AI has been making its presence felt in the digital marketing field, so much so that two in three marketers have already integrated the technology into their operations. While AI has often been used for content creation, copywriting and brainstorming, another particularly valuable use of AI is for predicting consumer behavior.
The marketers of today have an opportunity to use AI across all customer touchpoints to analyze and understand their chosen audience better than ever before.
Using the Past to Predict the Future
Whenever someone talks about the use of AI in digital marketing for predictive analytics, the first mention always goes to analyzing historic data. In other words, AI-powered machine learning models can analyze the way customers have behaved in the past to predict future behavior with impressive accuracy. In particular, deep learning algorithms can recognize complex patterns in user behavior, such as how consumers interact with content, which ads they click, and how long they stay on specific pages, as well as past purchasing habits and browsing histories.
This kind of data regarding past customer interactions is useful because it allows companies to create more strongly personalized campaigns. For example, based on someone’s purchase history, an e-commerce platform can show ads for similar products. Better personalization means more repeat purchases and improved brand loyalty.
Natural language processing (NLP) is another major way companies are analyzing customer interactions. NLP allows AI systems to understand and analyze text data from customer reviews, customer support channels, social media posts, and other unstructured sources. Marketers use these insights to gauge public sentiment, monitor trends, and adapt marketing strategies to either capitalize on positive interactions or address concerns.
Marketing firms have already gotten very good at using AI in this way, and it’s started to produce results.
Increasing the ROI of Digital Marketing
Personalization driven by predictive analytics in digital marketing has allowed brands to understand customer preferences and behaviors in more detail. That in turn has brought increased revenue and brand loyalty.
Today, nine in ten leading marketers agree that personalization has increased profitability within their companies. This is because personalized experiences reduce bounce rates and increase time spent on websites. Customers who see relevant product recommendations are more likely to make impulse purchases as well, increasing overall revenue per visitor.
Increased personalization also brings a significant competitive advantage. It’s important to note that just 35% of companies are currently offering a personalized experience across all marketing channels. That means a brand that consistently offers a customized experience throughout its social media, customer support, and direct marketing channels naturally stands out. Plus, consumers are more likely to remain loyal to a brand that “understands” them, making personalization a powerful tool for gaining market share.
Additionally, thanks to AI, this personalization can all happen in real time. Real-time adjustments prevent missed opportunities by capturing customers at their peak engagement moments, which in turn can lead to higher conversion rates and, consequently, a boost in ROI.
Lastly, there’s the fact that brands that are able to generate data about future customer needs and demand have the advantage in data-driven product development and innovation. Companies can use real-time data on customer purchasing and preferences to minimize the risk of failed product launches and new campaigns.
These are just a few of the ways AI is helping marketers stay more in touch with what their audiences need to drive increased revenue.
The New Face of Digital Marketing
While early adopters of AI for analyzing and predicting consumer behavior have the advantage, anyone who fails to use AI to optimize interactions across channels will be missing opportunities. Fortunately, many marketers are aware of this and are quickly moving to make AI-informed campaigns the norm, which will no doubt cause an even greater impact on digital marketing in the coming years.
