Source – https://www.enterpriseirregulars.com/
- AI and Machine Learning are on track to generate between $1.4 Trillion to $2.6 Trillion in value by solving Marketing and Sales problems over the next three years, according to the McKinsey Global Institute.
- Marketers’ use of AI soared between 2018 and 2020, jumping from 29% in 2018 to 84% in 2020, according to Salesforce Research’s most recent State of Marketing Study.
- AI, Machine Learning, marketing & advertising technologies, voice/chat/digital assistants and mobile tech & apps are the five technologies that will have the greatest impact on the future of marketing, according to Drift’s 2020 Marketing Leadership Benchmark Report.
Chief Marketing Officers (CMOs) and the marketing teams they lead are expected to excel at creating customer trust, a brand that exudes empathy and data-driven strategies that deliver results. Personalizing channel experiences at scale works when CMOs strike the perfect balance between their jobs’ emotional and logical, data-driven parts. That’s what makes being a CMO today so challenging. They’ve got to have the compassion of a Captain Kirk and the cold, hard logic of a Dr. Spock and know when to use each skill set. CMOs and their teams struggle to keep the emotional and logical parts of their jobs in balance. Machine learning apps and platforms are helping to acheive goals in both side of their roles.
Asked how her team keeps them in balance, the CMO of an enterprise software company told me she always leads with empathy, safety and security for customers and results follow. “Throughout the pandemic, our message to our customers is that their health and safety come first and we’ll provide additional services at no charge if they need it.” True to her word, the company offered their latest cybersecurity release update to all customers free in 2020. AI and machine learning tools help her and her team test, learn and excel iteratively to create an empathic brand that delivers results.
The following are ten ways AI and machine learning are improving marketing in 2021:
1. 70% of high-performance marketing teams claim they have a fully defined AI strategy versus 35% of their under-performing peer marketing team counterparts. CMOs who lead high-performance marketing teams place a high value on continually learning and embracing a growth mindset, as evidenced by 56% of them planning to use AI and machine learning over the next year. Choosing to put in the work needed to develop new AI and machine learning skills pays off with improved social marketing performance and greater precision with marketing analytics. Source: State of Marketing, Sixth Edition. Salesforce Research, 2020.
2. 36% of marketers predict AI will have a significant impact on marketing performance this year. 32% of marketers and agency professionals were using AI to create ads, including digital banners, social media posts and digital out-of-home ads, according to a recent study by Advertiser Perceptions. Source: Which Emerging Tech Do Marketers Think Will Most Impact Strategy This Year?, Marketing Charts, January 5, 2021.
3. High-performing marketing teams are averaging seven different uses of AI and machine learning today and just over half (52%) plan on increasing their adoption this year. High-performing marketing teams and the CMOs lead them to invest in AI and machine learning to improve customer segmentation. They’re also focused on personalizing individual channel experiences. The following graphic underscores how quickly high-performing marketing teams learn then adopt advanced AI and machine learning techniques to their competitive advantage. Source: State of Marketing, Sixth Edition. Salesforce Research, 2020.
4. Marketers use AI-based demand sensing to better predict unique buying patterns across geographic regions and alleviate stock-outs and back-orders. Combining all available data sources, including customer sentiment analysis using supervised machine learning algorithms, it’s possible to improve demand sensing and demand forecast accuracy. ML algorithms can correlate location-specific sentiment for a given product or brand and a given product’s regional availability. Having this insight alone can save the retail industry up to $50B a year in obsoleted inventory. Source: AI can help retailers understand the consumer, Phys.org. January 14, 2019.
5. Disney is applying AI modeling techniques, including machine learning algorithms, to fine-tune and optimize its media mix model. Disney’s approach to gaining new insights into its media mix model is to aggregate data from across the organization including partners, prepare the model data and then transform it for use in a model. Next, a variety of models are used to achieve budget and media mix optimization. Then compare scenarios. The result is a series of insights that are presented to senior management. The following dashboard shows the structure of how they analyze AI-based data internally. The data shown is, for example only; this does not reflect Disney’s actual operations. Source: How Disney uses Tableau to visualize its media mix model (https://www.tableau.com/best-marketing-dashboards)
6. 41% of marketers say that AI and machine learning make their greatest contributions to accelerating revenue growth and improving performance. Marketers say that getting more actionable insights from marketing data (40%) and creating personalized consumer experiences at scale (38%) round out the top three uses today. The study also found that most marketers, 77%, have less than a quarter of all marketing tasks intelligently automated and 18% say they haven’t intelligently automated any tasks at all. Marketers need to look to AI and machine learning to automated remote, routine tasks to free up more time to create new campaigns. Source: Drift and Marketing Artificial Intelligence Institute, 2021 State of Marketing AI Report.
7. Starbucks set the ambitious goal of being the world’s most personalized brand by relying on predictive analytics and machine learning to create a real-time personalization experience. The global coffee chain faced several challenges starting with how difficult it was to target individual customers with their existing IT infrastructure. They were also heavily reliant on manual operations across their thousands of stores, which made personalization at scale a formidable challenge to overcome. Starbucks created a real-time personalization engine that integrated with customers’ account information, the mobile app, customer preferences, 3rd party data and contextual data. They achieved a 150% increase in user interaction using predictive analytics and AI, a 3X improvement in per-customer net incremental revenues. The following is a diagram of how DigitalBCG (Boston Consulting Group) was able to assist them. Source: Becoming The World’s Most Personalized Brand, DigitalBCG.
8. Getting personalization-at-scale right starts with a unified Customer Data Platform (CDP) that can use machine learning algorithms to discover new customer data patterns and “learn” over time. For high-achieving marketing organizations, achieving personalization-at-scale is their highest and most urgent priority based on Salesforce Research’s most recent State of Marketing survey. And McKinsey predicts personalization-at-scale can create $1.7 trillion to $3 trillion in new value. For marketers to capture a part of this value, changes to the mar-tech stack (shown below) must be supported by clear accountability and ownership of channel and customer results. Combining a modified mar-tech stack with clear accountability delivers results. Source: McKinsey & Company, A technology blueprint for personalization at scale. May 20, 2019. By Sean Flavin and Jason Heller.
9. Campaign management, mobile app technology and testing/optimization are the leading three plans for a B2C company’s personalization technologies. Just 19% of enterprises have adopted AI and machine learning for B2C personalization today. The Forrester Study commissioned by IBM also found that 55% of enterprises believe the technology limitations inhibit their ability to execute personalization strategies. Source: A Forrester Consulting Thought Leadership Paper, Commissioned by IBM, Personalization Demystified: Enchant Your Customers By Going From Good To Great, February 2020.
10. Successful AI-driven personalization strategies deliver results beyond marketing, delivering strong results enterprise-wide, including lifting sales revenue, Net Promoter Scores and customer retention rates. When personalization-at-scale is done right, enterprises achieve a net 5.63% increase in sales revenue, 10.26% increase in order frequency, uplifts in average order value and an impressive 13.25% improvement in cross-sell/up-sell opportunities. The benefits transcend marketing alone and drive higher customer satisfaction metrics as well. Source: A Forrester Consulting Thought Leadership Paper, Commissioned by IBM, Personalization Demystified: Enchant Your Customers By Going From Good To Great, February 2020.
CMOs and their teams rely on AI and machine learning to iteratively test and improve every aspect of their marketing campaigns and strategies. Striking the perfect balance between empathy and data-driven results takes a new level of data quality which isn’t possible to achieve using Microsoft Excel or personal productivity tools today. The most popular use of AI and machine learning in organizations is delivering personalization at scale across all digital channels. There’s also increasing adoption of predictive analytics based on machine learning to fine-tune propensity models to improve up-sell and cross-sell results.