Getting a good grasp of how people decide which goods and services to purchase or avail is critical in running a business. Marketing teams need information on customer behavior to run well. But before that, they need to gather data first.
Before the age of the Internet, it was a lot more difficult to collect data on customer behavior as the methods back then were inefficient. However, today with almost everyone connected to the Internet and artificial intelligence has become more advanced, ways of gathering customer data and analyzing them have become significantly more efficient and effective.
In the modern setting, most companies and marketing teams use data gathered by artificial intelligence to uncover customers’ behavior on a deeper level. But what is the true extent of AI and how is it being used to understand customers and serve them better?
Artificial intelligence technology and its advantages
Artificial intelligence, simply put, is intelligence exhibited by a machine or a computer per se. The term was first coined in the late 1950s as any activity performed by a machine that would normally require the intelligence of a human being.
Said activities pertain to performing tasks such as reasoning, discovering meaning, generalizing, and learning. The advancement of AI has enabled its use to spread in every industry, ranging from medicine, entertainment, and different aspects of businesses. The developments in artificial intelligence technology have enabled industries to grow faster through innovation.
The appeal of AI stems from the fact that it is capable of human-level thinking along with the advantages of being a machine. Machines are simply faster, less likely to commit errors, and are available 24/7. AI is capable of performing long and repetitive tasks significantly faster and much more accurately than humans.
AI’s role in marketing
Throughout the past decade, AI technology has achieved significant milestones and has proved to be a valuable tool for marketing. Using the Internet, getting a closer look at how customers engage with businesses’ advertisements and products is easier now more than ever. There is so much data available to observe and cater to consumers thanks to AI.
Today, marketing teams must depend on AI in analyzing customer behavior online and offline in order to survive. Amid the pandemic, customer behavior all around the world has changed. People who are wary of ordering groceries, food, and other necessities online now rely on online shopping. What they purchase, how often they purchase it, and the payment method used has also changed.
There are a lot of ways AI has made understanding customer behavior a lot easier. Here are a few examples:
AI can differentiate consumers
The wants and needs of one customer are different from the rest of the consumer base. Each customer belongs to a certain group with similar tastes and preferences. Using customers’ information such as age, occupation, religion, and online activity, AI is capable of grouping customers of similar interests together. This categorization of customers allows businesses to better cater their marketing strategies to certain groups.
AI allows advertisers to know which audience to target
Customers generate data for advertisers all the time by simply browsing the Internet or using online applications. Their online activity is gathered then analyzed by AI, being converted to information that shows what type of people are interested in a certain product or service. Using this information, advertisers are then able to make their ads more effective and worthwhile.
Based on the data, advertisers can create ads that target a specific audience. People who have searched for bags or laptops will get targeted by ads advertising such products. This way, audiences will only get advertisements that are relevant to them. This allows businesses to advertise a certain product or service only to people who are most likely to avail of them.
AI helps businesses understand the needs and preferences of the customers
Artificial intelligence is always collecting data generated by consumers via their online activity. Information such as their needs, their brand preferences, and their expectations are analyzed by AI to help businesses get a better understanding of what their customers want. A good understanding of customers’ wants allows businesses to accurately predict their customers’ purchasing behavior, which in turn, results in the creation of effective business strategies.
AI deep learning and predicting consumer behavior
Deep learning, a subsection of artificial intelligence, is a method of machine learning that allows AI to develop skills and find solutions to complex problems way faster than humans can. Deep learning allows AI to be trained in predicting outcomes based on a given set of data.
An AI with access to a large amount of data and even larger amounts of computing power can be capable of predicting human behavior with great accuracy. Deep learning enables businesses to get the most out of the consumer data they’ve gathered. Integrated into marketing, deep learning opens a lot of opportunities for marketers. The accurate prediction of purchasing behavior means businesses are now able to know what their customers want before they even know what they want themselves.
Without deep learning, AI can only help in analyzing customers’ preferences based on what goods and services they’ve purchased or looked at. On the other hand, AI can take into consideration consumers’ intentions based on other data with deep learning. Through this, businesses can plot personalized marketing strategies and target customers who are most likely to buy their products
AI and Ad Platforms
Why is AI such a good fit for advertising? Ad platforms, which are used for monetizing online activity, provide businesses with plenty of data to use. While humans are more than capable of creating great advertising strategies, gauge its effectiveness, and improve them based on what they’ve learned, they are not capable of processing tons of data with the same speed and efficiency as AI.
The great computing power behind AI allows it to analyze daunting amounts of data in a matter of seconds; data that humans could’ve taken weeks or even months to process. AI can quickly find patterns in big data sets and predict which actions could improve ad performance.