Artificial Intelligence in Marketing

Introduction to Artificial Intelligence

Artificial Intelligence (AI) is the division of computer science which focuses on creating computers and machines which are capable of performing tasks that require the intelligence of the human being. AI is concerned with simulating human characteristics into the machines through reasoning, learning from past activities, generalizing, discovering meanings and other forms of human emotions. In simple words, AI means making computers more like humans.

The desired goal of AI is to create machines that can replicate the cognitive functions of human beings such as learning and solving problems. AI assumes that human intelligence can easily be copied by machines to perform simple and complex tasks with higher risk to human life. For the computer to behave and act like a human, three components are necessary; computational system, data and data management and AI algorithms.

Brief History of Artificial Intelligence

AI is not the new concept, it has been around the world for a long period of time. The historical research and achievement have helped AI to be a hot topic in modern times. The term AI came into existence in the early 20th century. A movie called Metropolis,   released in 1927, featured an artificial robot as a character. In 1956, Dartmouth Conference  coined the term AI through workshops where different specialists shared ideas and views regarding this intelligence. John McCarthy first coined the term in 1956.

The next big step into AI was the creation of the first chatbot, ELIZA. ELIZA provided instruction to computers in the form of human language. The further step into the AI world was simulation of statistics in AI by IBM. The biggest jump in AI came in 1997 when IBM’s Deep Blue supercomputer defeated the world chess champion of that time.

Development in Artificial Intelligence

In the modern era, AI reached many of the milestones that changed the entire world. The start of AI evolution began in 2012 when AI learned to recognize the picture of a cat through calculation. It showed the concept of fake cerebrum. The biggest achievement of AI came in 2016, when AI defeated Go World champion. Finally, the major milestone of AI was in 2018, as there was the introduction of self-driving taxis.  

With years of development and research, AI is capable of different functions in the real world. All the personal and professional functions uses Artificial Intelligence. Similarly, all type analytics, production and prediction, assistance, learning, reasoning and perception. Financial service industry is using AI for identifying fraud payments through credit cards. Similarly, call centers use virtual customer assistance to interact with the inquiry of the customers. AI also assists cybersecurity by analyzing the data and identifying the patterns of cyber-attack. AI has influenced the online-shopping and advertising. Based upon the previous search purchase recommendations are provided to the people. AI is also capable of digital assistance to use smartphones, TV and other digital media. AI is now present in every technology from cars to medicine. In the pandemic time, AI was used for thermal imaging of the people and managing the COVID-19.

Artificial Intelligence in Marketing

Have you ever wondered how the website you are on is showing an advertisement  of the products/services that you just consider in your mind? If yes, then know how AI is used in marketing. In this world of technology and digitalization, AI has been used in the field of marketing as well. AI is used in marketing for different purposes like for data collection, insights of the customers, predict the move of the customers and make automated decisions that influence the different aspects of marketing. Through the use of AI, marketers can identify the behaviors of the consumers and make target strategies to gain more market share. Digital marketing is directly and heavily influenced by artificial intelligence. AI also improves the efficiency and effectiveness of different marketing functions. Basically, the AI is used in marketing for following reasons

  • Artificial Intelligence in marketing can assist while targeting the customers
    • Personalized emails, niche advertisement suggestions,
  • Artificial Intelligence can assist in all type of forecasting and analysis of sales
  • Automated decision making in marketing function is a part of AI
    • AI-powered Chatbots, Niche marketing strategies and suggestions
  • Real time personalization is possible only due to Artificial Intelligence
    • Push Notification, Personalized messages, Frequent Suggestions
  • Artificial Intelligence assists in content creation by making analysis and prediction accurate.
    • Report and summaries, real time stature, possible strategies, chatbots
  • Artificial Intelligence improves sales and advertising efforts , saves time and costs
    • Google controls 40.7% of US digital ad revenues

Pros and Cons of Artificial Intelligence in Marketing

Artificial Intelligence (AI) has made our day to day experience effortless. Our service providers know what we need before we know through aggressive crunching of our past activities. We consider one aspect of our needs, AI just provides us with the possible things that can go together with our needs.  Our thought process is highly affected by the work of Artificial Intelligence. Considering this, the use of AI has its own pros and cons i.e. benefits and drawbacks. Some of the pros and cons of AI in marketing are

Pros of AI

  • AI can assist in predictive analysis based upon the data collected. We can recommend certain specific products and services to the customer by understating the user preferences and behavior. AI helps to understand this preference and behaviors.
  • AI improves the marketing efforts. Through analysis of data, one can evaluate different market segments and select the best to serve the potential and beneficial customers. The marketing efforts will be on the right track without wasting time and resources.
  • AI makes retention of customers effortless by providing customers the best service experience and also, AI assists in finding out the potential customers and provides strategies to attract them to use the services.
  • Artificial Intelligence can assist in customer mapping which allows businesses to target the right marketing campaign to the right customer at the right time.

Cons of AI

  • Customers can prefer to interact with human beings rather than chatbots. Older generations can find it difficult to interact and communicate with AI based systems.
  • In the world of marketing, AI cannot function alone without human support. AI alone cannot get meaningful out of data, it requires human evaluation, analysis and interpretation.
  • Data privacy is a major concern of any IT based support system. AI requires quality and personal data to provide quality and personalized information.

The basic input for any type of Artificial Intelligence is data. Businesses collect and store huge amounts of information in the form of data which marketers use for marketing functions. The term ‘big data’ means the large volume of data. Human capacity and competencies cannot analyze big data in simpler way.

Business houses collect large volumes of data from various sources like subscriptions, cookies, marketing campaigns, advertising impressions etc. from customers. Such data are managed and analzed  systematically for formulating marketing and other business strategies. AI also helps to maintain balance between automation and humanization. AI can provide personalized content to a larger audience by analyzing the complex pattern. Expectation, taste, preference and demand of certain products can change quickly and  AI can identify the trends in the market through proper analysis of the big data. For accurate targeting of the marketing campaign. Machine learning can play a lead role in ad placement. 

Examples of AI in marketing

  • Google voice: Google introduced a technology which was able to recognize the questions through human voice and showcase the results. Now, almost every gadgets and appliances are voice enable.
  • Amazon: Amazon Inc. is pioneering the e-commerce business when it comes to personalized shopping experience. Amazon uses AI for personalized shopping recommendations to drive dynamic pricing. Also, Amazon stores are powered with AI sensors and cameras.
  • Alibaba: This Chinese retailer opened the first “Fashion AI” stores, automatized customer service and personalized recommendation with the help of AI. 
  • Airbnb price algorithm: They introduced pricing in real time. The pricing is based upon the location and other features along with price comparison of different rooms in real time. Also, Airbnb uses AI to assess guests’ worthiness.
  • Starbucks and predictive analysis: Starbucks collects and analyzes the customer data to make predictive analysis. With collected data, personalized messages are sent to the customers, to enhance their Starbucks experience.


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