AI in Marketing: What are the Pros and Cons?

AI Apr 04, 2022

Over the last few decades, marketing has been transformed from disconnected and siloed analogue channels to a series of interconnected digital and data driven platforms and touch-points that help marketers understand where their customers are, connect with them, and nurture them through the sales and marketing funnel with personalized messaging at relevant touch-points. Today, digital marketing has become a key driving force behind many businesses marketing strategy and is increasingly being augmented by AI, which we previously touched on in the scope of artificial intelligence (AI) in digital marketing.

As previously discussed, AI can be applied in marketing in many different ways, such as recommendation systems that provide curated recommendations based on a customers’ including previous search and purchase behaviour or similarity to other customers, or predictive analytics which can be used to anticipate actions such as purchase or churn likelihood, to help marketers improve the customer experience, retain customers and secure sales. These applications present exciting opportunities for marketers but prospective adopters must be mindful of not only the pros but also how to manage the cons.

Pros of AI in marketing

1.     Increase customer relevance Enhance and segment your target market better

A well-defined target market is critical to informing a business’s marketing strategy and the tactics used to connect with, present, persuade and convert your audience into customers. Marketers have an abundance of data available from first, second and third-party sources (e.g., such as CRM, sales performance, social marketing platforms and website analytics) can be blended and combined with Artificial Intelligence to form a more comprehensive picture of your audience, identify changes in behaviours over-time and inform how your business will meet their continuing evolving and emerging needs through tailored marketing strategies. This improves the customer journey, demonstrates your business’s understanding of the customer at different touch points and paves the path to customer loyalty and retention.

2.     Predict customer churn and enable preventative action

Customer churn is when customers lose interest and abandon your business and products. As the adage goes, it’s much harder to attract new customers than retain old ones. In fact, depending on your industry and which article you read, it can cost up to five to twenty-five times as much to attract a new customer. With eye watering figures like these, it makes sense to do everything you can to retain those existing high-value customers wherever possible. The challenge for marketers is that it isn’t always easy to identify the events that signal a customer is likely to churn nor know how to prevent it or react when it’s happening. Fortunately, AI excels at identifying patterns and trends in huge data sets to help marketers understand the causes and raise red flags to motivate preventative action to reengage and retain customers at-risk from churn.

3.     Streamline and personalise the user experience

The days of one-size-fits-all being the right approach to marketing touch-points are over. When customers interact with a brand, website, product, or service, they expect the interaction to be personalized, and customized to their profile, needs, interest, and preferences. Platforms such as Amazon, Netflix and YouTube have done this exceptionally well because they understood early that personalisation translates to increased engagement, sales, and becoming a fixture in your customers' habits.

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Artificial intelligence allows for personalised user experiences such as a change in a website's user interface/UX.

Artificial Intelligence and recommendation engines in particular are the driving force behind this ‘hyper-personalization’ and enables the needs and preferences of individual users to be fulfilled to a scale and quality that would be otherwise impossible through manual techniques or rule-based methods. This technique works by identifying patterns within individual user behaviour and across customer and product groups to deliver tailored user experiences, whether that be for a certain movie title, product, change in UI/UX of a website or even the creative used in a digital ad.

While AI applications in marketing offers a range of benefits to businesses and consumers, there are concerns that must be acknowledge and addressed. Here are some considerations for the use of AI in marketing.

Cons of AI in marketing

1.     The Social Dilemma

Taken from the documentary of the same name, the first consideration is the ‘echo chambers’ that can be created by intelligent systems that bombard us with content, messaging and even fake news that distort people’s view of reality by failing to expose us to differing ideas, values and opinions. This has been particularly identified on platforms such as Facebook and YouTube where people have been indoctrinated into conspiracy theories by the sheer abundance of content that reinforces a particular view of the world.

2.     Privacy hindering innovation

Privacy is another vital factor that cannot be overlooked. Users have a right to know what companies know about them, where and how their data is being used, and how it is being monetized. Whilst there are measures in place to afford consumer protection of their online data, most of the current legal framework such as United Kingdom’s and European Union’s General Data Protection Regulation (GDPR) focus on private data such as names, contact details, birth dates and addresses. Whether this goes far enough is a matter of perspective and the laws are constantly being reviewed, but data privacy does impact how and the effectiveness of AI for marketers. Balancing the needs of customers and business is no easy task as under and over regulation harms both companies, customers and innovation in AI.

3.     How much power do consumers really have?

This gives rise to our final challenge: the issue of user control in shaping the recommendations they are exposed to. Recommendations can add significant value and help to create seamless experiences when they work but be vexing when they don’t. You have likely been in a situation where you have searched for a service or product that you were momentarily interested in or simply curious about or even subscribed to a newsletter or downloaded an app, before deciding it wasn’t of interest.

Well-used recommendations can add significant value and help to create seamless experiences, but otherwise, they can be vexing.
Well-used recommendations can add significant value and help to create seamless experiences, but otherwise, they can be vexing. 

Then for the next two weeks you’re unrelentingly bombarded with advertisements and non-skippable ads that are no longer relevant. While you might sometimes have the option to say an ad is not relevant, users ultimately don’t have the power to take comprehensive measures or shape how AI learns and provides recommendations: this power rests with the platforms. This can create a negative and frustrating user experience and, in some cases, even reinforce trauma.

Final word

As with any technology, there will always be pros and cons. AI is no different. The challenge is for marketers to balance these and act in a way that is transparent and honest, communicates the value to users and makes it clear that the benefits outweigh the costs. Over the next few years, we will see a massive increase in AI adoption in marketing and other sectors. The businesses that strike this balance will be the ones who reap the true benefits for themselves and customers.

Interested in how Brainpool can enhance your marketing using AI? Contact us here at [email protected].

Written by Clayton Black and Andrew Modrowski

Brainpool AI

Brainpool is an artificial intelligence consultancy specialising in developing bespoke AI solutions for business.