Era of Marketing & Artificial Intelligence

Marketing & Artificial Intelligence

The fields of marketing and artificial intelligence converge in systems which assist in areas such as market forecasting, and automation of processes and decision making, along with increased efficiency of tasks which would usually be performed by humans. The science behind these systems can be explained through neural networks and expert systems, computer programs that process input and provide valuable output for marketers.

Artificial intelligence systems stemming from social computing technology can be applied to understand social networks on the Web. Data mining techniques can be used to analyze different types of social networks. This analysis helps a marketer to identify influential actors or nodes within networks, information which can then be applied to take a societal marketing approach.

Artificial Neural networks

An artificial neural network is a form of computer program modeled on the brain and nervous system of humans. Neural networks are composed of a series of interconnected processing neurons that function in unison to achieve certain outcomes. Using human-like trial and error learning methods neural networks detect patterns existing within a data set ignoring data that is not significant while emphasizing the data which is most influential.

From a marketing perspective, neural networks are a form of software tool used to assist in decision making. Neural networks are effective in gathering and extracting information from large data sources and have the ability to identify cause and effect within the data. These neural nets through the process of learning, identify relationships and connections between databases. Once knowledge has been accumulated, neural networks can be relied on to provide generalizations and can apply past knowledge and learning to a variety of situations.

Neural networks help fulfill the role of marketing companies through effectively aiding in market segmentation and measurement of performance while reducing costs and improving accuracy. Due to their learning ability, flexibility, adaption, and knowledge discovery, neural networks offer many advantages over traditional models. Neural networks can be used to assist in pattern classification, forecasting and marketing analysis.

Pattern classification

Classification of customers can be facilitated through the neural network approach allowing companies to make informed marketing decisions. An example of this was employed by Spiegel Inc. a firm dealing in direct-mail operations that used neural networks to improve efficiencies. Using software developed by Neural Ware Inc.

Spiegel identified the demographics of customers who had made a single purchase and those customers who had made repeat purchases. Neural networks where then able to identify the key patterns and consequently identify the customers that were most likely to repeat purchase. Understanding this information allowed Spiegel to streamline marketing efforts and reduced costs.