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What is artificial intelligence marketing?

Most people will have heard of artificial intelligence (AI) and know how important it can be for industries moving forward. AI is currently revolutionizing many companies’ systems and processes —but how can it help marketing? 

Marketing is a less understood and explored domain where AI offers great potential. Personalized marketing experiences drive sales increases of up to 80 percent. Modern marketing operations are now taking place over multiple channels and touchpoints before prospects purchase. AI is now a critical part of effective marketing operations.

AI marketing helps marketing teams make sense of data in real-time to improve the efficiency and results of marketing operations. In this guide, we’ll discuss how AI marketing can help your business, the pros and cons, and examples of successful AI marketing campaigns.

 In this AI marketing guide:

What is artificial intelligence marketing?

Artificial intelligence marketing tools can help you make key, data-driven marketing decisions more easily. By gathering data and analyzing it rapidly, artificial intelligence can make a number of quick tactical choices that would take us humans far more time and effort. 

Artificial intelligence marketing software may handle tasks like:

  • Data analysis
  • Economic and consumer trend analysis
  • Media buying
  • Content creation
  • Content personalization.

 

How does artificial intelligence marketing work?

Artificial intelligence marketing uses customer data from online and offline sources, coupled with concepts such as machine learning, to predict what users will do on websites or apps. Businesses can then target specific users with personalized content on the right channel at the right time. 

The increasing role of AI in marketing campaigns reflects the tremendous growth of AI. According to IDC, spending on AI systems will reach $97.9 billion in 2023. IDC predicts retail and banking industries will lead this growth, but it will also extend to many other sectors.

The expansion of AI marketing offers the potential for double-digit improvements in outcomes: 41 percent of marketers say that AI leads to higher revenue generation from email campaigns, as well as a 13 percent improvement in click-through rates.

 

Advantages and disadvantages of artificial intelligence marketing.

AI for marketing poses several key pros and cons. Before we go into the applications of artificial intelligence, let’s go through the advantages and disadvantages.

Advantages

Disadvantages

Increased ROI. 

AI can help you achieve higher returns on your investment by allowing you to extract valuable insights and act on them faster. For example, AI tools might alert you in real-time to a new social media marketing opportunity associated with a trending hashtag. By acting fast, you can obtain better results with a lower investment of resources.

Data problems.

No matter the industry or domain, it’s critical to identify any problems associated with the data that powers AI tools. For instance, you may not have enough data for AI tools to produce meaningful insights for marketing campaigns. Or your data may be incomplete or inconsistent; for example, you may have rich data for some prospects but minimal data for others. Likewise, your data may contain duplicate entries or missing information. If so, your AI tools will analyze erroneous data.

More precise measurement. 

AI helps marketers understand which campaigns and marketing tactics are most effective right now, so they can immediately replicate those tactics across different campaigns or channels. For instance, you may discover from AI tools that a marketing hook you use in your email campaigns generates a high volume of leads. You’ll know you should expand that hook into social media campaigns.

Privacy concerns.

When you rely heavily on data collection and analysis to guide marketing, you must remain compliant with laws like the GDPR, which impose certain rules regarding how data associated with individuals is stored, processed, and managed. In some cases, efforts to comply with those laws can hamper your ability to use AI tools. For example, suppose you must store data locally to avoid storing it in the cloud, where it may be more difficult to maintain the privacy protections required by the GDPR. In that case, it will also be more difficult for cloud-based AI tools to ingest that data.

Better customer experience.

According to an Oracle report, 34 percent of marketing leaders believe AI will lead to the biggest improvement in customer experience because it enables hyper-personalized content. Customer satisfaction rates increase by 36 percent when marketers personalize content.

Lack of budget or buy-in.

Artificial intelligence marketing solutions require specialized software (and in some cases, hardware) which is expensive to acquire, deploy, and maintain. This is often a substantial obstacle for small marketing budgets. You might also face difficulties obtaining buy-in from stakeholders responsible for approving and managing AI marketing solutions.

Faster, more effective business decisions.

With the help of AI, marketers don't have to wait until the “end” of a campaign to make decisions or depend on quarterly reviews to shape the next phase of their marketing strategies. Real-time analytics means they can make the right decision right now. In short, artificial intelligence puts marketers in a position to make informed and cost-effective decisions faster.

Lack of talent.

Companies need skilled, trained employees to correctly deploy, manage, and interpret AI marketing results. You'll likely need someone with a data science background to take this on, and your whole marketing team must take the time to learn to use the tools effectively.

A typical marketing organization that sees the value of AI-powered solutions can meet all these challenges. Nonetheless, it’s important to be aware of the roadblocks you may face in deploying AI marketing tools, as well as the challenges associated with managing them over the long term.

 

 

How to get started with artificial intelligence marketing.

 Every marketing organization is different, but there are common steps all marketers can take to ensure the effectiveness of an AI-powered strategy.

1. Set goals and KPIs.

First, identify what you hope to get out of AI marketing. Define metrics and KPIs that you will measure to assess your AI-powered strategy's effectiveness. For example, you might set a goal of increasing conversion rates by a certain percentage over the next quarter or reducing your marketing costs by a certain amount in the same timeframe. 

2. Set data privacy standards.

Create a data privacy strategy for your AI operations from the start. The best way to do this is to program data privacy rules into your AI solutions themselves. For example, you can ensure that the AI tools anonymize personal data received, and that data is stored by default in ways that implement the access controls, encryption, and other privacy protections required by regulatory frameworks.

3. Establish data sources.

Artificial intelligence tools require a tremendous amount of data to deliver accurate, meaningful insights. That data can come from various sources, such as your CRM system, automated marketing tools, email delivery platform, automated workflow system, website logs, and metrics generated by social media channels. You can also collect data about the geographic location of prospects and how different buyer personas correlate with buying patterns.

In addition to determining where you’ll obtain data, be sure to address data quality risks. Verify that your data sources can provide error-free data consistently. In addition, coordinate with other data management teams within your organization, such as sales, to establish data quality standards that govern how data is created and stored.

4. Hire and upskill.

Expect to invest some time and effort in learning how to make the most of your AI systems. If you can’t acquire the necessary talent in-house, prepare to hire outside talent to do the job. Plan how to retain the required team and avoid situations where only one employee has the essential knowledge to work with AI tools. 

5. Select an AI platform.

Choosing the AI tools to power your marketing operations is one of the most difficult but important steps in getting started with AI in marketing. When evaluating tools, consider your main marketing goals and whether the tools excel in addressing those goals. 

Common AI Marketing goals include:

  • Increase the speed of marketing operations
  • Reduce costs of marketing operations
  • Drive higher conversion rates
  • Improve lead qualification

 Some AI tools are better aligned with certain goals than others.

Also, consider the gaps you hope to fill with the AI tools. Are you hoping to achieve greater visibility into the performance of marketing initiatives, or is your goal to streamline the hand-off of leads from marketing to your sales team?

A third feature to evaluate is the AI tool’s openness. Do you want a system with an open-source algorithm that provides visibility into how the tool makes analytical decisions? Or are you concerned only with the results?

 

7 examples of AI marketing

There are various ways to go about integrating AI tools into your digital marketing campaigns. Here are seven common examples:

1. Personalized user experiences.

Artificial intelligence enables marketers to tailor the content that each website visitor sees. A common example is product recommendations based on a user’s browsing history. A more advanced application might use AI to configure your website’s navigation to ensure visitors can find and view the most relevant content.

2. Content creation.

Artificial intelligence tools can help automate many types of content creation, such as automatic posts on social media when your company announces a new product. 

AI tools could also help you craft responses to prospect emails or social media messages based on the content of the queries that prospects send. The American Marketing Association tested artificial intelligence by integrating it with their email newsletter. They collaborated with rasa.io to personalize thousands of subject lines based on member data. This helped drive subscription rates by 42 percent, which is a massive uplift to be proud of.  

3. Chatbots.

Chatbots, which use AI to conduct real-time conversations with users, offer a great way to personalize the customer experience and ensure that customers get fast answers to common questions without calling customer support. Chatbots can help guide customers’ purchasing decisions by making personalized recommendations or responding to common sales objections associated with a product. 

Sephora has harnessed this already with their AI chatbots from as early as 2017. It can be hard to find what you’re looking for with a wide variety of cosmetic choices. Sephora’s chatbot started with a simple quiz to help users find the product they were looking for. It has seen so much engagement that they have rolled it out across other messenger platforms.  

4. Email content curation. 

Creating the content for email campaigns can be very time-consuming, especially if there are multiple versions of your emails, each one tailored to a different buyer persona. AI can help with this process by automatically generating email text and suggesting images and layouts for marketing emails. What’s more, AI tools can analyze the results of past marketing emails to assess which language, images, and design work best for different target audiences. 

Financial services brand Genworth used Marketo Engage to connect with customers in a way that was more personal than the traditional “batch and blast approach” – and achieved 98% email deliverability. eBay has been using Phrasee to help with its email marketing copy since 2016. With a brand of this size creating millions of personalized emails for certain subscribers, using an AI tool to automate the process has improved the uplift by 16 percent and an average of 31 percent click rate.  

5. Dynamic pricing. 

Not only can AI help take the guesswork out of determining what to charge for products or services, but it can also adjust prices in real-time. Based on competitive data and customer interest in a product, AI tools can ensure that you never charge more than your competitors and that your prices align effectively with customer demand. For example, you can lower prices if demand declines to encourage more business. 

6. Predictive analytics. 

AI excels at assessing large volumes of data to recognize trends that you would otherwise not be able to identify ahead of time. Instead of making an educated guess about how your customers’ priorities will evolve, AI tools provide automated, systematic insights based on predictive analytics. 

7. Customer insights. 

Determining what your customers want can be difficult. Many marketers rely on surveys or manual, after-the-fact assessments of purchasing trends to gain insights. Artificial intelligence takes a systematic approach by analyzing various data sources to understand customer behavior. And it does it in real-time so marketers can respond immediately.

 

What's next for artificial intelligence marketing?

Marketers should expect to see increased use of advanced AI solutions, such as chatbots, which create a more positive experience for 90 percent of millennial-aged customers. And AI-powered content marketing is also on the rise, as marketers turn to AI tools to help identify the best keywords for marketing content and customize content for different types of buyers.

By providing greater clarity into buyer behavior and marketing performance, AI allows marketers to make more informed decisions in real-time. Ultimately, it leads to better marketing results at a lower cost.

Marketo Engage can help fill some of the most critical gaps in your AI marketing strategy. By collecting data from across multiple marketing channels and assisting the marketers in tailoring operations to different target audiences, Marketo Engage ensures you have the information you need to integrate AI effectively into marketing, no matter which approach you take or which AI tools you choose. 

 

Frequently asked questions about AI Marketing.

How is AI used in marketing?

AI tools are designed to simplify customer experiences and make marketing tasks more efficient. They might automate certain elements of marketing, such as chatbot conversations, or analyze customer data or economic trends to inform decision-making. AI generally works to enhance traditional marketing activities, rather than replace them.

Is artificial intelligence the future of marketing?

AI can help make many marketing jobs easier. Personalized content, customer journeys, simple content creation and audience segmentation can all be completed through AI tools. However, much of marketing relies on creating a human connection with audiences – something that AI tools can’t achieve.  

Will AI impact marketing jobs?

While AI tools are a great addition to your marketing technology stack, there is no need to worry about it taking jobs away from people. It has no emotional intelligence or true natural language processing and so cannot ultimately take over your workforce. AI can help change your company, and some things may become automated, but there will always be a human need to check results and metrics. 

Keep an eye out for more info about Marketo Engage’s newest AI-enabled feature, Predictive Audiences, coming out in June. In the meantime, learn more from these customer use cases — then be sure to check out the Marketo Engage Experience Platform Data Science Workspace to unleash insights from your data better, and unlock incredible experiences for your customers.

 

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