Artificial intelligence (AI) is currently redefining work processes and business decisions in almost every industry, but perhaps none more so than marketing. This is no surprise given the data-driven nature of modern marketing, but the ways in which AI is applied are continuing to evolve and increase the efficacy of advertising in ways that are astounding. Understanding its potential to enhance nearly every aspect of the marketing process is the first step in learning how to effectively leverage this tool for your organization.
Uses and Benefits of AI in Marketing
Marketing automation. Buying and selling advertisements is a process that is becoming more and more automated. AI technologies can use algorithms to analyze consumer behavior, identify those that may have a high conversion rate, and use this data to buy their ad inventory in order to target specific demographic groups. AI can process this data in real time and optimize marketing purchases in order to get the most effective placements at the best cost.
Advertising performance. AI can also be used to increase the efficacy of advertising through different channels. Dell uses AI to identify what language is most effective in their email advertising copy and optimize it in a way that leads to greater sales. Based upon their previous interactions with the customer, these technologies can also segment customer groups and provide customized content across other platforms such as text message and in-app notifications, leading to more effective results.
Chatbots. When discussing chatbots, people tend to think of the more recognizable virtual assistants, such as Siri and Alexa, but there are many other examples of companies that have incorporated chatbots in ways that have been highly effective. They can help customers complete relatively complex functions much more easily and they are highly effective in converting leads. Bots provide a scalable tool that also allows for one-on-one interaction with potential buyers. Since people are much more likely to interact via messaging than to call a company, they offer a way for customer to easily get answers to questions and provide the information customers need in order to make a purchasing decision.
Content personalization. Content personalization is one of the most effective ways to create advertising content. AI is able to determine the best channel, time, and message to deliver to market segments in order to reach them in the most effective way. More than 86% of mobile markets report that they have higher customer engagement and retention, better insights, and increased revenue when they personalize an experience.ii
Lead generation. In addition to personalizing content, AI can work through the massive amounts of data necessary to refine your ideal customers and even rank how warm a potential lead may be.iii A study by Harvard Business Review found that companies using AI can increase their leads by more than 50%, while also reducing call time by 60-70% and costs by 40-60%.iv Results like this indicate how powerful AI can be as a sales tool.
Market forecasting. Forecasting changing consumer expectations and market demand can be a particularly tricky process, although AI applications are now making this easier than ever. By using software that analyzes price points and market changes, you can more accurately deliver the product needed at the right quantity, allowing for more efficient production. Japanese company Rakuten is gaining recognition for its ability to use AI in order to forecast sales and product performance with an astounding accuracy.v
Enhancing search capabilities. Using AI and machine learning technology, sites can improve their search capacity and allow customers to find their information much more easily. Search engines are also enhancing their capabilities by refining auto-correction suggestions and providing more accurate results based on limited data if the user doesn't know the name of the product, site, or service that they are searching for.
Incorporation with virtual assistants. Above and beyond the basic search approaches, companies are employing chatbots and even AI-based virtual assistants to help customers find what they are seeking. Amazon's Alexa is arguably the most famous AI product in existence currently and it works by predicting products based on demand and previous searches. Alexa has proven to be remarkably effective; in combination with the recommendation feature on their site, Amazon can attribute over one-third of their sales to these technologies.vi
Dynamic pricing. Pricing has long been a strategy for effective marketing and has always relied on past trends. However, with AI's ability to process massive amounts of data, dynamic pricing can be more effective and accurate than ever before. AI can analyze how frequently something is searched for and how many people are considering a purchase, then compare it with consumer preferences (such as when sales are high) in order to deliver the best price to meet their optimal target profit. We see this most visibly with ride-sharing platforms such as Uber and Lyft. Users are able to frequently see the cost of a ride change frequently based on factors such as demand, availability, time of day and weather.vii
Developing new insights. The ability of AI to process massive amounts of data regarding virtually all business functions can assist with identifying new insights into your advertising performance and marketing strategy—perhaps even ones that you have not considered. With the ability of AI to take over many time-consuming and repetitive tasks, modern marketers have more time to devote to analyzing this data and developing creative new approaches to their strategy. These examples demonstrate how powerful AI can be as a marketing tool, but the reality is that we may not fully comprehend how much of an impact it can have on marketing functions. This is because the technology is still rapidly evolving. But regardless of what the future may hold for AI in marketing, there is no denying that it is worth the investment today!