AI and Marketing

Over the last decade, I have noticed a complete transformation of the sense of marketing in organizations. Traditionally, we would try and understand the need of the customers and then craft a product or a service to capture the need, but today, we create needs in the minds of the customer. We attract, retain, and grow the customer-base. We may have completely ignored the Maslow’s hierarchy of needs completely. About a decade ago, a new branch of marketing became popular — Neuromarketing — which I got interested in, only to realize that it was a costly affair. To undertake a simple Neuro-Marketing based research of the subject, a single respondent, it would cost me close to INR 12,000 (Appx. $150), and for any research to be acceptable, I must have a minimum of 500 subjects. I dropped the idea and chose ‘Tragedy of the Commons’ as my research area instead. Today, however, things have completely changed in the space of digital transformation: companies such as Google, Amazon and Facebook have crafted multiple platforms, which understand what kind of a person you are just by observations. Should you share specific details of your customers (read segmentation), these companies can help you find similar prospective customers to help you grow your business. Amazon knows a bit more: not just what you are interested in but also what you buy (and how you buy).

Companies have effectively used chatbots to talk to you, inbound call analysis to understand your stress levels, dynamic pricing, marketing campaign automation, sales lead scoring, social media planning, buying and execution, marketing mix analysis, web analytics, product recommendations and media sentiments analysis among other activities. As marketers become more sophisticated in their use of marketing AI, many have opted for fully automated marketing decision platforms, taking humans out of the loop entirely. Today, over 50% of ad-spends happen online globally, and almost all of these use various proprietary algorithms to plan, schedule and execute the campaigns. Customer data management and analysis takes the major chunk of tech budget an organization operates with. CRM systems help is retaining and growing the customer base, with flow of data and information coming from inbound marketing platforms. My guess is that changing media consumption would increase the online share of the ad-spends steadily to around 75% by 2026, thus shifting the focus from mass media campaigns to direct marketing campaigns with extremely low wastage altogether. All this would be possible if the data is collected without any restrictions, as in China, which is less privacy-sensitive. This would also require highly specialized behavioural economists to help the marketers understand the economics of strategies. They would possibly be employed with FAANG, and marketers would just outsource the activity to them, skipping the middlemen altogether.