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Artificial Intelligence is poised to become the next major disruptor in marketing. What does that mean for today’s marketers?

Remember when Big Data burst on the business scene? It was a disruptor in every sense of the word. “What is Big Data?” “What can it do for us?” “How much will it change things?” “What will it do to our jobs, to how we work?”

Or, really, “What’s the big deal?”

We know just how big a deal Big Data turned out to be and how much data analytics changed the marketing world. Big Data has become standard operating procedure for many marketers, and it paved the way for another big disruptor: Artificial Intelligence, or AI.

AI has been touted as the Great Time-Saver of the 21st Century and the Future Thief of All Our Jobs. Which is it? And what does AI really do?

How Artificial Intelligence Works

AI is the branch of computer science that uses computers to do human-like things. In essence, computers are programmed to “think” like a human brain. This relies on three elements:

  1. Sensing (Audio Processing and Computer Vision)
  2. Comprehending (Natural Language Processing and Knowledge Representation)
  3. Acting (Machine Learning and Expert Recommendation Systems)

If we focus on the machine learning aspect of AI, we note another important fact: AI is self-learning. It can improve its own performance by observing the results of its actions or recommendations. Also, when new data is fed into an AI program, the system can analyze it to find trends, predict events and perform other human-like feats of intelligence.

Why do humans — specifically, businesspeople — need a computer system that’s programmed to be human-like? AI can transform vast amounts of complex and ambiguous information into useful and relevant insights. Thanks to its self-learning capabilities, its effectiveness improves over time; the system becomes more efficient, faster and more accurate.

Deploying AI within Marketing

Big Data, improvements in computer software and hardware, and cloud computing have all combined to ready the world for the increased usage of AI. AI shouldn’t disrupt current technology; it should sit on top of it and enhance it. To successfully use AI, organizations must:

  • Combine data from multiple sources, and build a customer DNA with acquired and predicted information
  • Integrate the AI system into the decision-making workflow
  • Make sure the AI system has access to historical data (to build a basis for current decisions) and new data (so its self-learning capabilities can work to improve future performance)

Some businesses are doing this already. What are their experiences with AI?

How Marketing Is Currently Using Artificial Intelligence

Many organizations are already feeling the need to tighten up their marketing processes. To this end, they are starting to adopt AI to automate routine tasks and execute actions. But are they doing enough?

Not really. AI gives the most benefit when it is used to power decisions, not just implement them. Look for AI to improve the quality, speed and accuracy of decisions while still managing the end-to-end activities. Plus – unlike traditional analytics – AI can deal with low event rates. It can personalize and analyze every single campaign, not just the top ten or twelve.

Most significantly, a mature AI system already knows your customers. It knows what does and doesn’t work for each one. When it’s time to roll out a new campaign, much less effort is spent on generating and testing ideas. The entire process can take only a few minutes — a massive time savings.

Speaking of saving and generating money, AI has already been used in notable ways:

  • Netflix has valued its recommendation engine at $1 billion per year. [Source: Business Insider]
  • Google reduced its electricity consumption by 15% (and saved millions) by using DeepMind AI. [Source: Bloomberg]
  • UPS used AI to optimize its travel route and saved 10 million gallons of fuel per year. [Source: CNN]

AI Is Turning Marketing Upside Down

Traditionally, marketing campaigns are designed around a message or a product. The message is predefined and based on the customer lifecycle. The campaign itself defines who is targeted. AI takes this process and turns it on its head:

  1. First, the audience is identified.
  2. Next, hyperpersonalized messages are created and predicated on individual preferences.
  3. Contact is made based on the channel and time preferences of the person.

This customer-first cycle results in improved KPIs, better decision making, more leads, and more conversions. In fact, 80% of marketing automation users saw their number of leads increase, and 77% saw the number of conversions increase [Source: VentureBeat].

The Benefits of AI-Enabled Marketing

From the business side of things, we’ve seen that AI is a proven way to save time, cut expenses, and streamline marketing processes. What else does it offer?

Many of its big draws, at least from a marketing perspective, are down to personalization:

  • Web and app personalization
  • 1:1 dynamic emails (i.e. email content that changes per the customer’s interests and other factors)
  • Content prioritization
  • “Segment of 1” — ultra-precise customer segmentation

With this level of personalization, much less time is spent in fine-tuning campaigns, as every contact can be treated as unique. And as the AI recommendation engine matures, its performance is continually enhanced.

Where Is AI-Based Marketing Headed?

As AI-based marketing becomes more common, we will see a shift in marketing roles and mindsets. Marketers must become more conversant with advances in data technology. They must be creative enough to provide that spark of humanity that marketing needs, yet conversant enough with data technology to work directly with AI systems.

Firms and individuals are seeing the need to invest in AI. To learn more about what AI is and how it will impact marketing, tune into Absolutdata’s free recorded webinar, Use AI to Improve Your Personalization Approach.

Authored by Dr. Anil Kaul, Founder & CEO, Absolutdata and Rajat Narang, Associate Director, Absolutdata