For a long time, people talking about artificial intelligence (AI) have been either seen as science fiction fans or scientists studying the far future. However, over the last few months, we have seen an increase in AI discussions within the marketing and ecommerce industry. These discussions are not about the far future, but about changes the industry is experiencing now. What happened?
First of all, data volumes have been massively increasing over the last years. Especially the rise of smartphones and the increase of mobile-driven business, in particular mcommerce, are heavily contributing new data streams. Data is a key requirement for AI to generate value, and now we have a good amount of data.
The second pre-condition is technology. A lot of computing power is required to turn data into insights. That’s always been the case, but the more data is about to be computed and the more advanced the expected outcomes are, the more sophisticated your tech stack needs to be. This stage has now been reached by the industry, so AI-driven marketing approaches can be tested in real-time. That wasn’t the case a few years back. So what does it mean for marketers?
User Focus Means High Personalization
Since the existence of marketing, it’s always been the goal of marketers to reach the audiences that are likely to buy their products. From spray-and-pray, like the traditional market criers do, marketing evolved to audience-specific approaches; showing a TV spot in a show that the intended audience is likely to watch is such an example.
However, the most-effective marketing is user-specific, so you only address the ‘right’ users. That’s where the industry is widely today. The next step is customer-centric marketing that turns advertising into a shopping assistant for each user; without AI, this step won’t be possible.
Taking this step will be unavoidable for marketers at a certain point. Let me share an example: the transition from communications with a wide audience to personalized marketing is similar to the transition from fixed to mobile phones. When you call a landline number, you do not know who will pick up the phone. On mobile however, you call a particular person who can choose to answer your call or not. To initiate a potential buyer to “pick up” your ad, the ad must be super-personalized and super-relevant. It should meet the needs of the customer and motivate him to make a purchase. That’s why personalization is the second biggest marketing trend these days – one that is highly connected with AI.
Personalization changes the process of communication with the user – you know who you are talking to, and you understand exactly what you want to tell him and with what tool. In order to effectively personalize advertising messages to users, marketers need AI.
In any advertising message there are usually several elements that can be personalized: images, titles, formatting, color, call to action and others. Plus, there are several devices and platforms for which the ad must be adapted: a computer, a mobile, a tablet as well as browsers and apps. The combination of all these factors creates trillions of combinations.
No single person can create this level of personalization in advertising, but AI can do it – at scale, in milliseconds. AI is thus becoming a great tool helping marketers to achieve their goals; saying this: AI won’t replace marketers as I hear often, but it will change the way marketers do their jobs.
Three reasons to use AI in marketing
1. Usable Real Time Data
You have access to more data than ever. But data itself means nothing without context. What kind of data do you need for which action? You don’t always know yourself, but AI does. AI-based algorithms are self-learning, detect different scenarios and turn them into action. Users can get an ad that might be more relevant than any other ad at a given point – thanks to AI that makes the right conclusions out of real-time data.
2. Deeper Knowledge Of Buyer
Campaigns supported by AI allow you to know more about users’ needs. Whatever style or type and whatever content of an ad a user likes or dislikes, AI can detect the patterns behind and leverage these insights to optimize the next ads for an even better user experience. Over time, the marketers’ goal to assist users at their shopping becomes real.
3. Budget Optimization
AI makes marketing more cost effective by reducing advertising waste. The better you understand your users, the better you can serve their needs and the less non-relevant messages you send them. Marketing performance improves measurably at the speed as the user experience does.
What’s Next?
Research AI is one of the big tasks of modern marketing. At our Criteo AI Lab, we are constantly investigating together with universities and other research institutes the impact of new data sources on marketing performance in real-time scenarios. Weather for example has a clear impact on users’ shopping behavior; the likeliness to shop on a rainy Sunday afternoon is definitely higher than on a warm and sunny day.
Can weather data thus improve advertising performance? And how about offline data? How does data about consumers’ offline shopping behavior impact online campaigns? Test results of initiatives like this will help advertising to become even more relevant for users in the future and contribute to turning advertising into shopping assistance.
