Jun 14, 2021
Much like digital technology being here to stay, there is another influence that has come and is transforming businesses around the world. The role of artificial intelligence has impacted organizations looking for cost reductions in operations, client satisfaction and developing new revenue opportunities is some amazing ways. In essence AI draws on data collected at every level of business and helps computer systems and disciplines in a company learn from behaviour and predictive analytics. Basically, AI takes the guess work out of the tough business decisions and creates opportunities never before imagined. It is not only very high tech, but it is super cool!
Let’s look at one area for this episode in particular – AI in marketing. When I was cutting my proverbial teeth in the profession, I couldn’t tell you how many decisions were made by gut instinct, or at least, that was what we called it. We would look at a campaign or a product and make decisions accordingly on where to advertise, when, and what the campaign would ultimately look like. When it was successful, really successful, we would be asked how we did it, but our answers were typically gut instinct. Was it really instinct? No, I don’t think so. You see our decisions were drawn from information that we already knew about our customers. We knew what product sold best, we knew what the customers preferred, heck we even knew at what price they would buy the product. But there was no formalized way of demonstrating the insight so we wrote it off as gut instinct. But when things went bad, there was no room to bask in the instinct and we needed to come up with data or information at least that would support our decisions.
Fast forward twenty years and the world really looks different. Marketers all around the world are now looking at AI to make the decisions for us using automated technology. These decisions are based on massive data warehouses, laser focussed analysis, and other predictive information such as economic trends and our target market to maximize our marketing dollars. The amazing thing about using AI is not only its precision, but how fast it analyzes our customer profiles, understanding the best way to communicate with them, and what to say to evoke the buyer decision without the intervention of any personnel. So now we start to look at AI to augment marketing teams basically using it for tactical tasks that require less human nuance. In fact, this is happening more and more in media buying, decision making, generating specific content, and in creating personalization in real-time.
Other components in AI for the marketing department include using computer algorithms drawing from machine learning and this improves automatically through the experience of the system. Really the system draws heavily on machine learning so that it can analyze anything new in the way of data from historical perspectives so that it can inform decisions based on what did or didn’t work to help determine what will work going forward. This has been boosted by digital media and of course big data which helps us understand how our campaigns or ideas are performing across many different channels. The down side is that with so much information sitting in warehouses, we struggle to determine what is valid or what isn’t worth gathering anymore. It is a really fine line. So rather than lose sight of the bottom line, we look to the AI model to help us manage the huge warehouses and to analyze it into usable information. These systems give use usable intelligence of our target market and let’s us use it to make data-driven decisions. Frameworks like Bayesian Learning and Forgetting can help put together a deeper understanding of how our clients will respond to our marketing efforts.
I know what you are thinking, what the heck is this Bayesian thing you are talking about. Let me quickly explain. This is a statistical model that draws on Bayes theorem of predicting the probable event or to test whether a hypothesis is correct. There are a lot of different industries that draw on this statistical model on a granular level. Basically, it takes the known insights, and any new information to align it. Basically the model helps to determine what will work and what won’t. But it does need a constant influx of data to work, and as it collects information, it draws on what it already knows which will help to reinforce previous insights that are helpful and throwing away what isn’t helpful.
But I am sure that you didn’t think you would be listening to a statistics lecture so I think I will drop it there.
So AI helps us make important decisions, but the challenge is that it takes time to get to where you can rely on it. The other problem with the time needed to get up to speed, is that the data must be awesome or it could threaten the results or destroying the reputation AI. But let’s look at something more ground level shall we? Because the technology is relatively new, there is little in the way of best practices in deployment because getting buy-in immediately is difficult. Sure, we can justify the ROI or its efficiency through results, but what about the less measurable data such as how the customer was treated or the impact of decisions on the brand reputation. This is not so easy.
The real benefits of using AI in Marketing are enjoying an increased campaign return on the investment because of the ability to make informed decision on how to best spend the budget or how to more effective engage the consumer. This means that the level of personal interaction is improved which, of course means your customer experience will naturally improve. Another huge advantage is our ability to more accurately measure the results because of the granular analysis that is now available.
There are so many uses of AI in marketing. In fact, I have seen companies use AI in communication decisions like the tone of the message, the frequency and exactly how a customer interacts with the intended message. Another area that we are seeing more and more is using chatbots to engage consumers in seamless conversation. Unlike the human element, these chatbots are capable of provide the exact information accurately every time, and the nice thing is, they never tire so it doesn’t matter what time of day the consumer reaches out, they will enjoy the same experience. Finally I have also seen companies use AI to help them make programmatic media acquisitions. Relying on the technology means that the marketer can look to AI to bid on advertising drawing from information in the areas of consumer interest, their geography, and even where they are in the buying cycle.
There are so many opportunities we have yet to explore with AI and trust me when I say this, the best is truly yet to come.