Inductive marketing: The marketing of a future that starts today

For those in a hurry: In this article, we present a development in marketing that relies on testing the entire possibility space of a brand in thousands of marketing hypotheses. As a result, we no longer develop campaigns by forecasting, but empirically.

In the past until modern times, all marketing and advertising knew only one birth channel: Deduction. With the advent of new digital production and creation processes and artificial intelligence, this is now changing fundamentally.

Bevor wir jetzt alle loslegen, bevor wir also gleich zu Schlüssen springen – noch schlimmer – gleich mit den Maßnahmen beginnen, bevor wir all das tun, sollten wir doch wohl besser zunächst einen Blick auf die Faktenlage werfen, nicht wahr? Natürlich sollten wir das. Was denn sonst? Was wir brauchen ist eine Tabelle mit den Zahlen, mehrere Studien, wir sollten eine Umfrage starten und gern noch eine Fokusgruppe befragen. Denn wir müssen ergründen, wo das Problem liegt, und was unsere Zielgruppe gern hätte, um dieser Schieflage zu begegnen. Das mit der Zielgruppe ist uns aber zu vage, deshalb entwickeln wir gleich Personae. Woher kommen die? Wir entwickeln sie folgerichtig aus der Problemlage heraus.

We identify the main candidate of a campaign like Sherlock

In all these steps, we act as intelligently as Sherlock Holmes would have liked. No, let’s be honest, we would not earn more than a mild smile from him for our efforts. After all, we would be using his favorite method – no matter how bumbling we are: Deduction. We would carefully spread out the data and facts, explore connections, observe patterns, overlook the most important things (warns Sherlock!) and draw our conclusions from all this.

If you want to be taken seriously in any industry, that’s how you work. It’s no different in the communications industry. After all, creative work in particular must be based on a rock-solid foundation. Because otherwise no one is willing to pay for it. Everything needs a proper reason, otherwise it’s worth nothing. A creative solution has to be so imaginative that no customer can come up with it on his own, and at the same time so logical that it can be sold well internally.

With a very high probability the marketing idea is wrong

And yet, often something goes wrong. Not everything has become city talk as promised. Many things simply flop. “Even today, 80 % of all newly launched products fail, even though intensive market research was carried out before their introduction. Every year, 20,000 articles have to be taken off the market again after a short time. A sum of ten billion euros is wasted every year as a result, according to the Gesellschaft für Konsumforschung (GfK). Research is carried out, tests are carried out – and in the end, the forecasts are simply wrong.” (Quoted from: Scheier, Held: “How Advertising Works. Insights from Neuromarketing”; Haufe Lexware, 2nd edition, 2012. ISBN 978-3-448-07251-8.) How can this be? Where has all that lovely money gone? Every step, every resulting measure was derived quite logically.

Every creative knows: There is no one right consequential solution. Within an agency alone, several of them emerge. Some fit the problem better, some less. Sometimes none of them fits at all. In turn, different agencies come up with different solution ideas. Which of these theses will work best?

In the end, first the agency, then the customer decides based on gut feeling. He then prefers the idea that he can best postrationalize. But the proof of the deduced marketing thesis, that is done “out there in the wilderness”. Only when a campaign, a new product, a new service reaches the people, only then does the moment of truth strike for a thesis derived from data and facts.

This is the fate of a marketing idea derived by deduction.

What if one could now reverse the direction? Better still, if one could combine both ways – deduction and induction?

Induction: The exploration of all possibilities 

What if we now suddenly activated dozens, if not hundreds or thousands of ideas? They would be limited only by a brand’s canon of values. But unlike before, we would never again “put everything on red.” We would occupy the entire playing field of the brand. Is that even possible?

This type of marketing is only possible with digital analysis and production methods. And again, only with the help of artificial intelligence. And it is revolutionizing marketing.This type of marketing is only possible with digital analysis and production methods. And again, only with the help of artificial intelligence. And it is revolutionizing marketing.

Induction and design thinking

For the first time, we would actually apply the methods of design thinking to campaign development. That is, we would no longer unleash the one big idea on humanity, but instead observe attentively (i.e., in an automated way) what actually occupies people’s minds and adapt our advertising and communication ideas precisely to it. This, too, can only be achieved with automation. Some successful companies are already doing this today.

  • Car manufacturers offer thousands of digital configurations of their models before they have even been built – possibly at special leasing conditions. Online, these models are tested. In the end, only what customers want is built.
  • Music streaming services offer their subscribers a new selection of suitable music every week that the individual listener might like. The services deduce this selection based on favored titles from the past. However, the new tracks do not necessarily result from previous knowledge – the experiment is inductive.
  • The situation is similar with movie and series streaming. Netflix and co. have such a large sample size that there is something for many individual target groups. With more and more in-house productions, they inductively explore recipes for success for all possible target groups.
  • “The masses do it” also applies to providers like Amazon. Based on past purchasing decisions, it can present us with recommendations again and again until a suggestion finally catches on. This, too, only leads to success inductively. After all, deductive recommendations for a washing machine that we have just bought are not known to work.

So whether these strategies are used consciously or unconsciously by companies, we suspect that scaling marketing strategies are of a very different kind than the previous ones. And they are inductive.

Empirical validation of marketing theses

What is also new is that inductive processes are no longer exclusively available to large providers. They can also be used with the same effectiveness for medium-sized companies or SMEs. This is because they bridge the gap to already proven formats such as content marketing and even build on them.

Inductive marketing, AI and the large number factor

The competitive advantage is that inductive marketing works primarily by scaling. In fact, it is the only method capable of scaling at a reasonable cost of resources. The competitive advantage lies in the fact that inductive marketing works primarily by scaling. According to our test runs, this proves to be true not only in theory but also in practice.

Inductive marketing is a method that has only been made possible by digital infrastructures. “Trying out” the largest possible number of marketing propositions or spins cannot be done by hand. The number of all potentially effective permutations alone, while influencing audience effectiveness, cannot possibly be determined with paid human thinking power.

Inductive marketing goes hand in hand with content marketing

In a synthesis of deductive and inductive methods, countless marketing spins can be tested against the competition and in relation to the company’s own brand values. In parallel, suitable digital brand worlds are generated for each individual spin and underpinned with content. This is not for the faint of heart – and therefore not for human creatives either.

With inductive marketing we leave the world of human deductively thought creation. We are leaving it behind because it often enough failed to reach people and left many other ideas unused. We are leaving it because it is time for design thinking in marketing and time to let the audience decide what they really care about.

Oh, and inductive marketing is the only marketing method that can finally scale.

Over the past year, we have built a digital infrastructure based on this theory that meets all the requirements presented here.

Wir freuen uns, diese Lösung endlich als Produkt für alle Werbetreibenden verfügbar zu machen.

And we look forward to talking with you!

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