Marketing Trends and Artificial Intelligence

While the psychology that underlies solid marketing principles largely remains unchanged, the tools marketers use to reach audiences evolve rapidly. Marketers who seek a competitive edge need to stay on top of the latest trends and learn to implement them.

The most significant disrupter in marketing in recent years is artificial intelligence. For instance, almost 42% of consumers currently use AI-based chatbots for purchases.¹

Read on to learn more about how AI is transforming marketing by driving personalized experiences backed by data analytics.

Creating personalized marketing campaigns for customers based on their unique blend of behaviors and preferences is the holy grail for marketing professionals.

Target has long been a leader in this type of customer tracking. In the early days of analyzing customer behavior, Target identified several products women frequently bought together that indicated they were in the early stage of pregnancy. As part of their marketing campaign, Target would send people who bought this combination of product coupons for baby-related paraphernalia.

In a tale that has since become marketing lore, the father of a teenage girl marched into his local Target, outraged that the company sent his daughter these coupons, only to find out she was indeed pregnant.²

Today, with all our tech advances, this story feels benign. Many people joke about their phones knowing what they're thinking and seem to accept some level of intrusion.³

Despite their misgivings regarding the possibility of telepathic smartphones, customers still respond well to personalized marketing. According to the global management consulting firm McKinsey & Company, 76% of consumers get frustrated if brands don’t offer personalized experiences, and companies that master the art of personalization generate 40% more revenue than those that don’t.⁴

Two of the most effective methods for creating personalized marketing experiences are omnichannel marketing and generative AI.

Personalized marketing has expanded far beyond mailing coupons. Brands can now create personalized experiences that span multiple channels and include both digital and real-world shopping. For example, Sephora compiles data from customers’ browsing history, online purchases, in-store interactions and app-based quizzes to generate customized recommendations through its app and in-store consultations.

Customers don’t want to have to repeatedly input the same information and expect companies to be able to reference data they’ve provided previously—even if it was through a different channel. People ranked the following personalized experiences as most important to them:⁵

• Easy navigation in-store and online
• Relevant product and service recommendations
• Tailored messaging
• Targeted promotions
• Celebrating personal milestones

Artificial intelligence (AI) is the machine that drives personalized marketing. Generative AI is making it easier and cheaper to deliver hyper-personalized customer experiences at all phases of the customer journey.

Generative AI is a machine learning model that can use algorithms to generate new content based on training data. Sophisticated foundation models can identify patterns in customer and market data to target relevant audiences through customer segmentation.

The biggest advances revolve around generative AI’s marketing automation ability, such as creating customized lead-nurturing campaigns in response to evolving customer behavior. This stands in stark contrast to more primitive methods of customer segmentation that would have you send one ad to customers under 30 and a different one to customers over 30.⁶

Without massive amounts of high-quality data to serve as fodder, AI models wouldn’t be able to work their magic. Data analytics has always been vital to the marketing industry. However, earlier efforts, such as Target’s personalized pregnancy promotion, depended on highly skilled statisticians providing exclusive insight from expensively obtained, closely guarded data.⁷

Today’s businesses are swimming in data that can be scraped from the internet with cheap and widely available tools. While it still takes some skill to analyze data for marketing insights, it’s much easier than ever before.⁸

Feeding data into the following types of models can generate many effective, personalized marketing strategies.

Descriptive analytics is the most common data analytics model that organizations use. Descriptive models track performance and trends. You can use descriptive analytics to measure the results of your marketing campaigns so you can track their success and your return on investment (ROI).

Descriptive analytics tells you whether you're on track to meet your goals. It identifies areas where you’re overperforming or underperforming by answering the question "What happened?"⁹

Predictive models use historical data to let marketers stay one step ahead of consumer desires and trends. It uses machine learning and AI to predict future behavior based on past user behavior and transactional data.

L’Oreal uses an AI platform developed by Synthesio to analyze data from 3,500 online sources so it can predict beauty trends six to 18 months before they emerge.¹⁰ Predictive analytics answers the question, "What will happen?"

Descriptive and predictive models can give you insight into customer desires and behavior and illustrate opportunities for revenue growth, but prescriptive models offer more direct, actionable guidance. Prescriptive analytics can flag trends and identify overlooked marketing opportunities, giving you a “prescription” for what actions you should take next. Prescriptive models answer the question "What should we do next?"¹¹

The fusion of AI and digital marketing is forging a path for the future of the marketing industry. The adaptability and efficiency that AI technology brings to the table provide unprecedented opportunities for businesses to craft more impactful and relevant campaigns, ensuring that they resonate with their target audience more than ever.

Machine learning, a subset of artificial intelligence, is revolutionizing the way digital marketers approach their campaigns. Instead of making educated guesses about what might resonate with audiences, machine learning algorithms sift through vast quantities of customer data, identifying patterns and predicting future behavior.

For example, an e-commerce platform might leverage machine learning to analyze user behavior. By assessing which products are frequently browsed together or after one another, the system can generate and display product recommendations that align closely with individual user preferences. This not only enhances the customer experience but also increases the likelihood of additional sales.

Moreover, as machine learning models are continuously fed new data, they learn and adapt, refining their predictions and recommendations.¹² This ensures that the marketing strategies employed are always in tune with evolving consumer preferences.

One of the paramount challenges for digital marketers is to engage customers in an increasingly cluttered digital landscape. AI marketing tools are now stepping in to automate routine tasks and enable marketing teams to focus more on creative strategies.

Natural language processing (NLP), another subfield of AI, allows for improved customer engagement through chatbots and voice assistants. These tools can respond to customer queries in real-time, providing instant support and guidance. For businesses, this means less strain on human resources and a consistently efficient customer experience.¹³

Augmented reality (AR) is another avenue through which businesses are enhancing customer engagement. For instance, furniture retailers now offer AR apps that allow customers to visualize how a piece might look in their homes before making a purchase.

While many businesses have begun to integrate AI into their digital marketing strategies, the potential of this technology is still unfolding.

Here's a glimpse into what's on the horizon:

1. Voice Search Optimization: As voice assistants like Siri, Alexa and Google Assistant become more prevalent, optimizing content for voice search will be crucial. This means understanding the more conversational and question-based queries users tend to voice and tailoring content to fit that mold.
2. Personalized Mobile Marketing: Given the ubiquity of smartphones, AI-driven mobile marketing strategies will become the norm. Machine learning can analyze individual user behavior on mobile apps, paving the way for hyper-personalized ads and notifications.
3. Natural Language Generation (NLG): Going beyond NLP, NLG involves the generation of content. This could mean AI tools crafting perfect product descriptions or even blog posts based on a given set of parameters.
4. Data Collection and Real-time Analytics: AI algorithms will further simplify the data collection process, allowing businesses to react in real time to emerging trends or shifts in consumer behavior.

For businesses to stay competitive in today's digital realm, simply employing AI tools won't be enough. It's about how these tools are integrated into marketing strategies to engage customers, provide a seamless customer experience and ensure that content is always relevant and timely. “These interactions have to be relevant and useful, sharable and personal, providing an essential service at the right moment and in the right place,” according to Ogilvy Consulting Senior Partner Pierre Robinet.¹⁴

Those who can harness the full potential of AI, from data collection to innovative ad campaigns, will set themselves apart and pave the way for the future of marketing AI.

As the boundaries of what's possible in marketing continue to expand, staying updated with the latest AI trends and tools will be non-negotiable for brands aiming to thrive in the digital age.

The future of marketing AI promises a landscape where businesses can connect with their audiences in more meaningful ways, driven by data and powered by unparalleled technological innovation.

Harnessing the power of customer data lies at the heart of successful marketing strategies. In the age of digital marketing, where every click, like, share and comment can be captured, analyzed and acted upon, customer data has never been more accessible or more valuable.

The symbiosis of artificial intelligence and digital marketing is undeniably reshaping the very fabric of marketing strategies. AI technology is not just a supplementary tool; it's the engine that can drive an entire digital marketing strategy forward.

Predictive analytics can use historical data to forecast which type of online ads might resonate with different consumer segments.

Instead of casting a wide net with generic ads, marketers can now deliver targeted messages that align closely with individual consumer preferences. This specificity not only boosts the efficacy of digital ads but also ensures that audiences are presented with relevant content, enhancing their experience and engagement.

AI-powered chatbots are now commonly found on websites, aiding in instant customer service, guiding visitors and even helping in product selection. The sophistication with which these chatbots operate is a testament to the leaps in AI technology. They can analyze customer behavior, perform tasks like sentiment analysis and deliver valuable content or solutions in real time.

Search engines are getting smarter.¹⁵ AI technology ensures that when consumers search for products or services, they are met with relevant data and website content. This technology goes beyond just matching keywords; it understands context, user history and even the underlying sentiment of the search query.

Another fascinating application can be found in content marketing. AI and data science can now generate a virtual version of website content tailored to the individual user, ensuring that each visitor's experience is as relevant and engaging as possible.

As businesses expand their horizons in the global economy, understanding diverse consumer bases becomes crucial. AI helps in capturing and interpreting data from varied consumer segments across the globe, ensuring that marketing campaigns are culturally relevant and effective.

However, the old Winston Churchill edict now applies to AI: With great power comes great responsibility.

The ethical concerns surrounding data collection and usage are gaining prominence. It's imperative for businesses to handle customer data with care, ensuring privacy and transparency in its use.

With intelligent machines rapidly evolving, their integration into marketing is bound to get even more profound. Language models, which are already aiding in content creation, might soon craft entire marketing campaigns, from online advertisements to website content.

As a result, sentiment analysis will likely become more nuanced, capturing not just whether a sentiment is positive or negative, but fully understanding its depth, context, and cultural significance.

In conclusion, customer data, when synergized with the power of AI in marketing, has the potential to revolutionize the digital landscape.

For businesses, staying ahead will mean not just adopting the latest AI technology but using it ethically, creatively and strategically.

“We need to apply a very high level of diligence and discipline and collaborate across industries, to mitigate bias, misinformation and security risk in order for the pace of advancement to be sustained,” says Philippe Krakowsky, the chief executive of the Interpublic Group of Companies, who was quoted in a 2023 New York Times article entitled, “A Blessing and a Boogeyman: Advertisers Warily Embrace A.I.”¹⁶ As always, at the core of every strategy should be the goal to add value to the consumer, and with AI, the possibilities are limitless.

Marketing pros who want to stay ahead of the curve and carve lasting and successful career pathways need to have not only an advanced understanding of the marketing capabilities of AI, they also need to have the experience and skills to properly leverage this AI to its full potential—safely.

AI, machine learning, and advanced data analytics are marketing trends that are transforming the future of marketing and sales by creating hyper-personalized experiences that increase customer engagement from the start of the customer journey.

Learn the skills you need to leverage these tools and advance your marketing career with an Online Master’s in Marketing from William & Mary. Reach out to our admissions outreach advisors today to learn more.