Use of Artificial Intelligence in Marketing

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Updated: Mar 28, 2022
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The Oxford English Dictionary defines artificial intelligence as “the theory and development of computer systems able to perform tasks normally requiring human intelligence.” To elaborate this definition, Artificial Intelligence will use the same algorithm once created to produce different results based on the amount and accuracy of data fed. Most large companies employ Artificial Intelligence tool in their marketing strategies for personalized and relevant communication, personalization of products, set prices, integrated marketing communication and. It also allows doing things better and faster because of its ability to mine data that has been collected to make cognitive insights.

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Deep learning and Artificial Neural Network are the two branches that are being used for predicting results.

Artificial Intelligence originated during 1950’s but the due to the lack of powerful computers it did not make any progress. There was not enough data capturing techniques back then. Artificial intelligence was developed to solve general problems mainly in mathematics and physics. However, with the emergence of powerful computers in the 21st century artificial intelligence became boon to many other industries including product marketing. Common examples of Artificial intelligence are computer games, data mining, and robotics and speech recognition. Artificial Intelligence will help strategize both traditional and digital marketing. Artificial Intelligence will help you decide what specific marketing is good.

Dan Rosenberg says “According to constellation research businesses across all sectors will spend more than $100 billion per year on Artificial Intelligence technologies by 2025, up from a mere $2 billion in 2015. The marketing industry will be no exception.” Artificial Intelligence will make Marketing very intelligent, effective and personalized. Author explains that Artificial Intelligence capabilities are already far advanced than what marketers could harness. Data collection and its authentication are challenging but necessary for Artificial Intelligence to act on and optimize marketing strategize.

Customer Relationship and Management (CRM) software’s are being used to find similar patterns within sets of data to form target market segments. All CRM vendors use certain types of artificial intelligence. All top five vendors understand the power of Artificial Intelligence and believe that it is the future. All these companies are buying Artificial Intelligence companies so that they can incorporate Artificial Intelligence technology into their software’s. Salesforce claim that the Artificial Intelligence will increase the global revenue by $1.1 trillion from 2017 to 2021. Salesforce bought Tempo, MinHash, PredictionIO and Metamind and merged them in to its Einstein AI tool. This tool makes predictions and recommendations about the outcome of your deals. It helps a business prioritize next best steps. AI has the capacity to provide personalized marketing for every single customer. Black Diamond, a Utah based company was able to increase its revenue by 15.5 percent with Einstein tool. Oracle, IBM and SAP make similar claims about their tools.

Marketing in the international markets has always been difficult due to difference in demographics, Cultures, religions and various other factors. Marketing Managers have to rely on foreign marketing firms for entry into those markets. It costs company lots of resources to grasp a market share. For Artificial Intelligence data is the key, the more accurate data you have more accurate prediction will be. With the emergence of CRM that are Artificial Intelligence capable, companies can save a lot of money. These firms can buy data from companies such as Google and Facebook who are mass data gatherers and feed it into their Artificial Intelligence capable CRM’s. Artificial Intelligence can help easy introduction and penetration in to foreign markets. Marketing plan generated through reliable Artificial Intelligence CRM will be far more dependable than reliance on a foreign firm. There will be no channels involved, therefore, low chances that an ethical issue may arise. No chances of conflict between channels.

Critics of Artificial Intelligence say that Artificial Intelligence still needs humans and customer experience is degraded because nobody likes chatbots when you visit a website. Most annoying of all is the Robocall marketing that also started employing Artificial Intelligence. These practices are legal but unethical. Moreover, with chat bots after few basic question they cannot get the conversion going until they are replaced by a human. However, few companies started paying attention to customer experience and in the very near future customers will not be disappointed. For example, Sephora’s Kik bot uses Artificial Intelligence to quiz customer about their makeup choices and then suggests them relevant products with all the information a customer may need to make a decision. A sales rep may not know all the information that Artificial Intelligence tool can access. Additionally, sales rep. could be biased and may prefer one product over other and that may not apply to other customers. A rep can discriminate but a bot will not. Seamless integration is important so that a customer should not be able to differentiate whether the conversation is happening with a chatbots or a real person. Once seamless integration is achieved, nobody is going to complain about customer experience. However, with chatbots behaving like humans, will benefit people who launch campaigns on social media to promote their agenda because an army of chatbots could work 24 hours to influence a behavior and it would be almost impossible for companies like Facebook to differentiate between a human and a bot. Ethical issue are very likely to arise with the emergence of AI.

Artificial Intelligence could keep the marketing costs low. It is efficient and can perform tasks many times faster than a human being. Businesses always follow the route that is inexpensive because it provides a competitive advantage by either keeping their product prices low or providing better customer service. Cheaper product also means increased profit margins. However, Artificial Intelligence also comes at a cost too but it is comparatively cheaper when compared to human wages and salaries. According to Ajay Agarwal, who is professor at the University of Toronto Rotman School of management, “AI serves a single, but potentially transformative, economic purpose: it significantly lowers the cost of prediction.”

According to Satya Ramaswamy “Oxford University study predicted 47% of jobs could be automated by 2033. Even the near-term outlook has been quite negative: A 2016 report by the Organization for Economic Cooperation and Development (OECD) said 9% of jobs in the 21 countries that make up its membership could be automated. And in January 2017, McKinsey’s research arm estimated AI-driven job losses at 5%”. Gain in productivity through Artificial Intelligence also leads to loss of jobs. However, technological development has always led to increased GDP. Economists brought the same question when manufacturing jobs left United States for cheap labor in other countries. Who could have thought back then that the unemployment would be historic low in 2018. Unemployment of less than 4% in United States could be considered as a full employment. Whenever a new technology is introduced it creates temporary unemployment in the short run but economies adjust for changes in the long run. Technology always creates high paying jobs and eradicates low paying jobs. It increases the standard of life of everybody. When the population of a nation is fully employed technological improvement is the best weapon to enhance economic prosperity. According to Wilson and Daugherty “Certainly, many companies have used AI to automate processes, but those that deploy it mainly to displace employees will see only short-term productivity gains. In our research involving 1,500 companies, we found that firms achieve the most significant performance improvements when humans and machines work together. Through such collaborative intelligence, humans and AI actively enhance each other’s complementary strengths: the leadership, teamwork, creativity, and social skills of the former, and the speed, scalability, and quantitative capabilities of the latter.” Human minds are not capable of processing gigabytes of data but machines are good at it. At the same time machines may not carry interpersonal skills but human are good at it. It is also the humans who make these machines capable of mining such amounts of data.

Marketing managers sometimes use hit and trial methods until they find the one that works best. Money and time are critical for new startups and small businesses and cannot take chances. Almost 90% of the startups fail in the United States because most of them run out of money due to no or low revenue realization. Artificial intelligence can help identify target markets and early revenue realization. Artificial intelligence could also help to find the right marketing strategy. According to Microsoft by 2035 Artificial Intelligence has the potential to increase economic growth rates by 1.7% and productivity by 40%. Moreover, 20% of the content marketing is 2018 is already created by Artificial Intelligence. Salesforce claim that the Artificial Intelligence will increase the global revenue by $1.1 trillion from 2017 to 2021.

Artificial Intelligence is being used to create personalized products to enhance customer experience. Marketers always face challenges when customers want different variation of the same product and the company can only supply few variations. Mercedes marketing managers faced the same issue when customers wanted customized cars. Management responded by replacing regular robots with AI capable robots that can make custom builds at their Stuttgart plant in Germany. It not only helped the workers on the factory floor by reducing their strenuous labor but also no two cars coming out of the plant are same. Quality control became very efficient and the sales grew. Mercedes Marketing team was able to differentiate their product from competitors. General Electric turbines are using AI to predict the failure of a specific part. AI is helping to differentiate products from competitors and making it easier for the marketing manager to create an effective marketing mix. In the very near future all companies will use some kind of AI in their marketing mix.

Many companies employ Artificial Neural Networks that is very similar to human nervous system in terms of cognitive abilities to forecast demand and set a price for their products. According to ABCD These neural networks are so complex that even human do not completely understand what is going on in those networks and call them black box. Amazon marketplace uses algorithm to set and alter prices of their products. In December 2013, in a single day Amazon, Best buy and Wal-Mart implemented 2.5 million, 52956 and 54633 price changes respectively. These algorithms respond to changes in demand, supply, competitor prices and update prices automatically. Pricing has become very complex and companies focus on gathering as much accurate data as possible to feed these networks to set the prices. Airlines use AI to provide personalized ticket prices and update prices many times a day. Pace, Perfect Price, Incompetitor, E commerce Business and Wise Athena are prominent AI based pricing algorithms.

Just a little over a decade ago, companies used media such as newspaper, banners, phone books and in-person resources to advertise. Now, in a world where digital technology is more advanced, platforms such as Facebook and Google have the resources and capabilities to collect raw data from the consumer and use it for digital marketing. Sometimes by collecting cookies from the consumers while they are browsing the Internet or tracking the online movement of a consumer, these companies are the most important tools for online marketers. But if there is something that will have a major impact on saving costs, creating more sales and increasing efficiency it is artificial intelligence. The most important element of artificial intelligence or AI is data. Artificial intelligence is one of the only technologies other than humans to work with raw data and benefit the online marketers greatly. All these years, humans have been manually sorting the data and understanding it in order to benefit the marketers. With the help of AI, large chunks of data that require repetition and analyzing can be done more efficiently and faster than what humans are capable of. Artificial intelligence can understand the work and the data for any online marketer and make it successful by being able to apply personalization.

Artificial Intelligence is also helping to establish integrated marketing communications. Professor Dome, who is an integrated marketing communications specialist, believes that AI will completely change branding, marketing and advertising. Dome is creating AI based master algorithm for marketing and believes that it will change marketing forever. Moreover, AI is being used in refining and combining promotional efforts to help sales, advertising, promotional and marketing managers. It is used to generate message but it the duty of the marketing manager to keep it consistent and complete so that it is not lost in the long channels of communication.

Managing promotion is an important aspect of marketing to affect behavior. Artificial intelligence can use the large database to personalize advertisements based on various criteria such as gender or age or interest. The usage of data by humans is limited because each segment of the data needs to be analyzed separately and rather be very time consuming. Using different algorithms based on the end consumer and targeting each group separately can be very costly. AI makes it possible to enhance the web experience and achieve its goal of informing, persuading and reminding the target customers about their product. Companies such as Google, Facebook and Twitter tack their customers and learn about their shopping patterns. These companies are advertisement giants and have billions of subscribers that use their services. It is easier for them to learn about their user habits and interests. For Example, when a consumer searches for a product on a browser, related results are spit out and simultaneously algorithms tracking their IP addresses place a similar product advertisement on their social media page. The advertisement follows you on the Internet on every page the person visit. Artificial intelligence technology is used in almost all websites that has heavy flow of traffic on a daily basis to achieve their marketing goal through personalized advertisement. However, Bad actor will use personalized communication to manipulate public opinion during elections. Fake news and videos will be created at a greater scale. Consumer has very limited privacy at present and with AI there will be no privacy at all.

Newspaper and television advertisements are not specific based on the audience; it is just a list of advertisements for the average person. Digital marketing is taking over traditional marketing. Digital marketing includes social media marketing, content marketing, search engine optimization, search engine marketing, pay per click advertisement, email marketing, radio marketing, television advertisement and mobile phone advertisement. Digital marketing could get very expensive without proper planning and it is difficult to find what form of marketing is good for your business.

Content creation used to be the most time consuming activity for marketing managers but not any more. Machine learning, which is a subdivision of artificial intelligence, can pick up human traits such as learning, reasoning and adapting. Along with the creativity of a human marketer, AI will unite the power of accurate data analysis and create successful Internet marketing campaigns. To add on, AI can also help improve one of the oldest and most beneficial marketing resources, the email. Artificial intelligence helps in automating the process of email marketing such as coming up with subject line, optimizing the timing and adapt to the goals of the user’s responses and learn from the user’s feedback. Anything from extracting information from photos, videos or text artificial technology is a platform that can help business brands show users relevant posts and ads which in return increasing the conversion rates. Earlier this year, Toyota implemented the AI technology to market their crossover, the Rav4. The company wanted to join the individual’s favorite activity to the crossover but in a unique way. The agency fed 1000 activities such as biking, dancing and cooking to Watson; IBM’s machine learning technology. With the help of the lists of activities, they were able to produce about 300 unique videos to target the audience on Facebook and Instagram.

To conclude, Artificial Intelligence is being used in almost all sectors of marketing let it be customers, company and competitor analysis or selecting the right marketing mix. AI’s marketing share in marketing industry is increasing at an astronomical rate and it is very likely that AI will take over all operations of marketing in next two decades. Jobs will be lost as many companies are predicting in the marketing sector not related to AI but new high paying jobs will be created in the marketing sector related to AI. It is helping the businesses to achieve their marketing goals efficiently. Misuse of this technology could create social and political problems by influencing public behavior through disinformation that is helpful to the organization promoting its hidden agenda. However, technological benefits come at the cost of social problems. Positive impacts of AI will outrun its negative impacts.

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Use Of Artificial Intelligence In Marketing. (2019, May 22). Retrieved from