10 things marketers need to know about AI

AI-enabled marketing isn't just about cute chatbots. Here's what CMOs, CIOs and others need to know to make the most of AI in their marketing initiatives in 2017 and beyond.

For years, marketing was considered more art than science. But more recently, as marketing automation software has proliferated, marketers have had to blend the art of storytelling with the science of data. Lots and lots of data.

Then along comes artificial intelligence (AI) and machine learning, which promise to help marketers make sense of all that data. Some experts believe AI's impact on marketing will be hugely significant, that it could even change the nature of marketing entirely — enabling brands to break through the noise and deliver a more personalized experience to customers.

Not surprisingly, though, there are challenges ahead for organizations seeking to add AI to their marketing technology stack. Here are 10 things CMOs, CIOs and others should know about AI and marketing in 2017, and the years ahead.

1. AI in marketing must deliver highly personalized and relevant messages

Today's consumers want highly personalized content. Case in point: A late 2015 VentureBeat study found that 77.5 percent of digital natives — Gen Y and Gen Z consumers — want marketers to give them "a truly personalized experience, both on your website and within messages."

"Customers are demanding personalized experiences from brands, but the number of channels through which these interactions take place and the sheer volume of touchpoints are growing," says Chandar Pattabhiram, CMO at Marketo, a marketing automation software provider. "In order to continue to engage customers effectively as the volume of touchpoints grow, marketers will lean more heavily on AI and machine learning to help make sense of all this data at their disposal. The ultimate result, if this is done effectively, will lead to a new level of personalized marketing with interactions tailored to the exact wants and needs of the individuals that brands are trying to reach."

2. AI will help eliminate 'marketing waste'

There's a lot of noise out there. From websites, blogs and videos to text messages, social media and TV ads -- you name it. Alas, the days of big marketing campaigns for the masses are over.

Broad marketing campaigns are expensive, ineffective and create a lot of 'waste,' notes John Marshall, chief strategy and innovation officer for Lippincott, a global creative consultancy.

Digital marketing technologies over the past few years have reduced some — but not nearly all — of those wasted marketing efforts, Marshall explains.

"What takes waste out of the system is a deeper understanding of who the human is on the other end of the marketing pitch, and what that person wants," he says." AI will accelerate that level of insight, so that waste is dramatically reduced from the marketing mix."

3. Chatbots and virtual assistants -- ‘the face’ of AI marketing

When it comes to consumer-facing AI that brands can use for marketing purposes, chatbots and virtual assistants like Siri are getting most of the attention — both from consumers and marketers.

"Bots generate a lot of excitement because they're very science-fiction-like, and virtual assistants attract attention because of their human interactions," says Ed See, a principal with Deloitte Digital's Digital Marketing and Customer Analytics group.

They're generating a fair amount of spending, as well. In 2017, marketers will collectively spend more than $250 million on these types of virtual agents and other "conversational technologies," according to a November 2016 Gartner report.

Gartner also predicts that mobile search queries performed via virtual assistants will grow from 20 percent to more than 50 percent by the end of 2017. Screenless devices such as Amazon's Echo will be in more than 10 million homes by year-end 2017 and "account for a growing share of commercial traffic," according to the report. And by 2020, Gartner projects that virtual agents will participate in most commercial interactions between people and businesses.

4. A glut of AI marketing technology, but integration lags

Aside from chatbots and virtual assistant platforms from Google, Facebook and others, AI-assisted marketing technology entails software with machine learning models designed to automate, target, and personalize marketing initiatives.

In a report published late last year, Forrester highlighted the efforts of vendors like Adobe, Google, IBM, Persado, Salesforce and Squirro for "embedding cognitive computing capabilities into their solutions."

"This isn't just technology for technology's sake," Forrester wrote. "AI will drive faster business decisions in marketing, ecommerce, product management and other areas of the business by helping close the gap from insights to action."

Salesforce notes that its Einstein AI technology is "built into the core of the Salesforce platform." Meanwhile, IBM’s Watson AI technology is being put to work in various marketing campaigns and products.

For example, last year, global communications company Havas Group announced a technology partnership with IBM called Havas Cognitive to help "brands tap into artificial intelligence data and use it more effectively," according to an Adweek report. TD Ameritrade, an early adopter of the technology, created what Adweek called the "first cognitive marketing program," which was targeted to football fans.

Examples of these types of pilot projects are proliferating, but experts caution that these are still the early days in terms of AI-enabled marketing technologies. While nearly every major marketing technology vendor offers "some flavor" of AI, the integration and orchestration across the various offerings simply "isn't there yet," See explains.

But it's coming. "In the next few years, we're going to see AI and machine learning become part of the core 'fabric' of software platforms in the marketing industry," says Dharmesh Shah, co-founder and CTO of HubSpot, an inbound marketing and sales software provider. "In the coming years, artificial intelligence will feel a lot more intelligent and a lot less artificial. It'll be a natural part of many of the technologies we use."

5. Marketers have mixed feelings about AI

Eighty percent of marketing executives believe AI will revolutionize marketing by 2020, according to a Demandbase and Wakefield Research survey of 500 business-to-business marketers published in December. But just 26 percent are highly confident they understand how AI is actually used in marketing, and only 10 percent say that they are using AI in their marketing programs.

What could explain that low level of adoption?

"AI in marketing is confusing and often speculative and overhyped," says Gartner Vice President Andrew Frank.

6. Chatbots don't always click with consumers

For all the enthusiasm for AI in the marketing community, the consumer segment seems less exuberant. A recent study from the marketing firm Boxever highlights that gap.

In that survey, 79 percent of marketers said they believe consumers are ready for AI and are either "excited or very excited" about chatbots. On the other hand, nearly 50 percent of consumers say they're "very unexcited or somewhat unexcited about chatbots." Why the disconnect?

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