Artificial intelligence (AI) is a computer science tool that enables machines to demonstrate human-like abilities such as reasoning, learning, planning, and creativity. AI relies on machine learning to improve performance through experience and data analysis. The algorithms recognize patterns in training data, make predictions, and potentially make decisions to achieve predefined goals.
Understanding AI in digital marketing
Artificial Intelligence has brought some significant changes across various industries, and the realm of digital marketing is no different. Over the last few years, AI has steadily gained importance in the marketing landscape, presenting itself as an efficient and useful partner for companies. Indeed, AI tools are able to streamline tasks, fine-tune advertising strategies, and draw on data-driven insights to make well-informed decisions.
Here are some of the advantages AI can bring to your marketing:
- Advertising strategies: AI solutions can help companies refine their advertising strategies through advanced analytics, fraud detection, and the creation of high-quality content. Also, it helps businesses collect and analyze large amounts of data to discover trends, patterns, and customer preferences. This data allows marketers to make informed decisions and create effective strategies to optimize their marketing efforts.
- Improvement of relationship with customers: AI-driven chatbots and virtual assistants can improve significantly customer satisfaction and engagement by offering real-time assistance and personalized advice.
- Optimised email marketing campaigns: AI can automate the segmentation and personalization of email campaigns. This ensures that the right message is delivered to the right person at the right time, thereby increasing the likelihood of conversion.
- SEO optimization: it helps businesses boost their content for improved search engine visibility and rankings, as it analyzes search trends and user intent to discover the most relevant and effective keywords for marketing content. By incorporating these keywords into content, marketers can improve search engine rankings and attract their targeted public.
- Logistics automation: AI algorithms utilize historical data, market trends, and customer demand to improve inventory management in affiliate marketing. By automating logistics operations, AI tools can guarantee efficient order processing, on-time deliveries, and decreased operational expenses.
Understanding customers’ online behavior and intent
E-commerce has become a popular method for shopping, with over 79% of Americans visiting e-commerce sites, as reported by the Pew Research Center in 2016. However, only a small fraction of these visits end with a purchase, typically ranging from 2 to 5 percent (Pew Research Center, 2016; McDowell et al., 2016). This fraction is known as the “site’s purchase conversion rate”. Given that current online retail is estimated at more than 460 billion dollars, according to Forrester Research in 2017, even a small improvement in a site’s purchase conversion rate will lead to a significant increase in revenue (Sismeiro et al., 2004).
Research conducted by Mokryn et al. showed how to predict if anonymous online customers are likely to make a purchase or not. It focuses on factors like whether visitors are looking at trending products and when they are shopping. The study observed that people are more likely to buy items that are currently popular on the site and that the timing of their visit, such as the day of the week or time of year, also influences their buying intent. It introduces a new method that uses these timing and trend factors to better predict purchases. By analyzing data from different e-commerce sites, the study shows that considering how recently a product has been popular and how long shoppers spend browsing can significantly improve predictions of whether a visitor will buy something. This insight can help online stores tailor their recommendations and improve their understanding of shopper behavior (Bogina et al. 2019).
Case study: McKinsey survey
According to a recent survey conducted by McKinsey, only 15 percent of CMOs believe that their company is on the right track with personalization. However, there is a significant incentive to figure it out, as leaders in personalization have discovered ways to drive revenue increases of 5 to 15 percent and marketing-spend efficiency increases of 10 to 30%. They primarily achieve this by deploying product recommendations and triggered communications within individual channels.
Conclusion
Artificial Intelligence is revolutionizing digital marketing by offering tools that enhance advertising strategies, customer interactions, content creation, SEO, and logistics. By leveraging AI, businesses can refine their marketing tactics through advanced analytics and fraud detection, improve customer satisfaction with real-time support, and automate content generation to align with audience preferences. AI also plays a crucial role in optimizing SEO through data-driven keyword research and streamlining logistics for efficient inventory management. Understanding online behavior and purchase intent is essential for improving conversion rates, especially given the vast potential for revenue growth in e-commerce. Research, such as that by Mokryn et al., highlights the importance of analyzing trends and timing to predict purchasing behavior more accurately. By focusing on popular products and the timing of visits, businesses can better anticipate customer needs and tailor their marketing strategies accordingly.
Incorporating AI into your marketing efforts can provide a significant competitive advantage, enhancing your ability to attract and convert customers. As AI technology continues to evolve, its applications in digital marketing will expand, offering even more opportunities for innovation and success. Include AI in your company’s strategies today to transform your marketing approach and achieve concrete results for your business.
References
Bogina, V., Mokryn, O., & Kuflik, T. (2019). Will this session end with a purchase? Inferring current purchase intent of anonymous visitors. Electronic Commerce Research and Applications, 34, Article 100836. https://doi.org/10.1016/j.elerap.2019.100836
McDowell, W. C., Wilson, R. C., & Kile Jr, C. O. (2016). An examination of retail website design and conversion rate. Journal of Business Research, 69(11), 4837–4842.
Pew Research Center (2016). Online shopping and e-commerce.
Sismeiro, C., & Bucklin, R. E. (2004). Modeling purchase behavior at an e-commerce website: A task-completion approach. Journal of Marketing Research, 41(3), 306–323.
