If you work in marketing, chances are you’ve heard of Artificial Intelligence. You might still be wondering how it can benefit your marketing strategy, though. So here’s a look at what AI is and how businesses can use it in their marketing campaigns.
What is Artificial Intelligence?
Artificial intelligence (AI) is the simulation of human intelligence by machines that are designed and programmed to think like humans and mimic their actions. It usually focuses on areas such as speech recognition, problem-solving, learning and planning.
AI uses machine programming to carry out a task and achieve a specific goal, and it has become more common as the technology improves.
How is Artificial Intelligence used in marketing?
Recent research shows that 50% of the companies interviewed have adopted AI in at least one business function, particularly service operations, product or service development, and marketing and sales. Everyone is talking about ChatGPT and how easy it is for the public to use, but AI is already built into many marketing practices you may not realise.
Programmatic advertising
Programmatic advertising uses AI to make the digital advertising process more efficient and streamlined for advertisers, publishers and consumers. It lets brands deliver ads personalised to the audience’s needs, interests and situation, and it combines AI with location data to find the most cost-effective reach for your ads.
The benefits include higher conversion, engagement and retention rates.
Offering personalised digital experiences
With AI built into digital shopping experiences, brands can respond in real time to what consumers are searching for and offer personalised recommendations. You can see it at work when you log into Netflix and get a selection of shows and movies picked for you.
Personalisation works. Research from Forbes found that 40% of marketing executives said personalisation had a direct impact on sales, basket size and profits in direct-to-consumer channels such as e-commerce.
Another 37% said product or content recommendations increased sales and customer lifetime value.
Helping consumers find products
Statista reported that the number of digital voice assistants would reach 8.4 billion units by 2024, so voice search is clearly an important part of the digital experience for consumers.
It has also become a real habit, particularly among younger generations. According to Accenture, 38% of Gen Z-ers are willing to try shopping through voice-activated ordering.
Offering 24/7 customer service
Chatbots have become hugely popular because they give customers round-the-clock support with immediate, personalised responses. Complex algorithms can even match a particular tone of voice, which keeps the brand’s reputation consistent.
One of the biggest benefits of chatbots is that they cost far less than a team of employees. They also free up staff to focus on other tasks and improve the customer experience.
The benefits of artificial intelligence in marketing
Reduces error
AI isn’t completely error-free, but it removes many human errors. People make more mistakes when they’re tired, while AI doesn’t have that problem. It can also make better decisions without being swayed by emotions or opinions.
Does what humans can’t
Unlike humans, AI doesn’t need downtime or rest, so it can work 24/7 without losing efficiency or success rate. It’s also well suited to multitasking and can even take on dangerous tasks such as defusing bombs or going to space.
AI handles mundane or repetitive tasks more efficiently than a human can, and it helps brands achieve marketing automation.
Provides a better understanding of the audience
AI helps brands analyse large amounts of data to predict customers’ buying behaviour and decisions. With a more complete understanding of their customers, brands can build a successful digital transformation strategy.
Better measurement of customer engagement
AI lets brands measure customer engagement accurately and see which strategies are working and which aren’t. AI tools can also compare old and new clients and show what each client wants and how to target them.
Overcoming challenges with AI marketing
Lack of data quality
One of the biggest challenges of implementing AI in marketing is poor data quality, because AI algorithms need high-quality data to make accurate predictions and recommendations. Businesses should invest in data management tools and processes to keep their data in good shape.
Potential copyright infringement
Because AI content platforms all draw from the same pool of data, there’s a risk of overlap if businesses copy and paste without reviewing the content themselves. Search engines may also flag AI-produced content as plagiarised from other websites.
Resistance to change
Many employees fear AI will replace their jobs or disrupt their workflows, so it’s understandable that they hesitate to adopt it. To help them feel more comfortable, businesses should explain the benefits and provide training and support.
Lack of skilled professionals
Skilled professionals who can design and implement AI are hard to find. Businesses can address this by offering training and development programs to current employees and hiring people with AI expertise where necessary.
Case studies of successful AI marketing campaigns
Nike’s DIY sneaker system
Nike launched its DIY sneaker system last year, letting customers design their own sneakers in-store. The campaign drove sales and also collected useful information that machine learning algorithms can use to design future products and deliver personalised recommendations and marketing messages.
Amazon’s product recommendations
Amazon uses AI to offer personalised shopping recommendations based on many factors, including previous purchases and search and browsing behaviour. It also uses AI for dynamic pricing, lowering prices to boost sales when needed and raising them during periods of high demand.
Starbucks loyalty card and mobile app
Starbucks uses predictive analytics to process customer data and send personalised messages and offers when customers are near local stores, with the aim of encouraging them to spend more. Customers can also order from their phone by voice command through an AI-powered virtual barista service. Starbucks also uses data from 90 million transactions every week to inform decisions such as where to open new stores and which products to launch.
The future of AI in marketing
Hyper-personalised marketing
AI can analyse large amounts of data such as past purchases, browsing behaviour and demographics, which lets companies target specific audiences and create personalised campaigns.
A data-driven marketing approach can give businesses a clear competitive advantage over those that don’t use AI.
Augmented Reality
Augmented Reality (AR) lets customers see products in their own home before they buy. That personalised experience can boost the chances of making a sale.
AR can also reduce returns and give you a competitive edge, as customers are more likely to engage with a brand that uses it. According to Deloitte, 88% of medium-sized businesses are already using or testing AR for customer use.
Fraud detection
AI can analyse customer data and transaction patterns to detect and prevent fraud in e-commerce transactions, by monitoring for unusual patterns and identifying suspicious IP addresses.
WhatsApp Chatbots
With over 2 billion active users and an average open rate of 98%, WhatsApp is a huge opportunity for brands to connect with customers. WhatsApp chatbots give customers quick, personalised responses to their inquiries and cut customer service costs.
Looking for help on how to navigate the world of digital marketing? Get in touch with our friendly team of specialists to find out how OMDIGI can help.
