Advances in machine learning and artificial intelligence are revolutionizing all aspects of business and industry. Marketing is one area that where the effects of machine learning and artificial intelligence are beginning to be explored, but most marketers have just grasped the outermost edges of the potential applications of this technology.
While the terms machine learning and artificial intelligence are often used interchangeably, there are distinct differences between the two. Artificial intelligence (AI) is the study of making machines that are inquisitive, that learn from their environment, and become capable of near-human problem solving; machine learning (ML) is the concept of building an algorithm that can compare and contrast a variety of data inputs, and analyze that data to draw conclusions.
What does this mean for marketers?
Consumer expectations are higher than ever before. And while this creates a challenge for businesses, to meet those expectations, it also creates a fantastic opportunity: a new way to interact with, engage, and convert consumers to become loyal ambassadors for your brand.
With artificial intelligence, companies can move beyond market segmentation to micro-target individual consumers on a variety of platforms, in a dynamic, interactive way. AI and ML concepts can be used to turn raw data into actionable insights related to demand forecasting, deals recommendations, merchandising placements, fraud detection, and more.
Data, especially first-party data, can be analyzed for profound insights into customer behavior and preferences. Machine learning leverages both volume and variety of data and combines it with a robust computing infrastructure to make marketing content decisions in real-time, with dynamic content and personalization down to the individual level.
ML and AI help marketers work smarter by:
Reducing Cost: Machine learning lowers marketing expenses in several different areas. The cost of online content creation, particularly dynamic content, is diminished because it can be automated. Automatically distributed emails, scheduled social media posts, and online ads require very little human intervention once set in motion. ML helps with offline savings, too, as it helps micro-target consumers, reducing overproduction associated with mass marketing. Finally, ML reduces costs related to data gathering and analysis – once the algorithm is created and fine-tuned, these processes can run with little intervention on the part of marketing.
Eliminating Waste: At RevTrax, machine learning techniques are employed to determine the minimum offer level that is required to influence consumer purchasing decisions. CPG firms spend hundreds of millions annually on promotions, but that money can be wasted if the ideal offer value is not determined in advance. With machine learning, not only can you find the ideal offer value for a group, first-party path-to-purchase behavior can be used to personalize the offer value decision on an individual level.
Demand Forecasting: Using big data analytics, marketers can predict the future demand for a product or service based on prior behavior down to the individual level: connecting the right offer, to the right person, at the right moment. A correlation uncovered by data analytics could allow you to tailor a campaign to give customers a deal on a product before they know that they want it.
However, all of the power of machine learning and artificial intelligence requires data; and for deep insights and maximum efficiency, marketers need first-party data. With most companies, either they don't gather data at all, or they store it on separate islands without any way to forge a connection for data analysis. With RevTrax, data is collected on the entire path-to-purchase and can be analyzed at any level, from the demographic group all the way down to the individual consumer.
RevTrax is the only company that gathers first-party data, and that has the experience with machine learning and artificial intelligence required to provide deep insights into consumer behavior. With RevTrax, your marketing campaigns can be targeted, dynamic, engaging and efficient, reducing overall costs while improving effectiveness and marketing ROI.
Learn how to get the most out of your digital Retail promotions — download the Staples case study and see smart consumer insights at work.