AI is ushering in a new era of personalized marketing

This article is part of "Build IT," a series about digital tech trends disrupting industries.

Generative AI is on the tip of everyone's tongue this year, and marketers are eager to embrace it. In a survey from Salesforce, 51% of marketers said they were using generative AI, with another 22% saying they planned to do so. The benefits could be significant: McKinsey has projected that generative AI could increase marketers' productivity by 5% to 15%, adding up to $463 billion in value annually.

The financial upside of adopting generative AI in marketing and sales is pushing companies to rapidly adopt it. Understanding how AI works and how to deploy it is now a focus of many marketers.

The focus is driven by a desire to deliver more-personalized messages that encourage consumers to buy. Self-preservation is a motive, too: Developing AI proficiency could help bolster job security, as some marketers worry the technology might replace them if their expertise doesn't evolve.

"For those who are jumping on the bandwagon and really understanding it works, it gives them a competitive advantage," Tom Krutilek, the chief marketing officer at the fintech marketplace InvestHub, told Business Insider.

AI can enable personalization at scale

InvestHub, founded in 2021, aims to help startups raise capital by matching them with investors. While the goal is as old as markets themselves, InvestHub is taking a novel approach: It's constructing an AI-powered platform designed to use data about startups, such as the industry a company is in and the size of the investment it needs, to connect them with befitting investors. It works in reverse, too, helping investors find startups that align with their interests. "Personalization is important to us," Krutilek said.

Krutilek also uses AI internally to conduct market research that could help the company attract clients — and tweak its marketing for different audiences. "We have to ask, how do we speak to the CTO or the person in charge of revenue operations?" he said. "That's different from how we speak to a venture capitalist."

This isn't to say InvestHub uses AI to generate marketing copy and ships it as is. Krutilek described AI as a "starting point for our team." It can suggest an effective marketing message, but his team still needs to "add the human touch" by determining whether the AI's suggestions are suitable and making the call on which marketing strategy to pursue.

Marketers can also use AI's efficiency to deploy personalized messages at scale. Bob Hutchins, the founder of the AI marketing consultant Human Voice Media, said long-tail marketing content, like product description pages, or PDPs, was ripe for disruption.

PDPs are a critical component of modern e-commerce marketing strategies. If you search for a product on Google or Bing and then click on a link, or if you click on a product recommendation on Instagram or TikTok, the page you'll land on is most likely a PDP.

Ideally, PDPs should be personalized; a recently retired 65-year-old in Arkansas is likely to have different priorities than a 20-something student in Spain, and a product page should reflect that. But in practice, this type of personalization is unwieldy, since it involves creating numerous iterations of one product page. Many e-commerce sites find that task beyond what even a well-staffed marketing team can handle, but AI could change the equation.

"If I want to add 5,000 products next quarter, who is going to write that? Who is going to make sure it follows brand guidelines?" Hutchins said. "If AI can reduce what would take three or four months down to a few days, then all of a sudden that changes the economics of my business."

As marketers become more experienced in using AI, Hutchins said, more companies will be able to tap into real-time analytics and personalization that present customers with buying suggestions based on their shopping history with the company.

Authenticity with AI means using it in the right place at the right time

AI's promise of efficiency is clear, but marketers often find their attempts to deliver personalized messages stymied by the industry's most prolific buzzword: authenticity. While marketers dream of AI-driven personalization, consumers say they like brands that feel more human.

Uber Eats found itself on the wrong side of this problem in December. A person on X found that the Uber Eats page of one pizza restaurant in New York, where pizzas are often called pies, had appeared to replace blank menu images, which can sink sales, with AI-generated images of thick, bready pastries filled with odd meats.

But Greg Kihlström, the owner of the marketing consultancy The Agile Brand and an instructor at the Association of National Advertisers' School of Marketing, is skeptical that authenticity will prove a barrier for long. "Consumers are pretty pragmatic about a lot of things," he said.

Kihlström and Hutchins argued that if brands ensure their AI's results are accurate and follow the brand's marketing guidelines, consumers are unlikely to object to the AI or, in many cases, even notice when it's used.

Research seems to support this belief. A study published in December found that even trained linguists had difficulty distinguishing text generated by AI from text written by a human. Other studies have found that, in many situations, people can't tell AI-generated images from real photos.

While Kihlström advised marketers to remain mindful of AI's nuances and limitations, he said that "if it serves a practical need, I don't think most consumers, in a year or two, are going to care." But he added that there were still "many years to go" before AI could create something like a sentimental Super Bowl ad.

Will AI replace marketing jobs?

While some marketers wonder how consumers will react to AI, many fret about something closer to home: their jobs.

Kihlström said industry professionals were worried that AI might reduce or eliminate the need for certain roles — fears that go hand in hand with the technology's promise of efficiency.

"The senior-level marketers are less concerned about losing their jobs, but they are worried about getting headcounts cut," he said. "Because their bosses are saying, 'If 30% of anybody's job can be replaced by AI, let's cut 30% of the workforce.'"

Marketers with creative tasks might be the first to feel this pain. "The lowest-hanging fruit is obviously content creation," Hutchins said. He recommended companies looking to get started with AI in marketing take a hard look at repetitive creative tasks, like writing and editing ad copy, that generative AI could handle.

Opinions vary, however, and Krutilek was optimistic about marketing's future. "I don't think it's going to change the number of jobs," he said of AI, though he added that he thinks marketers with AI experience will have an indispensable, advantageous skill set.

Krutilek said AI had radically changed how he incorporated market research into positioning InvestHub against its competitors. He said he could now knock out in a few hours a competitive analysis that once required a solid week of research.

It's not just analysts who benefit. He said AI tools let creative-team staffers more quickly imagine and iterate on assets like graphics for a marketing campaign. The time saved could be used to consider a greater number of creative assets or to scrutinize a creative strategy.

"Before AI, it was like, 'How can I minimize? I only have X staff and X capability and X budget,'" Krutilek said. "But what it's allowing me to do is really hone in on which tactics will work for us and how we can make them better."

Read the original article on Business Insider