How Brands Are Using AI to Improve Personalization

Getting ever-closer to 1:1 marketing at scale

A hand draws a straight line with chalk; on the line march three men with winds sticking out of their back
Artificial intelligence frees up time for marketers to focus on creative initiatives. Getty Images
Headshot of Julia Stead

For marketers who have been honing their analytics skills and building an AI strategy, the coming months promise to be transformative because AI is finally getting us closer to the holy grail of 1:1 marketing at scale. Varying levels of marketing personalization and segmentation have been around for years, but a variety of roadblocks—namely too much data and too few ways to take action on it—have prevented pure personalization from becoming a reality.

There should be a strong push to scale personalization, too, as 98 percent of marketers agree personalization advances customer relationships. However, only 12 percent of marketers are satisfied in their level of marketing personalization, which should concern them because 75 percent of consumers believe personalization is an important or very important characteristic of their interactions with a brand.

With Amazon’s growth pushing the personalization narrative forward, brand marketing teams know that the time is now to up their personalization games. As a result, CMOs need to invest in more tech talent, specifically data scientists, attribution specialists and digital transformation experts. CMOs also need to spend more on AI-powered software systems that can learn about who customers are and what they want.

Thanks to AI handling more of the work, marketers will be able to focus more on creativity and innovation.

Just as importantly, marketers are realizing that personalization is about both capturing data and using it well. I estimate between 40 percent and 50 percent of brands are now equipped with the tech, data, talent and mindset that will seriously improve their team’s performance this year. Back in 2015, I would have put that number at only 15 percent.

Realizing the promise of 1:1 marketing

While personalization is not currently achieving true 1:1 marketing at scale, we are getting closer thanks to a recent (and continuing) wave of AI-powered marketing tools. Campaigns are becoming more probabilistic and less based on broad rules. Marketers are evolving from regular old segmentation like “females who buy shoes regularly” to much more granular and specific personalization through segmentation that looks more like “Warriors fans who like to hike, drink whiskey, buy high heels and prefer SMS as a communications channel.”

The increased accessibility of data and the ability to take action on it are what will make 1:1 marketing possible. While marketers have long had ecommerce data to use, that’s not the only point of contact they have with customers. Getting visibility into offline interactions like in-store and phone conversation data is vital to create a holistic view of the customer experience. Technologies are more advanced for capturing conversation data than in-store data, which nobody has quite nailed down yet. Google has given it a shot, but the sneaky way that it went about using credit card data to track purchases rattled consumer privacy advocates and still only amounted to a workaround. To create new 360-degree personalized shopping experiences, it will likely take combining many sources of data, from call analytics to credit card data to online tracking. You must then weave together all the data in a meaningful way.

AI can accomplish all of those tasks—and thank goodness. For too long, digital interactions between brands and consumers was all about marketers either making a sale or gathering data. Now, their focus is rightfully on the customer experience.

Transforming roles

The rising importance of data and analytics to power experiences and personalized marketing means that brands are restructuring roles. Traditional roles and sub-departments must shift, and cross-team coordination around analytics must be operationalized.

Going forward, we can expect even more marketing roles that center around using data. Thanks to AI handling more of the work, marketers will be able to focus more on creativity and innovation.

What’s more, new roles will emerge to take advantage of the opportunities for better data for targeted ads, cross-channel marketing and customer service. AI will make some job functions redundant, but it will not necessarily replace the need for humans. Instead, we’ll see more value placed on actionable ideas, out-of-the-box innovation and testing use cases and less value hinging on territorial roles or seniority.

Evolving with AI

AI is the linchpin for a fuller data picture and scaling 1:1 marketing. And improving personalization in this way requires a bigger investment across the board in talent, time, data and software. It also means ongoing change as roles, job titles and workflows adapt to new technologies.

Get the investment you need by picking a personalization use case for AI that fixes a disconnect in your brand’s customer experience. Run tests with better data, show stakeholders the improved results and keep iterating. You’ll need to make this change sooner or later. Why not make today the day your brand starts mastering personalization in this AI-powered data era?

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@JuliaStead Julia Stead is vp of marketing at Invoca.