AI marketing startup raises almost $15 million

Automat develops marketing ‘chat bot’ for large enterprises such as L’Oréal

Andy Mauro says online marketing doesn’t work.

“Unfortunately, we, over the last 20 years of digital marketing, have come to rely on what I call digital monitoring techniques,” he says. “We follow people around, where they go on the web, we look over their shoulders while they do Google searches.”

While that technology is getting more sophisticated — pulling in more information from more sources, the result is pretty similar: People are shown ads for things they searched for the week before and for products they’ve already bought.

It’s a bad experience for consumers and a waste of money for advertisers, Mauro says.

And he says his company can do better. He’s the founder of Automat, a Montreal-based startup that’s developing what it calls a “conversational marketing platform” — an artificial intelligencedriven marketing tool for large enterprises.

On June 8, the company announced it had raised US$8.3 million ( just over $11 million) in venture capital.

Automat’s platform is a type of “chat bot.”

It uses artificial intelligence to have conversations with real people through online messaging platforms, like Facebook Messenger.

Mauro, sees the term “chat bot” as being like “app” or “website,” words that describe a wide variety of digital products.

“The word ‘bot’ is a useful shorthand, but it really just broadly describes an area of technology,” he says. By focusing on a narrow subset of that area, which he calls conversational marketing, he says he thinks his company will be able to stand out from its competitors.

“We go in and we ask a couple simple questions: Who am I talking to in this experience and why do I want to talk to them?” he says.

“We tend to look for a specific consumer problem and a specific business problem.”

People don’t want to talk to a brand, he says, they want to have a conversation that seems real and that helps them do something.

“It’s not ‘I’m going to go talk to L’Oréal,’” he says. “It’s ‘I need to buy a Mother’s Day present.’” It appears to be working. In addition to L’Oréal, Automat, which has been in business for 18 months, counts National Bank and Cover Girl among its customers.

For L’Oréal, Automat made a gift recommendation tool — People who were buying cosmetics as a gift could chat with a bot, answering questions about their budget and who they were buying for.

The gift recipient would then be notified and asked about the beauty and skin care products they like.

“Ultimately, we’d come back with a very personalized set of gift recommendations for the gift giver, who would have a ton of confidence in what they were buying,” Mauro says.

With the new funding, Automat has raised almost $15 million in VC.

The money will allow the company to accelerate development on its product as well as expand its sales and marketing team.

“We’re really aiming to be a global company,” Mauro says.

We go in and we ask a couple simple questions: Who am I talking to in this experience and why do I want to talk to them?