How artificial intelligence is influencing marketing in the 21st century
Algorithms and the use of artificial intelligence are no longer visions of the future. They have long been trending topics in many areas of the economy, such as autonomous driving of cars and the healthcare sector. In particular, they try to guarantee higher quality and reliability of the services offered. However, this development can no longer only be observed in technical areas; artificial intelligence is also becoming increasingly important in sales and marketing.
The basis for all these developments is the fact that it is now possible to store and systematically process a very large amount of data. These big data analyses and the ability to draw more and more information from the data using “machine learning” - the systematic learning of algorithms - make it possible to implement marketing strategies that are specific to the target group and are as efficient as possible. Data storage has increased explosively in recent years and is now automated and has become an almost everyday part of online marketing, but due to a lack of software, it is not yet being used efficiently everywhere. With every new customer and user of a website, an algorithm learns new patterns of action and can understand as precisely as possible how customers behave. This knowledge, in turn, can be used to apply marketing measures as efficiently and personally as possible.
The benefits of artificial intelligence that result from this:
- The rapid identification of trends and patterns of action
- The ability to monitor changes at the moment
- Understanding and influencing the customer journey
- to implement efficient and cost-effective marketing strategies
- The time saved to spend on creative ideas
- Work out an advantage over competitors
Algorithms can currently be used primarily in three areas of marketing: In the area of product, price and promotion. By analyzing volumes of data, products and services can be adapted to the needs of customers and recommended in a targeted manner. The price of the product can also be calculated dynamically, depending on supply and demand. Companies that already use this include Amazon, flight comparison sites and the taxi platform Uber. Here, a daily price for the trip you are looking for is calculated based on available drivers, current demand and traffic conditions. In addition, products can be targeted at potential customers through individualized recommendations and promoted as effectively as possible. This is particularly the case with online shops and streaming services such as Netflix and Co. Here, the films and series presented are selected based on previous usage and individually suggested to each viewer. This type of ranking is also used on social media such as Facebook and Instagram, where the published posts in the news feed are ordered and displayed based on the user's calculated and revealed interests.
Potential customers can be confronted with products on all of these platforms. By monitoring all imaginable points of contact, such as social media, the website and online banners on websites outside the company, it is possible to determine which touchpoints lead most quickly to a purchase intent. Based on these observations, the Otto Group, for example, creates its marketing strategy individually for its customers.
All these examples show that using artificial intelligence and the targeted use of algorithms, marketing measures can be used as time and cost efficiently as possible in order to adapt strategies even more individually to customers in the future. It remains exciting what the future brings in the area of artificial intelligence.