Enterprise Local Marketers Treat AI Hype as Means to an End

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I don’t know about you, but I’ve got at least three invitations to webinars on using artificial intelligence for marketing in my inbox. And last week I went to future of marketing mini-event, sponsored by marketing automation provider Emarsys, that was all about AI and marketing. It seems like any marketing technology that uses pattern-matching or some kind of an algorithm is branded AI these days. While the topic is full of buzz, general-purpose AI is likely years away, though some multi-location brands are applying techniques like machine-learning in a practical fashion on email and audience segmentation.

The Interactive Advertising Bureau last week launched a working group on AI and machine learning focused on identifying prospective customers, fine-tuning creative messaging, and sending marketing messages effectively. They used email as an example of the latter. In contrast, an info and educational site from the agency PR 20/20 (who was a presenter at the Emarsys program) called the Marketing AI Institute, posits that the three best uses of AI in marketing today are channel optimization, marketing content tuning, and auto-generating Google analytics written reports. Whatever turns you on, I guess.

A study of retailers by Forrester Research correlated industry leadership in customer retention and engagement, as well as growth, with having the highest “AI marketing readiness.” 

But Emarsys CMO Allen Nance presented a pretty practical view of applying AI to local marketing. He noted that human-driven personalization doesn’t scale, and today AI means product recommendations and email segmentation-building. In his view, AI for clustering customers based on buying patterns requires at least a partly proprietary data set, unified customer profiles across channels, and pattern recognition. Nance thinks the real test of AI, which is several years away, will be prediction – presenting a customer with the next product he’s going to buy, possibly in an email message.

Street Fight’s research suggests that big brands and retailers don’t have AI high on their local marketing priorities list, or that they think of it as a means to an end. Our latest survey of 250 enterprise marketers asked about which new local marketing and commerce technologies they were interested in exploring in the immediate future. While they’re keen on location data, mobile push, addressable TV, and programmatic ad-buying, AI only made the top three for one in ten of the survey respondents.

So let’s look a little harder at those AI fans. Characteristics of the enterprise local marketers that were interested in exploring AI in the near term include the following:

  • They were among the bigger companies we surveyed. Over 40% had annual revenues of $1 billion or more, and half of those were over $5 billion. They tended to have lots of employees, but no more location than the average enterprise marketer we surveyed.
  • A good portion of these companies were in the health care (21%) and financial services (17%) industries. There were relatively few retailers (12%).
  • Only one-third used paid social media regularly although over half had company pages on social networks. They used email, digital display ads, SEO, direct mail, and print regularly to support local branches. They found email and direct mail their most effective marketing tactics.
  • They’re more effective at customer retention and support than they are at branding or customer awareness.
  • Their digital marketing budgets and decisions are generally more centralized than those of other multi-location brands. That’s especially true for display advertising and mobile marketing.
  • They’re heavier than average users of consumer survey data in their campaigns. 
  • Compared with other enterprise marketers, more of the AI fans said they were increasing spending on email marketing, on local websites, and on mobile. They were slightly less likely to be increasing social media spending, though half said they were doing so.
  • Other than AI, they’re interested in exploring the same new local technologies as the rest of our survey respondents.

I suspected the healthcare companies might be less heavy users of social media marketing for regulatory reasons, but the survey data did not back that up. It appears more likely that these brands are very email- and direct mail-focused, and that’s where they’re thinking of applying AI. That’s actually a smart strategy. But in addition to that, there appear to be opportunities for AI-savvy suppliers to help them with branding and awareness via social media and display advertising, and with personalization on their local websites.

David Card is Street Fight’s director of research.