How can AI help you prepare for 2023's peak retail season?

As Head of Business Development at 26 and someone with nearly two decades of experience in marketing and new business, I often receive inquiries from businesses like "How can I boost my sales?" or "What are the latest trends in digital acquisition?" Now there's been a growing interest in Artificial Intelligence (AI) and its application in business and marketing.

I had the opportunity to study AI briefly with Oxford University in 2019. Back then, I learned that AI is often considered the holy grail achievable through the convergence of machine learning and deep learning, ultimately leading to human-like intelligent behaviour. Interestingly, Alan Turing's Turing test, designed to distinguish this human-like behaviour, has yet to be passed by the latest AI technology, causing some people to argue that the current notion of AI remains incomplete.

But despite different views on this, in the realm of digital, AI is having a demonstrable impact on marketing functions and effectiveness. So much so, that PwC predicted AI-led marketing will drive 45% of the total global economy by the end of this year.

When investing in AI technologies or practices, here are some key considerations to take on board:

 
Defining its purpose:

While the idea of AI technology replacing jobs is a concern, its current effectiveness lies in human-assisted efficiency and problem-solving. The Boston Consulting Group reveals that companies effectively using AI technology allocate 10% of their investment to algorithms, 20% to technologies, and 70% to embedding AI into business processes and agile workflows. This emphasises investment in people and processes alongside technology. Understanding your business use cases around what you want to improve and what success looks like is crucial.

Data availability and quality:

The challenge often faced is the excitement around data science without enough quality data for meaningful insights. Quality matters, and the amount of data varies by business. A data scientist typically applies the 80/20 rule—80% of time is spent preparing data, while 20% is used for analysis and reporting. This rule underscores the initial cost considerations.

Ethical and legal compliance:

Neglecting ethical and legal aspects is a common mistake when considering AI integration. Evaluating bias, privacy, transparency, and fairness is paramount. Businesses must ensure AI systems comply with relevant regulations, understanding that the machine learns from the data provided.

Having addressed these considerations, it's time to explore potential AI technology implementations for your business, especially in my area of focus—digital media. With the peak sales period around the corner, maximising this period is imperative. Here are my three recommended areas to concentrate on.

Leveraging Google's Performance Max (PPC):

AI technology significantly refines ad campaign audience targeting and bid adjustments. Machine learning by definition is a type of artificial intelligence in which computers use huge amounts of data to learn how to do tasks rather than being programmed to do them. Machine learning makes it possible for computing systems to become smarter as they encounter additional data (Oxford Learners Dictionary). Performance Max engages customers across the full suite of Google properties, unlocking new audiences based on real-time consumer intent and your input using audience and demographic signals. 10/10 quick win for some businesses.

26’s Media Director, David McAndrew, says: “During peak advertising periods, competition is fierce and ad space is limited. Using Pmax campaigns becomes crucial as they automatically adjust bids to secure ad placements across all Google properties, ensuring your message stands out amidst the heightened competition. This targeted approach optimises visibility and engagement, driving higher conversions precisely when potential customers are most active and receptive. As a result, leveraging Pmax campaigns during peak periods can significantly enhance your ROI and help you make the most of the heightened advertising activity.”

Implementing a CRO Strategy:

Conversion rate optimization (CRO) tools gather data about website visitors, enabling insight into user behaviour and testing potential changes to enhance conversion rates. Utilising machine learning-driven tools for ongoing customer experience improvement is crucial. While CRO strategies differ, the goal is to increase conversion rates for competitiveness and profitability. A must this peak especially if you are spending a considerable amount on paid media.

26’s Head of Experimentation, Rich Chapman, says: “Your CRO strategy can already be enhanced through machine learning using Multi Arm Bandit testing. This is where the machine will monitor the results of an ongoing test and assign more traffic to the variation that is statistically most likely to win. This speeds up finding the winning variation and allows more users to see the best version.”

Having a first party data and personalisation strategy:

More advanced, this strategy relies on the availability of internal data. First-party data originates from your audience directly, which can enable a deep understanding of the customer journey. AI technology can aid in content generation, product recommendations, banners, personalised offers and customer service based on individual customer behaviour. Harnessing the latest technology in this area can make the difference in converting a customer that likes to shop around.

26’s Head of Data Science, Maria Thorpe, says: “First party data is ever more important for marketing success and AI technologies substantially reduces the barriers to effectively utilising this across the entire customer journey.”

The realm of data science and AI technology is ever evolving, offering numerous advantages to early adopters or businesses ready to embark on this journey. If you'd like to learn more about these technologies and how 26 can support, please get in touch.