AI Applications for Digital Marketing

17 June 2021

This is Part I of a IV-part series focusing on AI and three applications in digital marketing. This first installment is a high-level view of artificial intelligence and highlights the topics of each subsequent piece I will take a deeper look at, Segmentation and Personalization, Media Buying, and Loyalty Marketing.

Automation is not a new concept; in fact, marketers have been using digital tools and algorithms to maximize their effectiveness and productivity for years. However, the correlation between effort and results has always been difficult to define, and intuition alone isn’t enough to guide a marketer in focusing on the right audience, reaching out to them at the right time, and using the right channels. Clearly, these things are key to building a successful brand and fostering engagement, but how can you be sure that your marketing efforts are yielding the desired results?

Marketers developed a solution: measuring big data. By observing the trends, preferences, and patterns of behavior of their target market, they were able to get a more complete picture of how to strategically reach them.

There was still a problem though, and that is that analyzing big data leaves you wading through a sea of information, not all of which is even relevant. This is where AI enters the picture.

What Is AI

Simply put, AI, or artificial intelligence, is the science that makes computers do things that require intelligence when done by people. AI provides marketers with a simple way to organize, segment, and filter big data. This leads to a deeper, more accurate understanding of human behavior and how to apply that insight to your marketing efforts.

AI may sound advanced, but the fact is that it’s here right now, and it’s being used by businesses of all sizes. Here are a few practical applications for AI in ecommerce.

Segmentation and Personalization

In order for businesses to reach their target audience, they first have to know who their target audience is. While marketers used to gear their campaigns toward people of a specific age or gender, these don’t provide nearly enough information, as preferences and buying habits will also vary greatly across different geographical regions, household incomes, marital status, and even the types of social media used.

You already know that developing customer personas is one of the most effective ways to fine tune your marketing campaigns. AI in digital marketing allows you develop richer, more accurate personas, helping you to effectively market your products or services to individuals or smaller groups who have specific goals and interests.

Media Buying

While the media-buying, process has remained largely the same for decades, technology has drastically changed the game. Marketers now have thousands of decisions to make and different outcomes to weigh when it comes to buying media.

AI eliminates human bias from the media-buying equation. It takes in massive amounts of data, and then uses algorithms and equations to measure the success of marketing efforts and reallocate money accordingly. When applied to media buying, AI can learn from your past campaigns to give a clear picture of how and to what degree your previous media combinations affected your business, helping you make educated decisions regarding future campaigns.

Loyalty Marketing

More and more, customers are relying on messaging platforms to connect with businesses to get answers to their questions and resolutions to their problems. While businesses of all sizes, from international corporations to small, locally owned service providers, are embracing this new trend as a way to engage with their customers and receive valuable feedback, they’re finding that the manpower necessary to keep up with the flood of incoming messages is taking a toll on their productivity.

For example, Macy's announced its customer service unit is testing a "mobile companion" tool using AI. The tool enables shoppers to get answers based on the store that they are physically shopping in rather than having to find a sales associate.

AI-powered chatbots have come a long way, and businesses are now using them to maximize their own efficiency while fostering customer loyalty.

While AI has not eliminated the need for skilled marketers who have an understanding of human behavior, it is a powerful tool that can be uses to more accurately build marketing campaigns, increase customer engagement, and maximize efficiency.