Source: Pexels
AI is the hot topic of the year. According to Next Move Strategy Consulting, the market for AI worldwide will be expected to be worth up to nearly two trillion U.S. dollars. By 2023, the adoption rate of Generative AI in marketing and advertising will already be the highest in the US (Exhibit 1). So, how exactly is AI changing the future of digital marketing?
Exhibit 1
Source: Statista
Before we get to that, let us talk about the marketing funnel.
The marketing funnel is a model describing the process of people going from learning about the brand to becoming loyal customers. Differing from the traditional funnel, the digital marketing funnel indicates that people go through five stages: awareness and engagement, consideration, re-marketing, conversion, and retention (Exhibit 2).
Exhibit 2
The Digital Marketing Funnel
In this article, we will explore the potential implementation of AI at different stages of the funnel and look at the progress that has already been made.
Awareness is the start of a relationship between the brand and consumers. To make consumers aware of the brand’s existence, lead them to engage with the brand, and get them through the top of the funnel (ToFU). In this case, reaching out to the right consumer is crucial. In other words, it is important to let potential customers know about the brand’s online presence. Traditionally, this requires a huge amount of research on customer demographics, behaviour, and so on. However, with AI, targeting customers is now faster, easier, and more accurate.
Here’s how.
Nowadays, major social media platforms have integrated AI in the form of machine learning (ML) algorithms, which could help them deliver tailored content to audiences. They have the ability to provide and recommend the most related results based on ML-based search engines. To achieve search engine optimisation (SEO), companies can take advantage of AI by using predictive SEO as a tool to target trending topics for content creation that attracts their audience’s attention.
To do so, content has to be personalised, relatable, and appealing to different segments of customers. Traditionally, this was not only time-consuming but also cost-ineffective. But now we have generative AI (Gen AI). Personalised advertisements can be generated instantly based on consumer experiences, online activities, or even genders, regions, and languages. This increases the chances for people to be ‘aware’ of the brand and convinces them to engage with the company, bringing them from ToFU to the middle of the funnel (MoFU).
The first stage of MoFU, consideration, is to turn consumers into ‘leads’. A lead is a potential customer who has interacted with a brand or share information with the company. For example, sending a price enquiry or sharing their email. In this case, AI-powered tools can help companies analyse the engagements that potential customers had with the company. This includes how often the potential customer visited the page, how much time was spent, the number of first-timers, and whether they signed up for newsletters or emails.
With these lead generations, companies should be focusing on how to bring them to the bottom of the funnel (BoFU), or, in other words, 'convert’ them into buying the products. Gen AI can help businesses create follow-up emails or develop AI chatbots to resolve questions from potential customers quickly. Moreover, an AI programme called Air AI was just released recently (Exhibit 3). It is able to complete sales calls, provide customer service, and act as a sales agent to assist people in completing their purchases. This is a major technological breakthrough, and we can only expect more implementations in the future.
Exhibit 3
Source: Air Ai Official Website
To reach the BoFU, there are two things that companies would do. First, remarket the potential customers who failed to convert, and second, retain customers and create brand loyalty. Remarketing is when people who did not convert re-engage. To encourage people to do so, Gen AI can assist companies in creating suitable ads instantly based on the audience’s data and try to have lead generations revisit and purchase products or services from the company. For those who converted, companies should try to retain customers. To build brand loyalty, customer relationship management (CRM) is crucial. AI-driven CRM allows businesses to analyse existing customers to create even more personalised ads. Moreover, with AI, companies could examine and forecast sales, which may lower their cost of inventory, making resource distribution more efficient.
AI is evolving rapidly, and companies nowadays choose to integrate AI tools to bring potential customers through the funnel more efficiently. I believe that when AI assists marketers with customer segmentation and data analysis, they will be able to invest more time in work that requires creativity, human behaviour, and strategies. Instead of worrying whether AI will take over jobs and roles, we should try to understand and practise using AI tools in order to adapt to the future world.
Bibliography
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Marr, B. (2021). How AI Is Transforming The Future Of Digital Marketing. Forbes. Retrieved from https://www.forbes.com/sites/bernardmarr/2021/10/18/how-ai-is-transforming-the-future-of-digital-marketing/
Bider, A. (2023). How AI Will Revolutionize The Future Of SEO. Forbes. Retrieved from https://www.forbes.com/sites/forbesagencycouncil/2023/04/19/how-ai-will-revolutionize-the-future-of-seo/
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By Marketing Insights, Stephen Lin (Yen Yu)
Writer
Edited by Samuel Golder
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