In this guest post, Edge Melbourne’s managing director, Dan King, takes a look at 2017’s buzzword, Artificial Intelligence (AI), and, he says, it’s set to radically change advertising and marketing as we know it…
Artificial Intelligence isn’t a new phenomenon in the marketer’s toolbox. We’ve been hearing about AI and its offshoots machine learning, robots and automation interminably over the last few years (think IBM’s Watson). But while these words are now cemented in the ad industry’s vernacular, it’s only the big tech companies that have been ploughing money in to AI innovation… so far.
To some, the mention of Artificial Intelligence might trigger thoughts of human-like robots that can read facial expressions and respond to them, or the use of autonomous drones run by AI software in warfare. But for marketers it opens different opportunities.
To take the Oxford Dictionary’s definition, AI is “the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.”
From an agency and brand perspective, that means AI has the potential to radically change marketing, advertising and branding, giving us the opportunity to reach customers at any point in their journey, and to send out the appropriate message to capture them on the fly.
Where are we now?
A study by Weber Shandwick found that 68 per cent of CMOs report their company is “planning for business in the AI era” with 55 per cent of CMOs expecting AI to have a “greater impact on marketing and communications than social media ever had.”
While the majority of companies are in the planning phase, it’ll come as no surprise that the tech behemoths including Amazon, Netflix, Spotify and Google are leading the charge in AI as they look to create more informed, meaningful relationships with their consumers.
In the case of Amazon, Netflix and Spotify, the trio leverage user behaviours to curate recommendations that keep their customers engaged, consuming and continuing to subscribe. According to the American Marketing Association, about a third of Amazon’s business comes from recommended purchases, a machine learning-powered function that analyses what users have bought in the past, what items are in their virtual shopping cart, which items they’ve rated and liked, and what other customers have viewed and purchased.
Similarly, Spotify utilises AI and machine learning to deliver its ‘Discover Weekly’ service, which is a personalised play list of music the company predicts you haven’t heard before. To do this, Spotify taps into the behaviour of each user, including musical tastes, listening habits, what features they use and which artists they follow to create the list.
Netflix meanwhile uses the billions of data sets collected from its 75 million subscribers worldwide to suggest movies and TV shows based on previous viewing behaviour. It distinguishes between family members, and the more content you view, the better the recommendations you receive.
For brands whose businesses aren’t solely data driven, the opportunity that AI presents is the ability to find small groups of like-minded people or ‘micro-segments’. These micro-segments combine elements of a person’s profile and their behaviour — allowing marketers to leverage audience information to better target, understand and connect with customers and deliver the message that resonates the most.
Content is another space utilising AI to serve up articles and blogs based on customer browsing and reading habits. Online media owners are turning to content management systems such as Sitecore that delivers targeted, relevant content to website visitors. This might be news services offering up personalised homepages, or personalised areas in a mobile or tablet app based on browsing data. The more relevant content a customer receives, the more likely they are return.
From a customer perspective, the data points we create aren’t just the posts we upload to Instagram, or the restaurants we check in to on Facebook: every interaction on our smartphones is trackable. As consumers we have the right to release data for more contextually relevant opportunities to engage with brands or the right to protect ourselves from public video surveillance and advances in optical recognition should we wish.
What does the future hold?
At Edge, we are consumer obsessed. We want to make sure the brands we work with know everything about how, why and when their consumers behave, to make sure they are relevant, relentlessly.
To achieve this vision around consumer obsession, Edge is looking at how we can leverage AI to creative an objectives based outcome. Take for example the insurance sector, an area that Edge is particularly interested in. As a consumer, if you were checking in to the gym four, five times a week wouldn’t you want a cheaper health insurance premium as a reward? AIA Vitality is one insurer tapping in to consumer data through a Points scheme that rewards you for going to the gym or for a health screening. Vitality has partnered with a number of gyms such as Anytime Fitness and Fitness First, and awards customers points each time they visit the gym. Points can then be redeemed against shopping and cinema tickets as well as discount on insurance premiums.
Rather than churning out an annual premium renewal with no customer interaction, Vitality understands how their customers are behaving and can target them contextually. This concept could solve a very real challenge marketers have: catching the customer in the journey cycle. So, not just having them interact with you when they choose, but knowing what they need, when and where.
There have never been as many opportunities for truly data-driven marketing as we are seeing today, and marketers have barely scratched the surface. AI allows brands to use data already at their disposal to measure in real time, learn more about the customer and most importantly as we move forward in to 2018, anticipate what happens next in their journey to deliver, relevant, personalised messages that ensure the brands we work with stay ahead of the curve.
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