Digitalization has enveloped most parts of the world, causing significant impact in the workflow of sectors, and digital marketing is no exception.
Digital marketing is poised at offering streamlined marketing cues in the digital space to capture desired audiences for brands. This niche, however, has gained wider reach and efficiency levels with AI.
Integrating AI in digital marketing has remodeled operational marketing approaches, presenting robust opportunities for digital marketers to optimize effectiveness. Hence, understanding AI’s transformative abilities becomes a necessity.
AI in Customer Segmentation
Customer segmentation is a crucial customer service function that compartmentalizes customers of a given brand or company into groups or categories.
This is tailored according to different criteria such as demographic, geographic, psychographic and behavioural patterns aimed at designing suitable marketing strategies and product advancement, channeled to the right segment.
While traditional methods only depend on demographics which is limiting, customer segmentation with AI advances the method through behavioral analysis and predictive analytics.
Also, through machine learning, the utilization of system algorithms to analyze data, based on patterns without human instruction, is achieved. This technique has enabled appropriate segmentation of customers based on their preferences, behaviours and other potential tendencies.
Most evident in this case is Konga, one of Nigeria’s renowned e-commerce platforms, where through the adoption of AI’s customer segmentation – machine learning, a holistic analysis of her user’s behaviour to ensure proper categorization of customers is bagged.
The categorization take in forms such as frequent buyers, occasional shoppers, and first-time visitors. This impressive approach resulted in a 20% increase in customer conversion from Konga’s campaigns (Konga Annual Report, 2020).
Yet another proof that AI and its advancements gives a boost to digital marketing, allowing for maximized efficiency.
Personalized Marketing with AI
Asides being a branch of customer segmentation, personalized marketing is customer specific in nature and follows the keen engagement of customers according to interaction with a given brand, further developing loyalty and conversion.
With AI, digital marketers leverage the opportunity of personalizing data and content with the use of Natural language processing (NLP) and machine learning models that studies and aligns patterns of customers to personalizing email drafts, product recommendations, and website content, fitting into customers interests.
Typical of this setting is telecommunication companies like MTN, Airtel and Glo who use AI to personalize marketing content through data analytics; where customers on an individual level are analyzed on how they use, respond and interact with the brand.
This helps to know customer preferences in exact, personalizing cues such as sending personalized offers and promotions via SMS and emails becomes easily exerted. AI has set the ground rolling for personalized marketing, making the approach unique for increasing customer engagement and gauging standard feedback for brands.
Predictive Analytics for Consumer Behaviour
Predictive analytics is an AI function that affords marketers the luxury to predict the behaviour of a customer, further customizing solutions to their needs ahead of time.
The proactivity of this model analyzes data of a customer’s history and form opinions that could shape the future outcomes of that customer including preferences and buying patterns.
This is yet another AI tool that makes digital marketing easy for marketers. All they need to do is to collate at a surface level and apply human method of enactment for each prediction.
A case study under this is another popular e-commerce venture in Nigeria, Jumia. The Jumia team implemented AI’s predicative analysis method to predict sales and the trends that may surface in prospective times.
This was done through intense analysis of past sales and customers’ top searches on the website. The result of this analysis marked a 15% reduction in stockouts and a 10% increase in sales at peak days all because of optimized campaigns (Jumia Annual Report 2021).
Optimizing Ad Spend with AI
Advertising is crucial for any business, even when it’s not profit-centered, its impact to create awareness and duly inform targeted audiences cannot be underestimated.
However, it’s important to control the amount of resources poured into it, considering that the venture is no way close to being cost-effective.
Through AI, ads can be optimized and placed strategically in online spaces that would attract a target audience. This is very effective to enhance return on investment (ROI).
The place of programmatic advertising platforms performatively use AI to make the buying and placement of ads automatic. Not only making the process easy but also ensuring that ads are well filtered and tailored to reach its right audience at the right time. In recent times, Nigerian digital advertisers are left with no choice but to adopt programmatic mode of advertising using AI powered platforms like Ad Dynamo that operates with real-time bidding (RTB) procedures, giving the chance of ad placements to be optimized across various digital mediums. Surely, the waves for increased brand awareness and performance of digital marketers becomes assured (Dynamo Report, 2021).
Challenges and Considerations
Even when AI appears flawless with its benevolent offerings, it has some downsides. These downsides sometimes overwhelm digital marketers, hindering them from tapping into the full potentials of AI.
They include:
- Data Privacy and Regulation: The utilization of AI tools for digital marketing threatens privacy rights of companies and her customers. Essential data and information meant to be kept within the databases of companies may be easily breached and exploited, endangering the livability of these companies. To mitigate this challenge, Nigerian digital marketers are therefore advised to adhere to the data protection regulations such as the Nigeria Data Protection Regulation (NDPR) as this would ensure that data are collected with ethical approvals and are well secured in unreachable cyber channels.
- Investment in AI Technology: Investing in AI is quite expensive. Its infrastructures are sophisticated and might not be sustained by average businesses for long. Considering the weight of what one might need to acquire for full blown operation, one might want to reconsider other options as ROI varies and might not align with timelines for companies. To defeat this challenge, marketers are advised to invest in alternate data-driven solutions or partnering with technology providers to ease the capital stress for acquisition and maintenance.
- Skill Development: AI is vast and magnificent, marketers may have little or no knowledge on how to navigate some systems when needed. This lack of technical know-how is a problem and limits the efficiency of AI amongst Nigerian digital marketers. The need for continuous training and education becomes pertinent in order for marketers to equip themselves with the necessary skills to facilitate operational development.
Conclusion
The invention of AI as a digital tool is astoundingly brilliant. It’s no surprise it has occupied the heart of operations for most sectors, digital marketing inclusive.
Its potentials are transformative for digital marketers, enabling them to offer enhanced customer segmentation, personalized marketing, predictive analytics, customer optimization and control of Ad spend.
Despite its glimmering benefits come several challenges such as data privacy, investment unaffordability, and skill gaps which are crucial for digital marketers to overcome.
AI is powerful, leveraging its strengths is advised as it assures effective and significant changes especially as it concerns Nigerian digital marketers. Seeing through a situation where their marketing campaigns and solutions would spring instant ROI, improving performances and standing grounds with competitors on a global landscape.
The Writer:
Hilary Utuke is the CEO of Korlod Works, a top Digital Marketing firm in Lagos. He’s authored four books including “Digital Strategies for Online Brand Visibility” and created Digital Luminary Pro (TM), a model helping Nigerian Thought Leaders connect with Millenials and GenZ audiences.
