Have you ever wondered why you can see an ad for a product you’ve been considering buying on your feeds? It’s due to AI. By analyzing vast amounts of data, AI can predict your possible interest and suggest relevant ads. This AI impact on marketing is transforming the way we interact with customers.
But it’s not the only one. AI is reshaping various marketing aspects, from content generation to strategies.
So today, Designveloper will discuss AI’s use cases in marketing. We also elaborate on how AI can affect your marketing efforts positively and negatively. Keep reading!
Understanding AI in Marketing
First, we’ll look at the definition, popular use cases, and future of AI in marketing.
What is AI in Marketing?
Artificial Intelligence in marketing is the application of AI capabilities (e.g., machine learning, natural language processing, and data analytics) to automate and streamline marketing functions.
By analyzing data (e.g., demographics or purchase history), AI algorithms can help marketing teams understand customer behavior, make insightful decisions, and tailor experiences for each customer.
For example, AI systems can sift through your social media activities (e.g., past purchases, likes, or mentions) to recommend products you might like.
5 Popular Use Cases for AI in Marketing
AI’s enormous impacts make it sought-after in every aspect of marketing. Here are its popular applications in this realm:
Marketing Strategy Development
Salesforce indicated that the adoption of AI systems can support 53% of marketers in building and optimizing SEO strategies.
Indeed, these intelligent models can process customer data from different sources like customer relationship management (CRM) platforms or social media to detect patterns.
This allows you to interpret customer behavior at a granular level, including their interests, buying habits, and even sentiment towards a product or your business.
With these valuable insights, your marketing teams may build highly custom marketing campaigns that fit each customer’s unique preferences and needs. This contributes to higher retention and customer loyalty.
Customer Service Chatbots
One 2022 Tidio survey found that only a quarter of businesses use AI-powered chatbots for customer support. However, 74% of them feel satisfied with how these assistants help achieve their business goals.
Their ability to resolve a customer’s issues is the top motivation for adopting chatbots. Accordingly, these virtual assistants can handle returns & cancellations (58%), orders & purchases (52%), account information (43%), and more.
Besides, AI-powered chatbots impact marketing efforts by engaging with website or app visitors 24/7, collecting their contact information, and turning potential leads into customers. By automating these marketing and sales tasks, they can free up human resources for more complex tasks. This helps reduce costs, increase ROI, boost employee satisfaction, and improve overall efficiency.
Email Marketing
Despite being a traditional channel, emails are still a preferred marketing tool. With the integration of AI in email marketing platforms, its global marketing has been gradually expanding to the projected value of almost USD 82 billion by 2034.
So how does AI power email marketing? Through customer data analytics, AI algorithms can segment customers into different groups based on their demographics, interests, and past activities. This allows you to develop targeted campaigns for each group and automatically send emails at the best time, hence increasing engagement and conversion rates.
Further, AI can generate email newsletters, marketing messages, and more, from designing and writing first drafts to optimizing email content tailored to a certain audience.
AI also helps you create reports to gain meaningful insights into the performance of email campaigns. These insights prove helpful in bettering your future campaigns and enhancing their effectiveness.
Content Creation & Optimization
AI is transforming content marketing. One 2024 survey by SiegeMedia and Myth indicated that most businesses (71%) leverage AI tools to create content ideas that align with their target audience, for example, brainstorming relevant keywords.
In addition, AI algorithms can support content development (e.g., building outlines), content drafting, and editing, whether long articles, product descriptions, or social media posts.
By identifying the best keywords to use, optimizing meta tags, and suggesting the optimal content length to enhance SEO, AI can optimize your content for maximum visibility and reach.
Further, you even use AI to generate design ideas or design elements. They can suggest design layouts, typography, and images tailored for your business. Some applications like Taskade or Exactly.ai can analyze your business’s style, color palette, and other elements to build cohesive and unique visuals.
Ad Targeting & Optimization
When it comes to AI impact on marketing, we can’t ignore its potential benefits to effective advertisement. One study found that 47% of marketing professionals from four countries trust AI for ad targeting.
Indeed, software such as Skai or Wordstream can analyze user information (e.g., demographics or preferences) to identify the most relevant ads for each user group. This ensures that the ads are delivered to the right audience, thereby increasing their effectiveness.
Plus, AI can identify the best locations and times to showcase ads. This will optimize ad placement and improve the likelihood of your ads being seen, read, and clicked on.
Also, AI can manage and report the performance of ads instantly across channels. Accordingly, you can modify placements or bids to maximize the turn on each ad spend.
Current State and Future Trends of AI in Marketing
With the wide adoption of AI in marketing, it’s no surprise that its global market is witnessing a considerable growth of 25.6% from 2023 to 2032.
Looking ahead, we can’t overlook crucial trends that are set to impact the future of AI in marketing:
Conversational AI Powered by LLMs
This is a type of intelligence that mimics human communications, typically voice assistants and chatbots. It uses advanced techs like natural language processing (NLP) to understand and interact with your customers in a human-like manner.
However, conversational AI is not likely to learn from experience like humans. Instead, it’s trained on hundreds or thousands of case studies and examples to understand customer queries and problems. To do so, there’s a need for Large Language Models (LLMs) to power conversational tools to deliver better customer experiences.
Voice-Search Optimization
43% of buyers leverage voice assistants for shopping, according to Narvar. Noticeably, 51% of them use voice commands to learn about products, whereas 22% make direct purchases and 17% make reorders.
With the growing popularity of voice assistants and LLMs, optimizing voice searches for shopping commands is a crucial part of your marketing strategies. This helps your marketing teams deliver the best value to customers and navigate them down the sales pipeline.
Besides, 72% of users also utilize voice searches to look for local content. So, to reach local customers more effectively, your marketing teams should optimize website content and paid search campaigns for localized keywords.
Zero-Click Searches
A zero-click search occurs when search engines like Google return an answer to your question without leading you to click the link.
The integration of AI helps these engines create more concise answers to your queries. This allows customers to find the answers immediately without reading a whole article. But these zero-click searches can reduce your website traffic and affect your marketing efforts.
Today, Google added more AI-powered features (e.g., local packs or knowledge panels) to support “zero-click” searches. This requires your marketing teams to modify strategies to avoid the negative impacts of these AI functions in marketing. Accordingly, you either focus on content that ranks well for featured snippets or avoid topics easily answered by these snippets (like definitions).
Formalized AI Ethics
When AI becomes an integral part of marketing, there’s a rising need for enacting regulations and ethical standards around AI usage.
This can involve ensuring data privacy and security, avoiding algorithm biases, obeying copyright standards, or being transparent in using AI and its outcomes. This will keep your teams away from AI’s negative or unforeseen impacts on marketing efforts.
How can AI Impact on Marketing?
Having understood the popular applications and trends of AI in marketing, we now discover AI impacts on marketing in both good and bad terms.
5 Positive Impacts
AI has transformed some marketing functions and efforts more positively. Here are the top five advantages AI models can bring to your marketing teams:
Enhanced Customer Experience
Marketers are responsible for engaging customers across channels and improving customer experiences. Today, with the introduction of AI tools, especially GenAI, marketers can achieve that goal by tailoring customer interactions.
Indeed, up to 70% of customers believed that AI software can have a positive impact on their customer experience. AI can analyze data to understand a customer’s interests and behaviors. Accordingly, AI helps your marketing teams to suggest products or services tailored to that customer, send targeted marketing messages, and provide customer support 24/7.
Some brands like KFC also integrate AI-powered tech for facial recognition. It predicts what you want to order and recommends different menu items suitable for your estimated age and mood. This expedites the ordering system and provides highly customized experiences.
Data-Driven Decision Making
According to IBM, 43% of CEOs leverage GenAI tools to make informed, strategic decisions, while 30% focus on operational decisions.
Indeed, AI has a profound impact on making important decisions, especially in marketing. You can use AI-powered tools to sift through data from various sources (e.g., CRMs) and extract interactive insights. These insights can be the performance of previous campaigns, customer behavior trends, or the effectiveness of marketing channels.
Accordingly, you can predict a customer’s future activities, integrate these insights into marketing strategies, and tailor campaigns for maximum reach and conversion. This data-driven approach also enables you to optimize marketing budgets, target the right customer segment, and boost ROI.
Increased Efficiency & Productivity
Most business owners (64%) expected AI to enhance customer relationships and employee productivity. Meanwhile, 60% thought AI could increase sales.
Here’s how: AI can automate many routine marketing tasks. For example, AI-powered chatbots can respond to a customer’s inquiries immediately regardless of time zone. Meanwhile, AI software can automatically tailor marketing campaigns, social media posts, emails, and more to the right audience. Besides, marketing tools now incorporate GenAI to create content and images.
This will leave marketing teams more time to focus on complex, strategic endeavors. Further, AI can process vast amounts of data with high speed and accuracy. Thus, it can avoid human errors and save costs.
Improved ROI & Campaign Performance
With all that we analyzed above, it’s no surprise that how AI can improve the ROI and performance of marketing campaigns. So how does AI impact on marketing ROI?
It can optimize your omnichannel campaigns in real time by modifying factors like bid price, ad placement, and audience targeting based on how previous campaigns performed. This helps you take full advantage of each marketing spend. AI also analyzes the success of different marketing strategies, hence supporting you in adjusting upcoming ones for higher ROI.
According to IDC, every USD 1 invested in AI can generate an average return of USD 3.5. Besides, the average time to gain a return on AI investments is about 14 months of deployment.
Gaining a Competitive Edge
87% of organizations are leveraging AI to stay competitive over those not using AI tools.
By making your marketing strategies more effective, AI can help you understand customers better, make data-backed decisions, optimize marketing campaigns, and boost efficiency.
As AI and automation continue to evolve, your marketing team can find more ways to advance marketing efforts.
5 Negative Impacts
Although AI has brought immense benefits, we can’t ignore its negative impacts on marketing. Understanding these cons can give you good preparation when using AI. Here are five AI-caused drawbacks you may encounter:
Job Displacement
AI can create new job opportunities in such areas as AI development and maintenance. However, the transition to an AI-driven culture could be challenging for those currently in potentially automated jobs. These roles can have repetitive tasks, like customer service or even telemarketing.
Further, the fear of job displacement can lead to hinder the adoption of AI in marketing. So, your business must manage this transition carefully, offering sufficient training and support to help employees upskill and adapt to the AI landscape.
Over-reliance on Automation
Most businesses (43%) feel worried about over-dependence on AI and automation. Despite its efficiency, we can’t deny leaving everything to AI could lead to neglect of empathy and creativity.
Apart from engaging customers and increasing sales, marketing is also about building emotional connections. Meanwhile, over-automated marketing processes could lead to impersonal campaigns that fail to attract customers.
Further, AI also lacks the human ability to interpret all aspects of a context, understand nuances, or think creatively. This can make your marketing strategies technically effective but lack the depth or richness of human-made ones.
Privacy Concerns
AI collects and analyzes massive amounts of data to handle customer queries. But this also raises a big concern among customers and even senior executives (57%) about data security and privacy.
While customers don’t know how their data is used and feel worried about that, businesses are concerned about how AI systems are secured against cyberattacks. Besides, data misuse or privacy violations can lead to your company’s reputation damage, financial losses, or even legal issues.
So, your business needs to ensure transparency in AI use among employees, obey data protection or AI-related regulations, and establish ethical standards.
Bias in AI Algorithms
AI models learn from the training data. This means they can inherit any bias present in the data. Your marketing teams can face biased outcomes (e.g., unfair pricing strategies or discriminatory ad targeting).
Besides, bias in AI algorithms can impact the diversity of your marketing strategies. For instance, if your AI model is trained on data from a certain demographic group, it may produce insights that only favor that group. This could lead to biased strategies and eliminate opportunities to approach a wider audience.
So, ensure the training database is of high quality and check outcomes before integrating them into strategies.
Tech Reliability
Not all AI-powered marketing tools are perfect. They’re dependent on tech infrastructure. So they can be vulnerable to system failures, limitations, or technical glitches.
This could disrupt marketing operations, lead to missed opportunities, and potentially impact your company’s reputation. Moreover, if the AI tool is used for customer service, such as in the form of a chatbot, a system failure could lead to poor customer experiences and dissatisfaction.
Thus, your business should set up governance frameworks and implement regular management to ensure the reliable performance of AI tools.
Conclusion
Throughout this article, we discovered the popular use cases and future trends of AI-powered tools. Also, we answered the question “How can AI impact on marketing?” As AI advances, it’ll exert more impacts on your marketing efforts. So, follow our blog to update new information about AI.
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