do marketing, when I was selling business computers, locally, to small companies who’d never owned a computer before, marketing was knocking on doors. We did not advertise in the newspaper. We did not do direct mail, I would go to the library and look up what businesses are in my city that are large enough that they might need a computer. And I would go knock on the door and talk to the receptionist. Who here should I talk to about a computer? And they have no idea to this conversation. When I started doing explanation of what the internet is, I would call up companies and say, “who is responsible for your website?”. And here’s here’s a great piece of advice. If you want to know more about a company if you are going to go in for an interview for a job, if you want to partner with them. If you just want to learn more about them, call up and say “I’m writing a book I’d like to interview somebody at your company about this subject matter. Who would be the best person?” that opened a lot of doors. So who’s responsible in the early days for the website, it was somebody in IT. And somebody who had downloaded an Apache server and was playing with it. And then several years later, the marketing department discovered that the computer people were advertising on the internet, and they had no idea what they were doing. And the marketing people had no idea what the internet was, oh, here, let me let me bring the two together. And then we move forward to analytics, who’s responsible for measuring the success of your website? Well, gee, I don’t know. Let me get back to you about that. Well, I’m writing a book and I want to interview the people who are doing that. And same thing happened with artificial intelligence. And the advances are happening so fast, but I’m constantly learning.

Yudan Lin – Unexpected Data

And so does the definition of a marketer: from doing AB testing to segmentation, it all started with the T shaped professional.

Jim Sterne

The T shape is I know a lot about a lot of subjects and I go really deep in one. Well, I think that it now has to be not one but three things.

Yes, you have to know about business and history and psychology and philosophy and ethics and finance and and and… But you have to know marketing very well, from branding to direct response to what is marketing. And you need to know your industry very well. So, pick, pick a lane, pick an industry and go deep. So I’m going to know marketing, and I’m going to know my industry and then I’m going to get to know the analytics. And that comes in a variety of levels I can be the consumer of the analytics working with the analysts to help be data informed, or I can do some analysis myself or I can get very deep into the algorithms. And that’s just a matter of what is your preference? What excites you? What’s interesting to you? Is it on the marketing side that you really enjoy creating the communication, identifying the message figuring out exactly what’s the right message to put in front of the right person, for your industry? And how do I use analytics to inform that? Or am I really am I going to do a deep dive into the analysis so that I can provide insight to the people doing the creative

Yudan Lin – Unexpected Data

If you want to know even more, the Digital Analytics Association, also led by Jim sterne can support you in getting a better understanding of all these roles. And on top of it, if you are talented expert, you can also grow yourself professionally with certification and share experiences with a cross industry community.

And technology is supporting to fill the potential gap between business, analytics and data science words. But don’t get misled with sales around artificial intelligence ecosystems that can answer all your questions. Jim is telling us the reason behind that with an analogy.

Jim Sterne

if you had never seen a spreadsheet before, and I said here is something called Lotus 123 or Microsoft Excel. And you saw it for the first time. And as a sales representative, I say, it can solve all of your mathematical problems. You’d be very excited And then you discover that you have to enter the formulas yourself, and you have to enter the values yourself. And you have to analyze the results yourself. It’s the tool. It’s not the solution. So do I think that that there is a, an AI system that can do everything for you? No. Are there tools that will allow you to build systems that can accomplish specific tasks? Yes. Are there venture capital backed firms that are creating those tools that you can use out of the box? Yes, but they are very specific. They are very narrowly focused on solving very specific problems. They are not a marketing, infrastructure or ecosystem. We’re a long way away from that.

Who has forced digital transformation in your company more? Was it the CEO, the CFO, or the COVID.

Yudan Lin – Unexpected Data

and I repeat, C O V I D, meaning COVID.

Jim Sterne

And clearly, we are now forced into digital transformation.

Yudan Lin – Unexpected Data

And sometimes to keep consumers, it even pushes companies to be faster in filling the gap between them and the startups. And a good example of it is the financial area where banks turn to acquisitions.

Jim Sterne

If there is somebody out there that has created a system, a user interface that does some amazing things, and they’ve created the back end API’s to make it all work, buy them. They’ve already done it. It’s viable. Bring them in, relabel it. You’re done.

Yudan Lin – Unexpected Data

And in any case, all these organizations are adopting the methodology of customer centricity.

Jim Sterne

It is a methodology that was created in the world of open source. That said, here’s the Unix operating system. And if you have a way, you have some idea for making it better, let’s work as a consortium. This is the the Netscape browser, it is infinite beta. And if you have ideas to help make it better, let us know and we’ll make improvements over and over again. And instead of the good old days where the company would sit in stealth mode in silence and create something fully formed and then release it into the marketplace and say this isn’t it’s perfect. Nobody can afford to do that anymore. And we know that if your smartest people build this amazing system and put it out into the world, there will be problems because your smartest people you have are not the target audience. The consumers are the target audience, and they will tell you what works and what doesn’t work. So let’s get it out into the world as soon as possible to get the feedback loop going. So we can make it more usable and more usable for individuals. And then the consumers who complain the loudest about a feature that’s missing, or a feature that doesn’t work as expected. That’s the feature that gets put into the next release.

My iPhone just updated itself. I hope it’s better now.

Yudan Lin – Unexpected Data

So let’s hope that this release is not only another beta version, or bringing more bugs, which can force US consumers to complain again. From another point of view, and more mine, you can also see it as consumers work done for free. And when the market has an industry pioneer, I think that we must be compensated for feedback that they can find out only by doing market research. And when it comes to new innovation, compensation is still relevant. But the time you enjoy wasting, is not wasted time, as Betrand Russell said.

And can we say that the consumers will benefit from the emerging data productization that is already happening in the business to business area?

Jim Sterne

Data productization. It’s a new area that we haven’t really plumbed the depths of yet, let’s talk about data productization and monetization within the company. One of my favorite examples of this was INTUIT which got inserted itself into the world of small business loans. So, the problem with giving a loan to small business is that it is it’s very difficult to do at scale. Every small business is so different. And the considerations are complex because it is not a large organization that has run the same way for the last 30 years. It’s small, scrappy, they make quick decisions. It’s personality based. It’s really hard to do matching up the banks that are willing to give loans to small business with the small business has not been very equitable and has not been scalable. INTUIT said: “Well, here’s something interesting. We run QuickBooks. So if you as a bank tell us what criteria you need for a small business before they qualify for a loan, we actually know what their books look like. We’re doing their accounting for them. And we can match them up. We have the data.” So that is a company that is performing a service that suddenly realizes that their data has value aside from or in addition to the service they’re providing.

In terms of artificial intelligence, there’s a platform called Shopify. Shopify is for very small e commerce businesses. I sell $100 worth of stuff a day. But Shopify has a million stores, which means they have a lot of data about buyer behavior. My website, oh, maybe I get five people a day show up, but times a million. That’s a lot of data. So they’ve taken that information and created something called KIT. K I T, KIT is a machine learning system. And one of the most brilliant thing about it is the user interface is texting. So I will get a text from Kitt that says, “we’ve noticed, for example, people who come to your website from Facebook ads are looking at your new products, but not looking at your old products. We recommend that you advertise your older products to those people on Facebook. And we suggest that you run a test over the next two weeks with a budget of $25. Yes or No?” That’s the user interface, yes or no. So now a small business person who is just selling a handful of items is using artificial intelligence. So every company that is providing some kind of service to a lot of others, has collected this back end of very valuable data for advertisers, for business partners to help their customers by showing benchmarks or best practices. And that’s that’s all ready to be taken advantage of. So that’s part one.

Do customers own their own data? And how do consumers make money with their own data? And I believe the answer is because of privacy issues and because of trust issues, people are going to want to own their own data, but they have to understand how it can be done. Tim Berners-Lee, who invented the World Wide Web is now working on this project. The platform is called SOLID as an open source project that says, “you own your data and you store your own data in a secure pod.” And instead of going out to all the websites and all the apps on your phone and telling them all of this stuff about you, you store that in your pod. So if you do move to a new apartment, you have a change of address, you update your pod, and then anybody that you’ve given access to, they don’t have to notice it. They just reach in and grab it whenever they need to. So Amazon would not store your postal address, it would say, Do you want this shipped to your home? And you’ve given Amazon access to your pod? And it says, oh, there’s the home address. You say, No, no, send it to the business address. Oh, okay. There’s the business address, doesn’t even store it. Just it comes and gets it from you. So I have my own data. I store my own data, I update my own data, and I give access to my doctors, to all of my medical information, and I give access to my accountant to access to all my financial information but not the other way around. So I am complete control. Now, if I have all that data about me, and I put an AI agent on top of it, that agent works on my behalf instead of an Amazon Echo or some other smart speaker making decisions for me. This is a system that is benefiting me making decisions for me.

The outcome of that is that I get a message that says, “Jim, there is a 90% chance in the next 30 days that your dishwasher will fail. I’ve been monitoring the Internet of Things and listening to the motor and checking online to see what the maintenance routine is. And the choices to have a maintenance worker come in and it’ll cost you about $300 and it will take about two hours, and it will be a good fix for another year. Or you can spend $1,000 and buy a new dishwasher, and it will be good for five years. I recommend that you buy a new dishwasher. Would you like to Yes or no?” Yes. “I’ve gone out and I found a dozen dishwashers that will fit in your kitchen. Six of them will fit your style of your kitchen. And three of them will fit your budget. And I’ve negotiated with those companies and they’re they’re both equally high rated. As far as you know, Consumer Reports and their longevity. These two can come on the day you’re going to be home anyway, so that they can do the installation. But the only difference is this one. The service organization is 10 miles from your house and this one in the service organization is 100 miles from your house. So I recommend this local one. Would you like this one installed?” Yes, no. It’s my agent working for me negotiating for me. This is a ways away, and the open source underlying framework is being discussed and created. Today.

Yudan Lin – Unexpected Data

It seems that even if the brands will not have my data, the pod will then have everything on me. So consideration about cybersecurity and potentially legal ownership of the pod will need to be discussed and regulated. And in this vision, questions still remain: what change will be needed for GDPR to be sufficient? Will it be easy for all of us to have access and have control over our own pod? What will then become of traditional or simple digital marketing?

Jim Sterne

Oh, I need some new triple A batteries. And in fact, I need them tomorrow. So expedite shipping, please. Well, if I’m asking my Amazon Echo, I will get Amazon branded batteries. If I asked my Google device, the bat, and I don’t mention what brand I want, I’m going to get whatever brand cut a deal with Google. And that’s going to have made the decision for me. So as a marketer, I have to spend a lot more effort and money on branding. So that when I go to the Google device, I say I want Duracell batteries. And that’s what I get. The agent that I talked about, said, You know, I found three dishwashers. Which one would you like? If they’re all the same, and they’re all the same price and you can choose whichever. Oh, well, I’m going to pick the one that the brand that I recognize. Perhaps I have instructed my agent to show advertising for people who are willing to pay me to see it. For things that I know I’m going to want to buy or that it knows I’m going to want to buy, my agent becomes the interpreter of my intent. And does a broadcast to say, Hey, who’s selling dishwashers? Jim is going to need one next month. I’m accepting proposals.

There’s business opportunities all over the data world here. But general branding a billboard in the street and ad in the newspaper and ad on television, these will never go away, because I want my brand to be top of mind. I just bought two weeks ago, my brand new monitor because my old one just quit. It just died. So I went to the store. And I saw several monitors all the same size, all the same specs. But then the decision was what brand. Am I willing to pay a little bit more for a brand that I recognize? Yeah, I was because it’s trustworthy. Its psychology

Yudan Lin – Unexpected Data

And Jim reminds us that mastering all these aspects of marketing and excellence, come with time and dedication.

Jim Sterne

Again, I think about when I started marketing it was direct mail and advertising in magazines and making phone calls and television and radio and then it got very complicated so not only do you need to know marketing you need to know computing and you need to know the internet. Oh, and now you need to know analytics. Oh, and now you need to know machine learning and oh, now you have to be an expert in social media and wait. I have spent 40 years learning these things. I can’t imagine what it’s like for somebody just starting out, it’s just overwhelming. You can’t know all of it. So pick a specialty. Go deep. Learn a specific area really, really well and become an expert in that, blog about it and have a podcast about it and participate in the industry about that thing. Because nobody can be master of all. But you can be master of something very specific. If you narrow your focus and go deep for that topic, you will be the go to person.

Yudan Lin – Unexpected Data

And even the best one of us are always learning and putting themselves into question to be even more creative and innovative.

Jim Sterne

What can I bring to the table, a virtual offering that will be a value to people. So “Necessity is the mother of invention” and this is a very creative time for everything that I know about the internet and about marketing. How do I apply that to producing a virtual event? I am not currently writing a book, I’m pleased to say. There are enough balls in the air right now the next book will have to wait until there’s breathing room.

Yudan Lin – Unexpected Data

I would like to thank Jim sterne for his time and his passion for artificial intelligence. Thanks, Jim also for sharing reverse his insight and advices. And if you would like to listen to more, find us on your favorite podcast platform. Help us to grow this show, by writing us a review on what you like and what we can change. If you have a story that you would like to share, reach out to us at Hello@UnexpectedData.com we will read you and we will answer you. Stay curious and challenge your environment. Talk to you soon.