From tailored product recommendations to content delivery, AI-powered personalisation communication has emerged as a game-changer in the marketing realm, enabling brands to deliver messages to individual consumers at scale. 92% of businesses are believed to be utilising AI-driven personalisation to enhance revenue and growth, as stated by Algolia, a proprietary search-as-a-service platform. “I think personalised marketing is a silver bullet for a multi-pronged problem that digital platforms face today – customers want great but inexpensive service without being bombarded by irrelevant marketing, marketers want maximum outcomes for any rupee that they spend, and platforms want to grow fast while also being profitable. Personalised marketing can improve customer experience, give measurable outcomes or performance to marketers, and help the platform make more marketing revenue,” Siddharth Jhawar, GM, Moloco India, a machine learning (ML)-based advertising solutions company, told BrandWagon Online.
The international AI-based marketing market is predicted to clock $36 billion worth of revenue in 2024, as specified by Statista, a data and business intelligence platform. Moreover, the valuation of the same market is expected to reach $72.1 billion by 2030, at a 24.5% compound annual growth rate (CAGR) during 2023-30, according to Zion Market Research, a market intelligence firm.
From basic targeting to precise….
As per market reports, applications of AI’s usage in personalised marketing include big data evolution, which involves AI-based predictive analytics and propensity modelling, personalised content, for drafting customised marketing campaigns, personalised email marketing, to enhance engagement between brands and customers, and chatbots, in order for a virtual assistant to help customers with their demands. Claims made by industry executives stated that AI’s utilisation led to a 40% rise in customer service, as specified by PricewaterhouseCoopers (PwC), an accounting and auditing firm. In 2024, while many companies will find attractive ROI from GenAI, only a few will succeed in achieving transformative value from it, PwC stated. The firm further mentioned that a year after the introduction of ChatGPT, a chatbot developed by OpenAI, it found that over half of its examined companies (54%) directed generative AI (GenAI) for specific business regions. “I believe AI integration has fundamentally transformed traditional advertising by introducing automation, enhanced targeting, and real-time optimisation. AI algorithms can analyse vast amounts of data to identify patterns and insights that inform advertising strategies. This has the potential to lead to efficient media buying, dynamic content creation, and improved return on investment (ROI). Traditional methods that relied on broad demographic targeting are understood to be replaced by AI-driven personalisation that considers individual user preferences and behaviours,” Sachin Modi, co-founder and CEO, Vhub.ai, an influencer marketing platform, highlighted.
Since the time AI started to become prominent for marketing, chatbots have seemingly taken up the role to drive the area’s personalisation factor. 64% of customers showed a desire towards chatbots for their round-the-clock presence and swift replies, according to data presented by Salesforce, a cloud-based software company. As per media reports, roughly four-fifths of business buyers anticipate companies to engage and interact with chatbots, highlighting the rising demand for real-time assistance in customer service. A study conducted by McKinsey & Company, a strategy and management consulting firm, unveiled the potential of AI-based personalised recommendations, showcasing a 300% increase in conversion rates. Noteworthy illustrations include the strategies deployed by industry companies such as Netflix and Amazon, where the integration of AI algorithms has developed the delivery of tailored content and product suggestions to their audience. “AI-powered personalisation can be seen in forms such as programmatic advertising, personalised email marketing, and dynamic website content. For instance, Netflix and Amazon use AI to recommend content and products based on user behaviour. Similarly, brands leveraging platforms can execute influencer marketing campaigns where AI selects the best influencers based on audience insights and predicted engagement, ensuring that the content reaches the most relevant audience,” Modi added.
Brands tapping into AI personalisation
Nowadays, as far as brands are concerned, AI’s usage for personalised marketing is understood to have become the ‘make or break’ factor. 91% of customers have shown a preference towards going for brands which provide suggestions that are more suited to their demands, with regard to insights from a study by Accenture, a professional services company. The difference, between a brand converting a customer into a potential marketing lead, can be one AI-based personalised marketing campaign away. Data has shown that 45% of customers expressed doubts over continuing with a brand if it doesn’t personalise their recommendations, with 27% stating their decision to completely drop the brand, as per Twilio Inc, a cloud communications company. In response to this demand, brands such as Amazon, Netflix, Sephora, and Spotify are believed to have inculcated AI-based personalised marketing methodologies to cater better to their customer needs. “Over-the-top (OTT) platforms monitor a user’s watch history and make recommendations by integrating AI personalisation. E-commerce platforms leverage AI-powered recommendation engines to suggest products and services to users based on their past purchases, browsing history or interactions with similar products. AI also aids in the process of predictive lead scoring wherein marketers are able to identify and focus their advertising efforts on the high potential leads that are likely to convert into customers and maximise ROI. Additionally, AI is also revolutionising the paradigm of contextual and behavioural advertising. These mechanisms help analyse user’s context like current location, time of the day and web page contents to deliver personalised ads,” Delphin Varghese, co-founder and chief revenue officer, AdCounty Media, a digital marketing agency, emphasised.
For instance, Netflix uses AI to find patterns in the type of content users are consuming, for them to suggest the content of similar genres, which has caused an upward trajectory in their user engagement. Other platforms such as Amazon and Spotify make use of AI to create personalised product recommendations and personalised playlist recommendations, respectively, after studying user behaviour. Moreover, Sephora uses AI-oriented digital try-on technology to provide customer suggestions on makeup products. Coca-Cola, considered a fan-favourite brand, has devised ways to utilise AI for personalising marketing campaigns to appeal to different geographies based on cultural trends. Meanwhile, Meta which claims to have a suite of AI based marketing tools stated that its AI content creation characteristics have bettered advertising results, along with 40% of Instagram users viewing AI-based content suggestions. Furthermore, it claimed that the AI recommendations have increased user engagement by six percent on Instagram and seven percent on Facebook.. For Google, its AI capabilities can empower marketers to craft personalised user experiences. One such product which Google has developed is its Performance Max , which is a goal-based campaign type that allows performance advertisers to access all of their Google Ads inventory from a single campaign. It’s designed to complement your keyword-based Search campaigns to help you find more converting customers across all of Google’s channels like YouTube, Display, Search, Discover, Gmail, and Maps. “Today, I believe almost every online marketing campaign relies on AI for real-time targeting and placement across digital destinations. Platforms such as Google Ads and Meta Ads use AI to micro-segment audiences and deliver personalised experiences. Furthermore, AI can enable Indian brands to keep pace with the sheer volume of data generated by digital ad platforms, processing it in real time to inform decision-making and campaign optimisation,” Harmeek Singh Anand, digital marketing manager, Vesta Elder Care, a home health care service, said.
However, the point of discussion, especially in a country like India, is believed to be the amount of costs directed towards AI-based personalised marketing, which is mainly represented as digital marketing. For digital marketing, the expenses for search engine optimisation (SEO) in India can range from Rs 5,000-50,000, along with 15-25% of one’s pay-per-click (PPC) budget getting directed towards management costs of the agency responsible for running the campaigns, as stated by Tactyqal Labs, a business management consultant. In addition to the costs outlined by Tactyqal Labs, it’s essential to consider the implications of these expenditures on businesses across sectors. As AI-based personalised marketing becomes prevalent, companies must assess not only the financial aspects but also the long-term strategic implications. Moreover, the effectiveness of these investments in driving tangible outcomes, such as increased brand visibility, customer engagement, and ultimately, revenue growth, warrants careful evaluation. Amidst these considerations, businesses are expected to strike a balance between leveraging cutting-edge technologies and managing expenditures to ensure sustainable growth and competitiveness in India’s digital landscape.