AI for Marketing: A Mini Primer

Ankesh,

Editorial Intern,

Indian Society of Artificial Intelligence & Law.



Marketing is the process of promotion of a product, through advertisements, or through the promotion of various offers, etc. Generally, the company making the products used to hire a marketing agency to create a good reputation of the product or to present the product in the best possible manner, including personalised advertisements targeting the core consumers of the product, thereby making more people buy the product. In the era of computers where web advertising is at its peak, and Television and Print advertising are fading out slowly the use of AI for marketing has become very prominent.

A typical advertisement shown on a website is generally portrayed through an Advertisement company, like Google Ads, or Adobe’s advertising tool, among many others. This software act as a medium between the people who want to put up an ad for their product, and the people who have spaces where they can put adverts. Advertisements are the most well-known way to make money on the internet. These advertisements can be put up anywhere on the internet thus can target every person using the internet. Although, these come with various concerns which are discussed later in this article.


AI for Marketing

In a simple line, we can say that the role of Artificial Intelligence here is to analyse a person’s data and target the person an ad specific to his need. But it is not that simple at the end of the day, with a lot of players involved and a lot of mediums to target, it ends up becoming a not so simple process, however, the end theory being the same – Identify your possible core consumer and target the adverts to them. In recent times not only products and services, bit even political parties have started to use these tools to attract voters. It has become one of the major concerns in these times.

But first, we need to understand how does AI works or what it is exactly. Artificial Intelligence or AI has various approaches to it at the end of the day. It basically analyses the data given to it, to produce results as required by the situation.

In Marketing, artificial intelligence technologies are used to make decisions on the basis of the data collected, then analysed, including any other input which has been given by the user of the system. One of the major advantages of using AI is the speed, while the analysis can be done by a human equivalent, the speed of computation is obviously very different therefore managing adverts to billions of people becomes an easy task. The artificial intelligence tool makes user profiles based on the data which is available to them, and then these profiles are analysed to get some idea of what an internet user is like, for example, if an AI tool gets that from a particular account or IP the user is somewhat perceived to be a person in the age of 18-24, then the advertisements shown to him would be of the product related to this age category. In the same way, how a person uses the internet could also be beneficial for the advertiser, so if a user is most active between morning 6 to 10 AM, then more relevant advertisements could be shown to the user.

One of the other advantages is that by the use of computers and the internet an advertisement could be made to any part of the world, thereby giving more exposure to the product. AI tools use these user profiles to learn how to communicate with customers and maximize efficiency by sending personalized messages in a timely manner without the involvement of marketing members. Many marketers today use AI to strengthen their marketing teams or do more tactical tasks that require fewer human nuances.

AI adoption by these companies is also on the rise, where we see that most of the major companies are using advantage of these technologies, even the start-ups and local businesses are highly benefitting from using these. Usage of these tools, help the marketers and the producers of the product gain a very comprehensive knowledge of their target user base, and not only these work for a particular project but the data can also be reused, thereby benefitting the marketing companies too.


Steps or the processes in AI Marketing

The AI uses different tools, to finally achieve its end goal, some of these tools used are mentioned below the process used by Artificial Intelligence tools can be simplified into a step-by-step process of how these insights are gained by the tools. The first step is the collection of data which is the topic of one of the liveliest debates in current times.

The furthers steps in AI marketing are as follows:

  • Data Analysis

  • Automated Decision Making

  • Content Generation

  • Personalization of the content


Components of AI in Marketing

It is clear that artificial intelligence plays an important role in marketers communicating with consumers. The next component of AI marketing is today's leading solution to bridging the gap between the amount of customer information collected and the next steps that can be applied to future campaigns. These components can be understood in three categories:

  • Machine learning – The very first step in data analysis, is the algorithm. This component included those algorithms. It is powered by artificial intelligence and has computer algorithms that can automatically analyse and improve information through experience. Machine learning devices can analyse new information related to modern historical data to make decisions based on what worked or didn't work before.

  • Big Data and Analytics – The advent of digital media sparks an influx of big data, enabling marketers to understand their efforts and identify value across channels. In addition, data overload has occurred because many marketers have a hard time deciding how much data to collect.

  • The final component includes the actual tools used by the AI to deliver best possible results. Powerful AI solutions provide a central platform for marketers to manage the vast amounts of data they collect. These platforms can get detailed marketing information about your target audience, so you can make data-driven decisions about how best to reach your target audience.


Companies (5) with their AI marketed Products

The use of artificial intelligence in marketing is not a new concept and over the period of years, almost all of the major industries have adopted this method. Artificial intelligence is used in marketing initiatives in a variety of applications across a variety of industries, including financial services, government, entertainment, healthcare, and retail. Each use case delivers results ranging from improved campaign performance to a better customer experience and to improve the effectiveness of your marketing efforts. Some of these companies along with the application of artificial intelligence are mentioned below:


  1. Google is probably one of the biggest giants in this field and since they provide an array of services to their customers in this regard. They have their own advertising agency ‘Google AdWords’ and they also offer the channel for the creators of videos, or website to use their advertising placement through Google ‘AdSense’. In addition to this, having one of the largest internet user bases in the world, they use data personalization, to personalise these ads thereby targeting customers more effectively. Even the other mobile giant ‘Apple’ has been using AI tools, for a better marketing of their product, and also providing ad services like Google.

  2. Online e-commerce giants like Amazon and Alibaba are the other companies constantly using AI to reach the target customer audience. Since these e-commerce websites are a marketplace, and they all track the purchase history of products, as a result, they get a huge data set of customer’s choices and behaviours, and then use that for effective advertisements. In addition to this fixation of prices of the product during sales, or changing prices customer by customer is one of the tools used by these e-commerce sites. Amazon has also been working on checkout free stores in some cities in USA, where you just walk in to a store pick up a product, which have AI-powered sensors and cameras.

  3. Food Joints or Snack Joints like Burger King, Starbucks or most of the online food ordering applications are effectively using Artificial Intelligence to properly promote and market their foods, and just like the e-commerce stores even they use AI to manage how a customer has ordered their food, and promote more of that kind of product to the customer. Sending personalised messages, or personalised offers on some items is one of the major parts of AI marketing used by these companies.

  4. Facebook – One of the largest social media giants Facebook, which has products like Instagram to WhatsApp and even developing Virtual Reality product oculus uses AI to a much larger extent, and is often criticised for misuse of these data. Recently, Facebook’s WhatsApp changed its privacy policy thereby making it possible to given personalised ads on the messaging app. The move has also been criticised with the governments taking an active role in the situation.

  5. Nike – The sports brand Nike made headlines whenever it has used technology, be it the use of Nike+ sensors back in 2006 or letting people design their own sneakers. The company has also recently acquired a body scanning firm Invertex, to strengthen its technological capabilities. Here also sending personalised ads on email, messages are part of the AI tools used. Nike obviously has big plans for data collection and there is a lot to really learn in terms of AI applications now and in the future.


The Challenges for AI Marketing and Privacy Concerns


AI is still comparatively new to the traditional marketing concept and on one hand, it is welcomed by the companies with open hands, it has also raised some doubts too. Like Quality of data, and the time required to obtain an effective amount of data. Artificial intelligence tools take time and training to learn your organization's goals, customer preferences, past trends, understand the overall situation and gain experience. Not only does this take time, it also controls the quality of the data. Without training artificial intelligence using accurate, fast, and highly representative, high-quality data, tools make suboptimal decisions that don't reflect consumer needs and devalue the tools.

Another concern regarding the use of AI is privacy, as it became pretty evident from the article that AI requires data, but how is this data to be acquired? This question raises flags. The leading companies of the world performing or using AI Marketing are Google, Amazon which developed a large user base and now use the data of their customers to target adverts. A highly granular level of personalization is being used by today’s companies. Marketing messages are informed by a user’s interests, purchase history, location, past brand interactions, and a host of other data points. Although this isn’t a bad thing per se, and companies have evolved because of this but safety of data is a major concern here. Most people don’t even know what data of theirs is being shared, and this issue has only become worse in past years and more people are becoming aware of the situation, as more AI tools are being used.

Governments are cracking down on companies to investigate how is the data being used, and therefore it is the responsibility of these marketing companies to effectively follow law and is the job of governments to ensure that proper law is in place.


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