Daniel Faggella is an Entrepreneurs' Organization (EO) member in San Francisco and founder of TechEmergence, an artificial intelligence market research firm. We asked him which businesses will benefit most from adopting AI marketing technology―and when. Here's what he had to say.
Just mentioning the words artificial intelligence (AI) prompts a certain anxiety in business leaders. On the one hand, the whole idea seems a little "far out," and business will clearly go on (at least for today) without it. On the other hand, maybe there are advantages to this technology that a competitor might leverage to eat our lunch.
Let's push past the hype to reveal which businesses might benefit from AI marketing applications in the near-term, and which businesses have time on their side before they need to dive in.
There are two primary criteria that a business must meet to fruitfully utilize AI in their marketing efforts today:
- Digitized, trackable marketing and sales processes
- In-house AI or data science talent
1. Digitized, Trackable Marketing and Sales Processes
Companies looking to leverage AI in their marketing efforts must have a large volume of information with which to train their AI systems. An AI system operates through machine learning and cannot calibrate and optimize results―including click-through rates, opt-in rates, lead scoring and sales script prompting―without a strong stream of information to help it learn "wins" from "losses."
That brings us to the first criterion for deciding if your business should consider adopting AI in marketing now: Can a significant portion of your marketing and sales touch-points be tracked, recorded and organized in digital format?
In other words, can you access a full record of email and phone interactions plus time-stamped touch-points along each individual sales contact's journey? That would mean that most critical engagements with the company―such as content dwell-time, page views, email interactions and sales call results―"leave a trace" from which we can derive a data stream.
Companies in eCommerce and online media or advertising―think Amazon and Facebook―have already benefitted tremendously from AI marketing, giving us evidence that those two sectors will be the technology's first major beneficiaries.
2. In-House AI or Data Science Talent
If you have massive amounts of trackable data to "teach" your AI system, you're halfway there. Here's the second criterion: Does your company have a department with genuine data science experience or possibly even hands-on experience in AI or machine learning?
If you don't have AI or data science talent in-house―most companies likely don't―it simply isn't time for you to adopt AI in marketing.
If you're a small accounting firm, mom-and-pop eCommerce business or marketing agency that believes your marketing dollars are best spent on tinkering with a build-it-yourself chatbot tool, you are mistaken. If you believe there is a tool that―without any specialized calibration or understanding―can double your pay per click (PPC) results by using AI's magic, you are again mistaken.
The present hype cycle of AI has left us not only with inflated expectations but also with a misunderstanding around the necessary skills required to make the present technology deliver financial results. My intention in writing this article is to "cool off" the hype―at least for most businesses, and for nearly all small businesses.
Why You Should Stay Tuned
Given the current state of the technology, most companies―and nearly all small businesses―will not be profitably leveraging AI marketing in the next two years. The fact that AI marketing isn't available for everyone right now should take pressure off of executives and marketers who have a lingering feeling that they're being left behind.
However, don't tune out completely. AI has huge potential for marketing applications, and over the next two to five years, we'll see more and more user-friendly tools that don't require the huge data streams and high-level AI skills I've identified here. Like most technologies, the first versions will be challenging to work with and will be tested by big players who can afford them. Sooner or later, however, they will become more accessible, eventually even to small businesses.
I offer a new litmus test to determine the best time for your business to jump into the AI realm: Research companies that offer similar products and services to yours―but that are five to ten times larger. When you find strong evidence that larger, similar firms are gaining strong ROI on AI marketing efforts, it's time to seriously consider adopting the technology.
If no such companies seem to be leveraging AI successfully, don't feel pressure to adopt a technology that seems cool but doesn't help you achieve your business goals.