The core principles of marketing are understanding the needs of the potential customer, matching that need with the right products or services, and convincing the potential customer to buy. Artificial Intelligence (AI) in marketing can dramatically enhance the outcome.
A 2018 study by McKinsey showed that out of over 400 uses of AI, marketing was the area where the advanced tools offered the most value. Therefore, it is not surprising that a global survey conducted by Deloitte in 2020 revealed that among the early adopters of AI, the top three out of five AI objectives were marketing-focused. They include;
- Advancing relationships with customers
- New products and services creation
- Enhancing available products and services
The use of AI in marketing merges AI technologies with data from brand and customer experience to create precise analytics into market trends and customer journeys. Furthermore, advanced AI tools that make use of machine learning (ML) and natural language processing (NLP) can guide decision-making which can give a brand an edge over its competitors in a dynamic market.
In this post, we will explore the top AI marketing trends to watch in 2023. We will also highlight the different areas AI marketing tools have become a strong marketing force and their ethical use.
Table of Contents
The growing role of AI in marketing
AI is now taking on more advanced roles in marketing. Brands and marketers now use AI tools to automate tasks like customer retention, lead scoring, and lead generation. Using advanced AI tools, marketers easily identify and engage potential customers at the best time when the chances of a positive response to marketing messages are high.
Some AI tools can now analyze potential customers’ purchase histories and use them to create customer profiles. This makes it easier for marketers to deliver targeted ads to different customer profiles in line with their preferences. AI-powered targeted marketing can boost engagement, increase conversion rate, and improve return on investment (ROI). There are three types of AI marketing solutions, namely;
- Machine learning: makes use of computer algorithms that leverage historical data to auto-analyze information and boost digital marketing campaigns
- Big data and analytics: AI marketing tools sift through massive datasets, narrow them down to critical data, and provide insights that can enhance decision-making
- AI marketing tools and platforms: these centralized platforms make it easier for digital marketers to manage the large volumes of data that have been generated and make data-driven decisions
Increased adoption of AI technologies
American Marketing Association’s August 2019 survey showed that AI adoption jumped by 27% in past one-and-half year. In December 2022, McKinsey released a new report that showed that AI adoption had more than doubled since they started tracking it in 2017.
McKinsey’s report also showed that AI adoption has plateaued around 50% since 2019. Improved AI adoption has been held back by issues around transparency, lack of awareness, and the need for more collaboration in AI-powered system production to increase trust. Other factors that stand in the path of AI adoption include;
- Security weakness
- Regulations
- Lack of efficient strategy
- Cost
- Huge data requirements
- Company culture
No thanks to the COVID-19 pandemic, more companies accelerated their AI adoption plans. It is projected that AI adoption will experience a 38.1% compound annual growth rate between 2022 and 2030. The areas where the use of AI in marketing has become invaluable are discussed below.
Advanced Customer Segmentation and Targeting
AI-powered tools can now analyze and split a brand’s audience into separate groups with each group having shared characteristics or interests. Backed by this data, marketers can now create custom outreach to different audience segments—like targeting customers with paid campaigns—to maximize ROI.
These AI tools can also actively track dynamic changes (including customers’ behaviors, mindset, needs, social profile, demographic, and age) and update the data frequently so that marketers are better informed to make data-driven decisions.
Netflix and Amazon are some of the companies that use AI algorithms to offer recommendations to visitors based on purchase history and browsing behaviors.
AI-Powered Content Creation and Optimization
Microsoft founder Bill Gates wrote an essay in 1996 when he said “Content is king”. There are six qualities of great marketing content including engaging, providing value, demonstrating passion, strengthening relationships, boosting clout, and sharing the business culture.
Sadly, not everyone is vested with the skills of crafting great content. That is why marketers are now relying on AI-powered content creation tools like GPT-4 to craft optimized content with all the qualities that will drive home the intent.
Coca-Cola recently jumped on the AI trend following its partnership with OpenAI and Brain & Company. They will use DALL.E and ChatGPT to create digital images in a bid to improve operations and enhance their marketing goals. The company plans to use these AI-powered tools to produce personalized adverts.
AI-Enhanced Customer Service and Support
Great customer service is key to customer retention—which in turn will increase revenue. It is usually easier to keep a customer coming back than trying to get a new customer. However, keeping up with customer service can be a serious challenge.
To avoid keeping customers waiting for too long—and leaving them frustrated—some companies are using AI-enhance customer service chatbots to answer frequently asked questions in real time. These chatbots will qualify each customer and only route hot leads to a human agent. This lowers the traffic volume that human agents have to deal with.
Payoneer, an international payment processor, recently started using AI chat support to deal with the huge wave of live chats. The bot will only refer you to a human agent when it is unable to answer your question.
Voice AI and Voice-Activated Marketing
Voice-activated adverts are interactive audio used by a brand to boost engagement on digital voice channels. They can be deployed to in-car infotainment systems, mobile streaming services, and smart speakers.
Since they speak directly to interested listeners who are allowed to interact using voice prompts, it tends to record better engagement. Coice-activated marketing is often used with Google Assistants, Siri, and Alexa. Marketers are now using AI voices to optimize their presentations for better engagement.
AI-Enabled Marketing Automation
The ability of AI tools to analyze vast amounts of data has been exploited for AI-enabled marketing automation. AI algorithms identify keywords and analyze website traffic. to track the activities of competitors and boost search engine ranking.
With the help of useful AI tools, marketers can now have better insights into audience preferences and tweak their content to match the interests and expectations of their audience.
AI-Powered Visual Recognition and Analysis
Visuals play a key role in grabbing the attention of the audience. That is why more marketers are turning to AI to create compelling videos and images that will help drive engagement. AI tools can also analyze video performance including presenting data on what part of the video the audience found more engaging.
Backed by data, marketers can now create videos that convert better or create targeted videos that resonate with a particular group or audience. Visual recognition technology has also proven useful in the automation of video tags which can save long hours of labor.
Sephora, a global beauty brand, has a plethora of AI tools to enhance customer experience. For example, their Color IQ tool scans the customer’s skin and recommends a number that provides a precise foundation match.
Ethical and Responsible AI in Marketing
It is the responsibility of marketers to make sure that their AI systems are properly trained with representative and diverse datasets to prevent bias. Also, there is a need for routine audits of such systems to catch any form of bias.
While the goal of every marketer is to close a deal, AI systems designed to enhance marketing should be transparent and fair and reflect the values and ethics of the organization.
Conclusion
As early as 2017, it was already predicted that AI will dominate marketing. We are now living that prediction—and there are no signs that AI will go away again. The ability of AI-powered systems to analyze data and offer insights into the behavior of customers has revolutionized marketing.
The evolution of AI will continue and it is hard to predict how it would affect marketing in the next decade. That is why it is crucial for every marketer to stay updated with emerging trends to level up with their competitors—and possibly get ahead of the curve.
