Artificial Intelligence Is Redefining Marketing

Artificial Intelligence Is Redefining Marketing

Digital technologies are at the center of everything. The ability to act smarter and move faster determines whether a business flourishes or flounders. Yet generating greater value for customers while producing new efficiencies for an organization requires more than sophisticated devices, systems, and data frameworks.

“Artificial intelligence, machine learning, and deep learning are revolutionizing business–and marketing,” explained Oliver Christie, artificial intelligence strategist at business consulting firm Foxy Machine, in an interview with CMO.com. “It’s an area that CMOs and others cannot ignore.”

To be sure, artificial intelligence (AI) is advancing rapidly. The introduction of mathematical algorithms that customize, contextualize, and act on data in smarter and better ways is changing the business and marketing landscape. What’s more, the ability for machines to learn over time and adjust the underlying algorithms and actions is advancing. Together, these technologies–along with new types of computing systems that deliver enormous processing power through the cloud, including so-called “deep learning”–are introducing new and more sophisticated capabilities, including predictive analytics, chatbots, virtual assistants, and augmented reality.

“Data has become the currency of marketing, and marketers will now have access to more data than ever,” said Frank Palermo, head of the Global Technical Solutions Group for tech services and IT consulting firm VirtusaPolaris. “AI can power a deep understanding of customer behavior and can provide decisions on what time, which channel, and which message variant to use for interaction. Leveraging AI tools to process data more efficiently and uncover new insights faster provides a significant competitive advantage.

Yet the task isn’t without steep challenges. The effective use of AI requires new thinking, new skills, and new business and IT frameworks. As digital technology takes root, business models and IT models are undergoing profound changes. Today, Palermo told CMO.com, “Marketers can no longer buy customer loyalty. It must be earned through engagement and value.”

AI Gets Real

Already, digital technologies are pushing the boundaries on AI. Within business and marketing, systems are already used to spot behavioral patterns and buying trends, serve up more customized content through emails and web pages, and handle tasks such as speech and image processing. For example, Amazon now provides speech, image, and barcode searches through its mobile app. It recently announced three more tools–Lex, Polly, and Rekognition–that work with its popular Echo device. The framework taps Amazon’s Alexa speech processing engine, which also listens and captures audio snippets along with specific requests for items a consumer wants to purchase. AI processes and filters the results and plugs them into future screens and pages.

In fact, analytics is perhaps the most advanced and mature use for AI within marketing. Most retailers have turned to big data sets to contextualize and personalize messaging–though results vary. “The right mix of demographic, POS, geolocation, social, and other data can help generate the right offer at the right time and situation,” said Mark Asher, director of the corporate strategy for Adobe (CMO.com’s parent company).

It can also spot trends and patterns before they become apparent. In the now well-known case involving Target, the retailer sent out advertising materials to a young woman based on analytics that showed she was pregnant given her purchase of seemingly unrelated items. The problem? She hadn’t yet told her father, who saw the mail. The algorithm figured it out based on patterns.

Although Amazon is the acknowledged leader in this space, other retailers and companies in different industries are catching up. Jake Rheude, director of marketing and business development at Red Stag Fulfillment, an e-commerce firm, said that CMOs and others should be thinking beyond the four walls of their enterprise–out to partners and across the supply chain.

“The goal is to know exactly what customers want, sometimes before they even know what they want,” he told CMO.com. “This requires a much deeper understanding of behavior, motivations, and real-world patterns.” Yet it also requires a supply-chain and fulfillment system that can work in sync with AI to adjust inventory in a fast and agile way–as businesses scale marketing and sales campaigns up and down on a dynamic basis.

The end goal? Smarter websites and e-commerce engines, along with more targeted marketing messages. Another industry particularly ripe for the technology: travel, whose websites essentially serve up the same results to everyone based on search terms or categories. However, using AI it’s possible to plug in past clicks, preferences, and purchases, along with information from reviews and other sources, to deliver far more relevant results.

Even more advanced technologies are emerging. For instance, Google, Facebook, and others are incorporating image and facial recognition. DuLight from Baidu, for example, recognizes what is in front of the wearer and then describes it back to the person.

Time To Chat?  

AI is more than an analytics tool. Over the past few years, for example, chatbots have begun to emerge. These systems rely on AI to process text or speech and deliver an appropriate response to the user. Among those industries already relying on the technology: airlines, travel agencies, online retailers, health-care providers, and banks. In some cases, the goal is to direct customers to marketing materials or product information. In other instances, the aim is to deliver products or technical support. These systems rely on AI and machine learning to assemble contextual information and deliver personalized results. The systems also apply data from searches and interactions to improve the process over time.

“Chatbots are the next frontier. Chatbots bring an appeal of always being available and providing consistent customer assistance,” VirtusaPolaris’s Palermo told CMO.com. Although many systems aren’t yet sophisticated enough to handle real-world interactions–they tend to follow somewhat rigid and inflexible scripts–the technology will likely move into the mainstream over the next few years and even extend across organizations and services through APIs.

Added Asher: “There is still a lot of science that needs to be developed, and natural language processing is evolving. But it’s a space that CMOs should keep an eye on.”

Another area that’s attracting attention is virtual assistants. Already, some consumers use tools to notify them when prices change. For air travel, mobile apps such as Hopper track destinations and predict pricing trends. In the retail arena, services such as Honey track pricing and apply discount coupons and codes automatically. Asher said that in an era of more informed and sophisticated consumers, marketing leaders must think in more innovative ways–including putting virtual assistants to work to handle tasks beyond basic pricing.

Finally, there’s the emergence of virtual reality (VR) and augmented reality (AR). Right now, it’s “a platform to watch and a place to experiment,” Foxy Machine’s Christie said. It could significantly expand today’s marketing and sales capabilities. These technologies could deliver much deeper and more life-like experiences, whether you’re buying clothes using a virtual dressing room–something that Neiman Marcus, Nordstrom, and others have experimented with–or shopping for a vacation or automobile. In January 2017, for example, BMW introduced an app that allows a user to explore its i3 and i8 vehicles in 3-D on their Google smartphones.

AI By Design

At this point, it’s wise for CMOs and other marketing leaders to examine AI products, solutions, and vendors, and, more importantly, to identify value points–situations, events, and customer connection points where AI and machine learning can introduce new or improved features, efficiency gains, and cost savings, Christie said.

“Marketing and advertising must become more focused and directed. Those that learn how to use it effectively will enjoy a competitive advantage,” he said. “The widespread adoption of ad-blocking software demonstrates that the current system isn’t working. Marketers must get smarter to boost click-through rates and conversions.”

Yet it’s also important to think of marketing in a broader context, Adobe’s Asher said. In today’s digital business environment, all functions within an enterprise intersect. This translates into a need to work across departments and tap the expertise of data scientists. In the emerging digital business world, chatbots, virtual assistants, AR/VR, and predictive analytics take on a more holistic context. These tools–and the underlying AI–support a 360-degree customer journey in which marketing is a single, yet critical, component. They also help organizations project a tech-savvy approach and boost brand image.

Palermo said that CMOs must work with CIOs to transform challenges into opportunities and technologies into revenue–all while focusing on security and privacy. “The reality is that they are both on the hook for turning all the data they collect about the customer into growth opportunities,” he stated.  

Palermo also believes it’s important to focus on how to balance automation with the human element and think beyond traditional marketing and advertising models–especially as consumers fight back with ad blockers and pricing bots. The best solutions, he said, tap “paradigms and platforms that customers are already familiar with, such as text messaging and voice recognition.” Organizations and brands that get it right, Palermo added, are “likely to completely change the interaction and conversations they have with their end customers.”