Artificial Intelligence in Marketing: The New Trend?
1. Overview
The application of Artificial Intelligence (AI) in business operation has attracted the attention from researchers and practitioners from various industries. It is undeniable that AI in marketing is currently gaining importance, due to increasing computing power, lower computing costs, the availability of big data, and the advance of machine learning algorithms and models. From a strategic perspective, companies such as Google, Rare Carat, Spotify, and Under Armor are among the expanding list of firms enhancing their performance through the adoption of AI-based platforms (such as Microsoft Cognitive Services, Amazon Lex, Google Assistant, or IBM Watson). This approach increases their customer interaction across marketing channels and improves market forecasting and automation. Consequently, AI has been recognized as the most influential technology for business, with expected growth from $10.1 billion in 2018 to $126 billion by 2025.
2. The application of AI Marketing in the world
The automation of marketing process has become common practice since about 2001 when collecting big data gained in importance. For example, customer databases or clickstream data which is a record of the customer’s navigation between various websites have been used as powerful resources for many marketing decisions. Thanks to the advent of AI, nowadays, there already is a multitude of potential application for algorithmic marketing. For example, AI can observe and analyze consumer behaviors, chatbot can observe the course of conversation and analyze them to obtain more information about the market and the customers. Such information and analysis are critical for marketing strategy. In fact, the bots can also make good use of information to target, segment different group of potential customers, predict factors and effects influencing the marketing activities based on predictive modelling, etc. The control phase at the end of the marketing process can be performed in both a qualitative and quantitative way and is essential to determine the reach of the campaign, marketing budgets, customer satisfaction, market shares and sales.
The benefits of AI in marketing are undeniable, it indeed contributes values to firms by generating strategic insight, save cost and time for marketers. In fact, marketers spend less than 20 percent of their time on high-value work. They used the other 80 percent on other tasks, like meetings, administration, and responding to emails.
Marketing Matrix (see Figure 1) showed that Advertising/Keywords Bidding, Marketing Automation are among the most common marketing activities driven by automated AI, though their impacts on business are not really significant. Lead Prediction, Fraud Detection and Cross/Upselling are the highly AI-automated activities and are also contributing values to business success. In the case of augment applications, it is especially matter of intelligent support and enrichment of complex and creative marketing tasks that are currently still performed by human actors. AI can support the marketing team in media planning or in the generation of customers insight. The automation and augment characteristics of AI Marketing really help firms to save time and effort from repetitive tasks, the customers insight generated objectively, eliminating bias, thus towards effective, precise decision-making process.
Figure 1: AI Marketing Matrix
One of the practical examples of Algorithmic Marketing application is Bosch Siemens Haushaltsgerate (BSH). The company manages the entire process from generation, capturing, analysis and uses of its online product reviews and ratings. By way of these automatic rating and review analyses, customer reviews can be examined in both in terms of quality and quantity and be used in a meaningful way for sustainable increases in turnover. As a result, BSH revealed that products with positive reviews achieve 30% sales increase thanks to the insights.
3. Vietnam AI Marketing
• Current maturity stage of AI Marketing adoption in Marketing
In Vietnam, AI has been strongly applied in many fields such as healthcare, education, agriculture, transportation, e-commerce… AI technology has also brought Vietnam a remarkable development in recent times. In Marketing field, some common practices are product recommendation system built on the basis of customer insight generated from customer transaction, search journey, product reviews, etc. and are mostly applied by E-commerce platforms. For example, Shopee’s sophisticated system powered by AI technology embedded into its mobile app collates data on shoppers’ past browsing and purchasing patterns, and that information is used to push relevant products through Shopee’s Feed and Daily Discover features. In addition, in a similar way, data provides Shopee’s brand partners with relevant insights to identify consumer behavior, which in turn supports vendors’ inventory management.
Chatbot is also among the common AI applications and is widely used by various sectors from banking, retail to tourism, etc. However, the essence of Chatbot in Vietnam is still limited as it can only operate and engage with customers according to pre-programmed frequent asked questions but yet to understand specific questions to create a natural conversation. Finance-Banking sector is as well increasingly using machine learning to build more accurate and faster forecasting models. These predictions help banks leverage existing data to identify trends, identify risks, save manpower and ensure better information for future planning.
• Case study: CHATT.AI
Chatt.AI – a leading startup in the field of artificial intelligence technology has become a partner in many large advertising campaigns. The company specializes in intelligent conversation with advanced chatbot that can remember and understand customer needs based on any question the user asks, creating a more natural conversation. Not only stopping at communicating with users in a rigid way, Chatt.AI advises and provides solutions to help brands interact on touch points in the customer journey through a virtual character that is capable of capturing context to communicate flexibly. Oppo – one of the most popular mobile brands in Southeast Asia has gained significant improvement by applying Chatt.AI in customer services. Chatt.AI has reduced the workload for the Oppo customer services team by 70% while increasing user satisfaction by 30% thanks to the speed and quality of the response content.
4. Opportunities for Vietnam AI Marketing
In short, in can be observed that the adoption of AI Marketing in Vietnamese firms is still in the early stage, which play a role in augmenting decision-making process. Algorithms can make partial decisions but still need human involvement to make final decisions. Compares to other companies around the world, this technology still has a long way to go to get closer to domestic companies. The application of AI has only been popularized in large enterprises but the potential in marketing field is yet to be fully exploited. In fact, there are only 10 conglomerates who operate in AI application, such as VNPT, VNG, FPT, Viettel, etc. together with 65 other SMEs and Start-Ups. There are still opportunities for new entrants as in the future, the demand in AI marketing is expected to increase. Especially, as the FMGC market is currently in its mature stage, many players are seeking for digital solutions to cut cost, gain competitive advantages and synchronize, enhance efficiency in operation, AI will be one of the critical solutions to achieve those gains, especially in the marketing process.
Hebronstar Strategy Consultants
Tham Huy Truong / Business Analyst
