Why do modern marketers need Artificial Intelligence, anyway?

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By Gregory Ellevsen, Chief Marketing Officer, IBM Middle East and Africa

The long-foreshadowed future is here, and there’s no longer any excuse to lag behind. Whether you’re marketing in the Middle East, the UK, the US or Asia, you’re now in the business of digital marketing.

Since the earliest days of the internet, forward-thinking marketers have seen this day coming. And many not only faced up to the challenge, they’ve seized the opportunity to fundamentally transform the very nature of marketing.

Globally, digital advertising now accounts for 40 per cent of advertising spending, outpacing any other spending category, including stalwart media such as TV.

Newspaper advertising – once a third of all advertising budgets – has shrunk to less than 10 per cent. And, while traditional forms of advertising still have a role to play, often that’s in support of digital marketing campaigns.

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Demystifying markets

Now, Artificial Intelligence (AI), and the new era of “cognitive business” are enabling another quantum leap forward in the science of marketing. Just as machine learning is rapidly transforming healthcare, retail, and financial services, so too is it now redefining markets and the profession of marketing.

AI is fueled by data. But not just the data we marketers have been accustomed to using – sales, market share, site visits, clicks, engagement rates and the like. AI can tap into – and make sense of – a vast swathe of “unstructured” data previously hidden from we humans.

In fact, this unstructured data is a marketer’s newest natural resource. Our success to date has been built on a bedrock of traditional data. But more than 80 percent of organizational data is “dark”… captured and stored in ways that traditional programmable computers cannot use.

Beyond the walls of our own organizations, there’s a further universe of external data – weather, traffic, social media sentiment – we can also tap to develop a deeper and more nuanced understanding of our customers and their purchase journeys.

As we accelerate into this data-driven future, our marketing effectiveness, and increasingly, our competitive advantage, will rely on the extent to which we can capture and leverage all the data available to us.

This is where AI can be of the most help. By creating a marketing AI, and providing it with access to all our data – traditional, “dark” and external – our learning machine can uncover compelling new insights about our customers and our markets.

Those insights enable us to engage our target audiences more directly, more quickly and with more individuality.

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True “Segments of One”

In the previous era of mass marketing, our core craft was to determine how best to group prospects into like segments, based on insights about their shared needs and characteristics.

AI helps us go beyond mere segmentation. It enables us to create highly-personalized communications, offers and brand experiences, all in real time. By constantly comparing the behaviors of new, unknown customers with those of known high-value customers, AI can immediately identify and help us engage with the most valuable new customers.

However, identifying new customers is just the beginning. By understanding emotions and life events, marketers can make better product or service recommendations based on individual personalities, needs, and values.

A simple example: A business traveler posts to her social networks her frustration about the airline losing her luggage. She asks for advice on where to buy business clothes so she can be ready for a meeting in just two hours’ time.

A retailer’s AI “agent” can immediately post a response providing a map with directions from her location to a nearby store.

And not only that. The AI agent can also recommend specific clothes based on past buying behavior, personality characteristics and its broader understanding of suitable local business attire.

The AI caps off its support with a limited time personal discount offer on particular clothing labels for which the store is carrying excess inventory.

 

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Beyond just talking about the weather

As any retailer will tell you, the weather can have a profound effect on customer behavior. Past, current, and forecasted weather all impact our purchase intentions. And current weather conditions have a huge influence on purchase behavior – even a slight increase or decrease in temperature can trigger, or stall, purchases.

Marketers can now use AI to leverage weather intelligence from The Weather Company in campaigns running on IBM’s cross-channel digital marketing automation platform. Beyond merely reacting to weather conditions, this enables marketers to anticipate and appropriately intersect ahead of time consumer consideration and decision-making.

Through AI, data, and automation, campaigns can now be optimized at the “Speed of Life”. In an always-on market where timing is everything, our goal should be to deliver the right message at the right time, to maximize the effectiveness of our marketing.

Knowing in advance when customers will be more likely to purchase, based on predictable reactions to local weather conditions, enables us to trigger campaigns and promotions at just the right time to generate the best results.

Beyond day-to-day promotions, AI can help us optimize the overall ROI of our marketing budgets, by uncovering the secrets of “deep seasonality” and store location “micro climates”.

Bridging online and offline

According to Invesp, “companies with omnichannel customer engagement strategies retain on average 89% of their customers”. And therein lies another key opportunity for marketers to leverage AI.

Customers today interact with brands through two main categories: online behaviors that include email opens, website visits, online purchases and social media interactions; and offline behaviors that include speaking with customer support on the phone, consuming traditional media, and purchasing in-store.

Omnichannel campaigns – campaigns that integrate all these different customer touches into a seamless brand experience – help marketers efficiently convert prospects into customers, and then develop them into brand loyalists.

Let’s look at a practical example of how this could work in a retail environment. A customer orders a dress from the website of a fashion retail brand for a special occasion. However, the dress arrives and unfortunately, it doesn’t quite fit.

The customer emails the retailer a request for a refund, and the retailer suggests that perhaps she might instead like to have the dress altered to fit in one of its bricks-and-mortar retail stores.

The customer loves this idea. The retailer SMSs a Q-Code to the customer’s mobile phone and, as a thank you, a discount offer on accessories that would suit that particular dress.

The customer presents her Q-Code at the alterations counter of her local store, which provides the local seamstress full details and authorization to perform the alteration. The customer leaves the store happy – and with a few additional accessories for her new dress.

A day after the special occasion, the retailer sends the customer a personalized email hoping that they enjoyed their special occasion, perhaps also offering a loyalty discount on any future purchase.

No marketing or customer support team could manage that kind of individualized and optimized customer engagement at volume or scale. However, AI can.

These kinds of AI capabilities can create a priceless competitive edge for any brand. With so much potential competitive advantage at stake, it’s unsurprising that the market for AI is projected to increase six-fold in the next 10 years.

 

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From new to norm

AI service agents, and other forms of experiential technologies such as virtual reality (VR) and augmented reality (AR) are advancing rapidly. Consumers will soon transcend being merely “comfortable” with these new experiences, and will start expecting the enhanced convenience and personalization they provide.

Incidentally, that’s happening right here, right now not just in the world’s most developed western markets. The United Arab Emirates for instance is rapidly embracing the digital shift in key industries such as healthcare, retail, and banking.

– Smart Dubai and the Department of Economic Development in Dubai’s Saad are using IBM’s cognitive computing capabilities to answer questions about licensing and registration of businesses in Dubai, simplifying service and handling enquiries efficiently.

– A major local bank in the UAE is using IBM Watson marketing solutions to finely segment its customer data and create personalized messages that appeal directly to real-world customer preferences. After building a new multi-wave campaign, the bank’s marketing team tests the messages on multiple different applications, platforms and devices — ensuring a consistent experience for every customer. They achieved better engagement rates for their email campaigns and increased their share of wallet among their customers.

More and more local businesses are joining the cognitive marketing era, seizing the first-mover advantage, and achieving improved returns on their marketing investments.

Developers as allies

Fortunately for us, many developers – the construction engineers of the digital domain – are evolving their skills to help us leverage AI and new models for digital customer engagement.

This new breed of next-gen digital developers are a “must have” for companies wishing to leverage new customer engagement technologies. Their precious skills are needed to understand and write interfaces for new kinds of integrating fields of computing that span mobile experiences, virtual reality, data analytics and AI.

But it’s not only the company IT department who needs these digital pioneers. In fact, to take full advantage of these new technologies, marketing departments should hire their own AI or cognitive developer, pairing them with a data scientist.

Together, this highly-skilled team can put an AI to work mining and combining traditional and dark data, yielding invaluable insights and advice for the marketing team.

Until recently, technology was seen as an enabler. Now it’s an advisor.

Leveraging AI, our products and e-commerce platforms can interact directly with our customers, advising them to make informed purchase decisions, and delighting them with a new level of truly personalized service.

The article appeared in the November 2017 issue of Gulf Marketing Review.

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