Phrasee Is The AI Marketing Startup That’s Changing The Way Top Brands Talk To Their Customers

Getting your customer’s attention is one thing, but how can you optimise your marketing to turn it into action? Phrasee CEO and co-founder Parry Malm tells RSNG the answer is AI...

RSNG What does Phrasee do?
PARRY MALM, CEO
‘Phrasee is an AI that writes more effective marketing copy than humans can themselves. ‘What we have done is built proprietary in-house natural language generation technology, which can write at scale human-sounding language that’s compliant to a brand’s tone of voice.’

‘It generates subject lines, Facebook ads and push notifications, and then the user takes those into third party platforms like Mail Chimp and tests them out. The results are then fed back into our end-to-end de-burring model, which trains itself using this self-learning neural network.’

RSNG How does the technology work?
PM
‘Our deep learning engine finds intricate linguistic patterns which are invisible to the naked eye, to say what makes your audience tick, and what’s more likely to have a good response next time. So it continuously and progressively optimises based on your audience, and the end result is that people get better results from their campaigns.’

‘Dominos Pizza has noticed a 57% increase in click-through rate from their marketing campaigns and we did a video with Gumtree that had an uplift of 35% sometimes peaking at 50%.’

‘Humans can’t say which subject line is going to work because they apply biases’

RSNG Why can’t humans do the same thing?
PM
‘When we first started Phrasee we thought that we would be able to get this defined marketing rule set that people should follow and have this one version of the truth about what makes some copy good, some copy bad but we found that the answer is actually a lot more complex.’

‘You don’t have individual words which are good or bad, you don’t have sentiments or emotions which are individually good or bad. What you actually have are have thousands of interdependent factors, which all affect each other. We look at thousands of features and to actually map this out you’d need a thousand dimensional plane beyond ways in which the human brain or the physical world can actually operate.’

RSNG Have you got an example of this in action?
PM
‘I was at a conference and we showed a room full of 200 digital marketers ten subject lines that Dominos had sent out, and asked them in a live survey to guess which one was going to win a split test. It was pretty much even and each one got between 5-15% of the vote; there was no consensus. Humans, at scale, can’t say which one is going to work because they apply their own biases.’

‘We ran those same lines through our deep learning model and it predicted exactly which one was going to finish first, second, third, fourth and all the way down. It’s one of these tasks which humans think they should be good at because language is such an innately human thing, but language involves so much bias that actually when a machine is trained appropriately like ours it can do much better than humans.’

RSNG Why are humans, as a group, unable to make these accurate predictions?
PM
‘Phrasee combats human bias. There are people who have long conversations on subject lines and everyone thinks that they are an expert on them, and they all apply their own bias to it so you end up with a ‘Frankenline’, which is just one big blah. Phrasee takes away that bias and based on data looks at thousands of linguistic features, too much for a human brain to consider – we can then work out what language works and what doesn’t.’

RSNG What about brand personality and tone of voice?
PM
‘Brand tone of voice is important. If we wanted to give brands the highest one-off impact possible we would use the line: “Free Beer” maybe with a beer emoji next to it and every beer drinker in the world would open it because who doesn’t want free beer? But if you’re actually selling socks then it’s going to turn people off.’

‘Most people think that a subject line should be short – the data doesn’t back that up’

RSNG Are there any lessons you’ve seen from the data that you can apply generally?
PM
‘Most people think that a subject line should be short. It’s this widely believed notion that it needs to be short but the data does not back that up. We have found at scale across tens of thousands of subject lines that there is no correlation between subject line length and performance. It doesn’t make sense to the human brain but the numbers do not lie.’

RSNG Are there other areas where marketers are, perhaps, kidding themselves?
PM
‘People think you have sentiment within language that evokes certain emotional responses, so a lot of people say we should always use a level of curiosity, or we should always be very direct in what we say, or we should always be friendly. But take curiosity: you can have language that is very curious that performs well, or performs badly. You can have stuff that is very non-curious and direct performing well and badly too.’

‘What humans do is they try to compartmentalise these various factors, and create this zero-sum rule set where it needs to be curious or non-curious because we can explain it. The real reason is much more subtle, much more complex and much more difficult to explain – but it works.’

‘We made it a company mantra to uncover hidden Einsteins’

RSNG You’re operating in a new area so how did you build your teams?
PM
‘Hiring talent for an AI company can be quite challenging. You think you need 100 data scientists and 100 devs but they are very scarce, expensive resources. So we made it a company mantra to uncover hidden Einsteins, people who have the ability to do awesome stuff in a slightly different way. We have a team of linguists who operate and create algorithms for our natural language generation technology. These are all folk who have graduated from the top unis with top degrees in linguistics but there previously were not that many job opportunities for them.’

‘We have created an entirely new job category by finding these bright, ambitious people whose skill set is directly transferable to us. What you need to do is define what your problem is, and then find the appropriate people to help you solve that problem.’

RSNG As a startup in a new market, does having competitors become a problem?
PM
‘I’m personally a big fan of having competition because it shows it’s a viable market and it means that us and the great firms that are in the marketplace with us don’t have to justify existence in the budget, it’s about picking the right vendor for you. It actually helps commercial scaling much more if you are not two miles in front of the parade, you want to be in the parade.’

RSNG What about the data crunch caused by upcoming GDPR legislation?
PM
‘We built Phrasee knowing that this data crunch was coming so Phrasee is trained upon anonymised data, we never touch any personal information about individual people. And humans are just so unpredictable individually – there is a huge false positive race where what you think works one day doesn’t work a different day. Trying to use language as a predictive factor is not the right model here, but audiences en-masse respond in similar ways at scale.’

RSNG Do you think that concerns about personal data will see a trend away from the current emphasis on personalised marketing?
PM
‘I’ve been up and down the dot com boom and the big data boom and I think the core thing about marketing is that the purpose of marketing is to sell products and brands to people, and that hasn’t changed in over 3,000 years.’

‘As we get more and more technology and information points on people, marketers want to use it because it's there but just because it’s there doesn’t mean we have to use it. I think that there is going to be a trend back to getting your basics right, and one of the basics is ensuring that you have the best possible copy in your marketing campaign. Online, language is your main attribute.’

RSNG Was it difficult to get your first customers?
PM
‘Because it’s such a new concept just getting our first customers was really, really difficult. We did dozens of demos and everybody would say, ‘yes, love it’, and then the contracts wouldn’t get signed and it was really frustrating. So we had to hunker down and just persevere and keep at it and eventually they started coming through – we learned a bit more about how the sales process worked and now customers come to us.’

RSNG What’s the best bit of business advice you’ve ever had?
PM
‘My Dad, a small businessman himself used to always say: “No matter what people say, if you believe in something then just go and do it. My Mum was the president of the teachers union and her advice was: “Parry, never take shit from anybody!”’

WHAT NEXT? Want to apply AI to your own work? Watch Philipp Gerbert’s TED Talk on the basics of AI for business…

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