The use of artificial intelligence (AI) to collect and analyze data is growing, with worldwide spending on AI systems predicted to reach $57.6 billion by next year, according to technology research firm IDC. A recent article in Forbes noted that 40% of marketing and sales teams view AI as critical to achieving their department’s goals. At the same time, there are concerns over consumer privacy, with many U.S. Internet users concerned about the security of their personal information and a growing push for privacy regulations akin to Europe’s GDPR legislation.
How can marketers effectively use AI while remaining sensitive to consumer concerns? We spoke with Matthew Fanelli, SVP of Digital for MNI Targeted Media, which develops targeted media plans for specific audiences, about the applications and potential of AI.
Reaching the Right Customers
Fanelli noted that consumers have more choices than ever before, along with a shorter attention span and many connected devices (average household has 13). The challenge for marketers is to break through the clutter, or consumer trifecta, as he called it. Whether it’s gathering data through listening devices such as Google Home or Alexa, or through facial recognition software used by some retailers, marketers can use AI to improve their targeting and engagement. “No two people are alike,” said Fanelli. “AI helps deliver customized messages to each household.”
For example, Fanelli noted that through home listening devices, marketers can gather data about a family’s television preferences. A pet food company could use this data to target households that watch Animal Planet for a certain amount of time. The real-time data provided by AI systems can aid in inventory and production decisions: farmers have started using drones to survey their land and monitor the soil quality and crop growth in order to manage their operation more efficiently. And grocery store chains have begun to use robots to patrol the aisles to monitor inventory and alert management to spills. They can also provide consumer goods manufacturers with a wealth of information on customer shopping habits.
The use of AI enables companies to be more efficient and targeted in their campaigns, ultimately lowering their campaign spend. “AI is another way to collect and use data,” said Fanelli. “With this data, you can provide consumers with relevant offers and messaging, ultimately making their lives easier by sharing products and services they want.”
Using a predictive analytics model, in conjunction with their current customer and industry data, allows marketers to begin to leverage the power of AI in their campaign planning, said Fanelli. In terms of the marketing mix, “technology and development are moving closer together,” he said. “Look at what your market is interested in, what’s your target and where and how you should reach them in order to have them complete the desired action.”
For marketers looking to take advantage of AI within their media plans, Fanelli is optimistic about the potential of OTT (“over-the-top”) video – streaming services such as Netflix and Hulu – noting that as a result of the COVID-19 crisis, subscriptions to streaming media have more than doubled. Most OTT providers integrate AI into their platforms, gathering data on subscriber preferences, which allow advertisers to reach their target audiences more effectively.
With concerns over the collection and use of personal information growing, Fanelli emphasized the importance of educating consumers on how their data is obtained and used. “Be transparent and follow consumer protection guidelines,” he said. “When consumers understand why they are receiving an ad, they get it. They see how it’s making their lives easier. It’s when you have poor targeting that it becomes a problem.”
For more information on how marketers can leverage AI, check out these resources from the Marketing Artificial Intelligence Institute.