In our online retail world, data exists on every consumer, thanks to their browsing habits and social media use. According to Pew Research Center, 69% of American adults are using Facebook, and 74% of those users log in daily, meaning that social media advertising is an excellent way for retailers to reach consumers. Analyzing social media consumer data, and understanding the insights it can provide, is becoming critical for advertisers utilizing these networks.
One of the most cost-effective and time-saving ways to understand consumer data is by implementing artificial intelligence (AI) into digital marketing and advertising programs. AI is a hot topic nowadays, and its use in marketing is already widespread. According to Adobe, 48% of digitally mature brands have an AI strategy and 28% of top-performing companies are using it already.
Hand-in-hand with the industry’s rush to leverage AI’s innovations comes a rise in social media advertising. According to the latest Internet Trends report, referrals to e-commerce sites from social networks have risen from 2% to 6% in the past few years. The report also found that 55% of survey respondents purchased a product after discovering it from social media advertising.
When observing these trends, marketers may have a few questions…
Do increased use of AI, and increased consumer engagement with social advertising, intersect with each other? How can understanding these two trends help online retailers better reach their customers? How has AI already helped brands and agencies in their paid media efforts?
What is AI?
Before we dive in to discussing how AI solutions can be used to benefit social media marketers, it is best to understand what AI is and how it works. The following definitions are from the Brookings Institution:
- Artificial intelligence - AI is a collection of machines that respond to stimulation consistent with traditional responses from humans, given the human capacity for contemplation, judgment and intention. AI can make decisions which normally require a human level of expertise.
- Machine learning - This technology analyzes data and searches for its trends, in the hopes of finding insights within said data. It provides AI systems the ability to automatically learn and improve.
- Data science - This is the study of where information originates, what it means and how it can be interpreted.
How AI analyzes more data than a human ever could
Because of AI, marketers can reach insights they’ve never been able to attain before. One of the reasons AI-based software is so powerful is because it can read through and analyze billions of data points daily. No single person can go through this much data within a lifetime, but with the assistance of today’s technology, marketers are doing it every single workday.
This speed and thoroughness allows the AI to discover trends and outliers in data sets, which were previously unattainable. A data analysis of social media users will find statistically significant trends for marketers to implement in their digital campaigns on networks like Facebook and Instagram.
How it’s shaping marketing: Big retailers are already using AI
AI software is already helping agencies and online retailers optimize their ads in a variety of ways— from improving budget and audience targeting, to determining what creative elements will increase consumer engagement.
For example, online retailer Readers.com and their digital agency implemented AI software on their Facebook and Instagram ads, with the goal of saving money and improving ad conversion. Within two weeks, a deep AI analysis of their ads and audiences yielded Readers.com with 15% higher ROAS, 13% lower CPR and hundreds of more conversions.
Other retailers, like SavageX and Fabletics, have used AI to discover creative branding secrets and deploy these findings across their entire digital marketing efforts. The AI they implemented analyzed over 2,500 visual elements of each social ad, then compared that analysis to billions of other advertiser data points, to determine which creative updates would yield increased ad results and saved time for their creative teams.
No matter which way you look at it, AI is becoming a standard for successful marketing teams across the digital sphere. As advertisers increase their efforts to market using social media networks, industry trends show that it is critical for marketers to embrace AI in their digital strategy.