New technology is making the life of digital marketers much more manageable in 2020. One such innovation is artificial intelligence (AI), which is providing teams with valuable insight that can improve digital marketing strategies.
With the ability to collect, analyze, apply, and learn from data, AI transforms the traditional marketing approach. However, many marketers still do not quite understand the benefits of AI over typical “non-intelligent” digital software. Investing in new technologies can be intimidating, especially where words like ‘machine learning’ and ‘algorithm’ are thrown into the mix.
In this post, we will look at what AI means today and some of the ways that it can accelerate and improve digital marketing strategies.
What is AI?
AI refers to machines that are capable of mimicking the cognitive functions of a human mind, including learning and problem-solving. In time, computers may even learn to complete tasks better than a human can.
Thanks to books and movies, society has formed something of a fantasy world about AI being a world ruled by robots, flying cars, and hoverboards. We could get to that point in the future, but today, we are in a state of Artificial Narrow Intelligence (ANI). An application that operates with ANI can perform a single task, like checking the weather, analyzing content, or predicting a movie you might like.
Any machine intelligence that we see today works with ANI. Amazon Alexa responds to an instruction that a human provides, Google searches for what humans tell it to, and Netflix knows the movies we like. Although you may consider these to be powerful, they are known as narrow applications whereby they make decisions from a rule base. Alexa is not conscious, and does not understand the context of things we say, but can find an appropriate response by analyzing the commands.
These ANI functions are what digital marketers use to enhance their strategies.
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AI and digital marketing
The brain behind AI applications is data, and the digital marketing world is full of data. Machine learning algorithms can gather, process, and analyze millions of data points in real-time, and then make an automatic decision.
AI is all about a data-driven approach to marketing and decision making. It changes the way that brands connect with their target audiences, but also plays a significant role in cutting costs and improving operational efficiencies.
The modern customer expects to have a seamless, personal experience when they choose a brand. 84% of consumers expect a company to understand their needs and expectations, which they can only achieve through AI.
Digital marketing strategies need to embrace AI and data to give customers the experience that they demand. A report from Super Office shows that only 57% of businesses are using data to make decisions, meaning those that do stand to have a significant competitive advantage.
There are several ways in which AI I influencing digital marketing.
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Enhancing the customer experience
Machine learning could enhance the buying experience in several ways. Some algorithms could change what the customer sees in their journey based on the behavior of past customers seen in historical data. This, in theory, is how Netflix or Spotify recommender systems and although not generally considered, are forms of digital marketing in that they promote the right movies, shows, and music to the right people at the right time.
Netflix is customer-obsessed. The company runs over 250 A/B tests per year to see how subscribers will respond and create the perfect way to recommend shows. 80% of what people watch comes from the recommendation algorithms. Viewers will even see different thumbnail images depending on what the machine learning engine believes a person will respond to.
Beyond this, machine learning bots can offer 24-hour customer service during that journey. Customer support agents are only human and take only take one call at a time. AI-powered chatbots are changing the customer service landscape. Complex AI-driven bots can understand what customers are asking and solve problems without the need to speak with a human.
For example, the Adidas Women UK bot enables users to find and register for sessions, ask questions, and receive information. Not only is this an excellent and seamless experience, but it also saves the cost of a human call center operator answering basic queries.
Increased revenue streams
Machine learning has been a significant reason for increased revenue streams at Amazon over the last few years. Around 35% of their revenue is generated from product recommendations provided to customers when they visit Amazon or through push notifications. It is a perfect example of how machine learning through data is driving the digital marketing strategy.
Amazon can almost predict what customers what before they even know that they want it.
Beyond that, Amazon has been able to focus their attention on other areas like Amazon Web Services (AWS), which offers companies’ storage and data processing. AWS has provided a brand-new marketing channel for them on a B2B basis as well as B2C.
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Optimizing Content
Another primary application of machine learning for digital marketing is within content optimization. It is probably considering Marketing 101 to do activities like A/B testing to work out what content works best for you, but now machine learning can do that on a continuous, incrementally automated basis.
For example, let’s say you want to test a Facebook Ad and to do so, have two ads with different content to start working out what works the best. The algorithms can pick up which ads work best, how people behave when seeing them, and make a decision on what should change to achieve an even better engagement rate.
AI can now go as far as creating content without human intervention. Tools like Wordsmith transform data into an insightful narrative through a sophisticated AI platform. Articoolo produces an entire article based on only two to five words of input from the user (it generates 500 words).
Personalization
Digital marketing teams need to be aware of the needs, interests, and preferences of their target audience to be successful. In having an accurate picture of the customers you are working with, businesses and segment and personalize marketing messages and digital content.
A personalized approach can result in a 171% increase in revenue according to research. However, AI can take this to another level. In processing vast amounts of data in real-time, you will have a deep understanding of all the elements of your customer behavior. A human would take months to complete a similar task.
For example, you could combine previous transactions, online activity, demographic information, social media streams, and environmental metrics to make a decision. Customers can be presented with different products depending on the profile that AI generates from their data. Brands can tailor email campaigns to show what the customer wants to see, and sen at the time they are most likely to read it.
Traditionally, personalization would have meant starting an email with someone’s name, perhaps, but now, customers expect you to know their demographics, behaviors, and when they want to buy to tailor the experience completely. Over 50% of customers say they will consider switching brands if the efforts to personalize are not enough. This is one of the core reasons why we see an end to High Street retail, and while experiences are face to face, humans don’t know each other as well as machines do.
Ironically, machines are creating a more human experience than humans.
No more wasted campaigns
Beyond all else, machine learning helps reduce wasted digital marketing efforts. In the past, campaigns offered involved a bit of guesswork and assumptions and could be costly if they didn’t ultimately get the return. Using data teams can target campaigns to the right customers, reducing the cost of advertising and maximize return on investment.
Emails with a personalized subject line are 26% more likely to be opened and deliver a six times higher transaction rate. Once a customer does open the email, AI can customize the content dynamically, to ensure they see information, products, and services that are relevant to them as an individual. For example, Amazon will always send products similar to others that you have shown as interest in on the website.
AI is here to stay
AI will be a critical part of digital marketing doing forwards. Through data, organizations can truly know their customers and deliver unique experiences that the 21st century demands. Being part of the evolution is fundamental for businesses to keep up with the competition else they may go the same way as Blockbuster, Maplin, Toys R Us, and Kodak, all of which failed to join to digital train, and ultimately succumbed to the competition.