AT&T CMO on spokeswoman Lily’s future, working with Ben Stiller and balancing performance and branding

AT&T Chief Marketing and Growth Officer Kellyn Smith Kenny is the rare CMO who was once a software developer. Yet the tech-savvy, number-crunching marketer shows a deep appreciation for funny creative—she let Ben Stiller go off script for a recent ad—and long-term brand building, which can be harder to quantify than short-term performance marketing. In an interview conducted at Cannes Lions, Kenny discussed how AT&T is building guardrails around intellectual property as it embraces artificial intelligence and getting more sophisticated in how it measures success. She also talks about why humor will continue to have a role in AT&T’s creative and why a brand heavily associated with spokeswoman Lily in recent years is looking to broaden the mix. This interview has been lightly edited for clarity. Ad Age Leading Women Luncheon Join us Aug. 7 in New York as we recognize this year’s honorees Buy your ticket today I haven’t seen Lily in an AT&T ad for a while. Is she on hiatus? One of the things that’s so compelling about the Lily character is that you get instant recognition that it’s AT&T. So we’re starting to play with other devices to see if we can get that same recognition, to see how far we can stretch AT&T. We’ve really been disciplined in seeing how far we can push ourselves and not just fall back on Milana [Vayntrub, the actress who plays Lily]. I saw the recent Ben Stiller ad. How did that work? That spot scored off the charts. People love it. He brought so much of that. Obviously we had a script, but so much of it was him improvising. That started with an idea of doing a whole series in the lead up to the Masters. And the director said, “I have an idea. I’ve worked really closely with Ben on a number of projects. Would you be interested in casting Ben Stiller?” Of course I’d be interested. He came aboard because we gave the director greater freedom to workshop and stuff. I love stories like that when you bring the creators together with the brands and unlock something so much more magical. There’s been some talk about how we’ve lost humor in advertising, and it’s not such a good thing, because humor actually builds brand affinity. Is that your experience? A couple of us were just talking earlier today with Andrew Robertson [CEO of AT&T agency BBDO]. He did a whole talk on the Cannes main stage last year about how we’ve kind of lost humor and how humor endears brands to our customers. We’ve really tried to take that feedback to heart. We know that witty humor works really well for our brand. We’re a brand that's trying to demonstrate real expertise, but experts can still have fun. What’s interesting about the Ben Stiller spot is everyone loves watching it. I’ve literally had people say, “I rewound the commercial to rewatch it because he’s so funny.” And then people realize AT&T was the first provider to enable satellite calls. You get the one-two punch. People are building affinity for your brand and you’re able to land a product message. You were a software developer before you were a marketer. That’s a pretty nice skillset to bring into marketing today. Do you think more marketers would be served by having that background? One of the things that’s so important about marketing today is being able to measure things and also able to talk to experts all throughout the company. One of the things when I talk with our CTO or talk with someone from engineering, they know that I can actually empathize with their role. Marketers today, you have to build the brands, and ensure you’re performing. Being able to have that mathematical knowledge to understand and ask deep questions about the econometric models or thinking about how the web experience or network experience is going to impact performance really matters to us. It helps me ask questions that provoke our teams to think differently about the work, so they don’t just accept the first answer. One of the things that I learned in developing software is you don’t just launch something and leave it. That’s when the work the hard work begins if you're a software developer. How do you take it from a one to a two? A lot of it can be the tweaking you do on the back end, which is driven by analytics and insight. Has AT&T drawn up a roadmap for how it will use AI? We were one of the pioneering companies with Google. The first area we tapped into was the customer call center. We’ve been able to shed a tremendous number of calls. And when we looked at the satisfaction of customers who didn’t have one-on-one interactions with an agent, we were able to compare satisfaction, and, miraculously, there was no decrease of satisfaction. Now, the more complicated things still do require human agents. Humans are still better at cross-sell than machines. Then we started using generative AI to inform our tower builds and optimization for fine-tuning the 5G network, understanding where based on weather patterns we might anticipate what there could be outages or interruptions to service. We’re using generative AI to inform when we’re doing fiber installations. In terms of the customer and marketing side, we have a to-do list of things we want to pilot. We’re being very careful not to overdo it and take our precious IP and put it out into the public domain. One of the things that the team is doing now is the monthly newsletter to customers. The vast majority of it is leveraging generative AI to actually produce and optimize the content. We’re getting better open rates. We want to do more on creative as well. We’re just scratching the surface. AI marketing blog How brands are using ChatGPT, DALL-E 2 and other tools Read more here You mentioned protecting AT&T’s IP. How are you doing this? You probably saw that story recently where some Samsung developers put code into a large language model, but then it was accessible to the public. Every single person within AT&T was able to leverage that. We are super protective. Our technology teams are preventing people from navigating to the external-facing large language models to make sure our data is not out there. Your own employees, who are in search of doing the right thing, can be unintentionally exposing some of your IP. We’re very careful with third-party vendors where we have very strict confidentiality and privacy rules. We’re very careful about uploading our information, even if they actually have the controls in place, so that if we severed the relationship, they wouldn’t be able to use that information to maybe inform a large language model that may become part of a solution or software license that may get sold to one of our competitors. We’re putting our vendors through a very thorough vetting process to make sure we’re keeping that IP secret. [Also read: Top 5 AI advancements of 2024 so far] Likewise, are you trying to make sure in RFPs that AI providers have proper permissions for any IP they use? That's a big part of RFPs. On the creative side, there are some asset-generation businesses that will fully indemnify, like Adobe, to make sure there’s no copyright violation. But there are other companies that can’t make the same promises. You absolutely need indemnity if you're going to provide our creative solutions. The other thing that’s interesting the information about our brand, our tone of voice, our fonts, and our colors, we do have protections in place. When you see that same photo and image all across the same industry, you don’t want that. We’re trying to fine-tune the instruments around our colors are our other creative manifestations, and then protect that. It sounds like you’re pretty deep in the weeds on measurement compared to a lot of CMOs. Where do you see the biggest challenges? I still think there’s a massive opportunity in going from what you call a media mix model to a true marketing mix model to understand the world. We’re on that journey, where you can take into account all of the exogenous factors that are happening, not just in media but outside. What’s happening in adjacent industries? What happens to the cell phone category? We have a lot of internal partners who want instant gratification. And if you if you’re reactionary to the market and you’re really seeking instant gratification, you’re going to make decisions that aren’t in the best interest of the company in order to plow everything into lower funnel. You end up taking money away from a portfolio activity around brand building that might not have delivered in that quarter, but it would have been more efficient over time horizons such as five, six or nine months. As marketers, our job is to maximize multiyear returns. Does that make you more willing to invest in higher-quality creative and maybe more brand-building relative to performance marketing? One hundred percent. Historically, as we looked at our brand, we were performing pretty flat, and we had some competitors who had started picking up. So somebody came to me and said, based on results from prior years, here’s how we should split [spending]. But based on what media? You can’t say that this channel is going to perform in this way when we never had the content that was appropriate to match the channel. We would actually have no way of knowing how television and social perform, because I never put brand-building content [in social]. We never fed the model the right content. Some of it requires a leap of faith. Some of it you can actually test in smaller markets to get that quick pop. We do a little bit of both. The good news is that there are plenty of companies out there that have seen the light on brand (building) long ago. We’re currently running a brand vs. performance test at AT&T. We’re being very intentional about selecting the period of time we need to be testing, because there are certain quarters when people are buying their loved ones a cell phone. It’s a very popular gift. There may be people who aren’t shopping in that quarter, but your favorability goes up with them a little bit, or the percentage of consideration goes up. And that all matters. When they’re actually looking and buying, that’s when the performance media works. Media measurement blog Tracking TV, social and digital updates Click here

AT&T CMO on spokeswoman Lily’s future, working with Ben Stiller and balancing performance and branding

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