How Artificial Intelligence is Unifying Marketing and Procurement

How Artificial Intelligence is Unifying Marketing and Procurement

July 05, 2018 | Marketing Blogs


Artificial intelligence (AI) has driven immense benefits in the world of marketing by helping to scale ad operations via programmatic and content creation, predicting future consumer behaviors, smarter search and recommendation engines on websites, and personalized consumer experience.

Recently, with the help of AI, agencies have been able to create cognitive ads. For example, in 2017, MEC worked with IBM Watson in an AI-based campaign for Campbell’s Soup, where personalized recipes were created as display ads for the brand on The Weather Company’s website based on a user’s location.

Over the years, the use of AI in marketing has evolved tremendously. AI has been helping marketing roll out quality ads in a shorter period of time at a lesser cost, all while maintaining high levels of consumer targeting and personalization. These factors are not just beneficial to marketing but also to the procurement function. Has AI then unknowingly become the force set to unify marketing and procurement?     

Evolution of AI in Marketing

In the late 1990s, the use of AI in advertising began with the concept of clustering consumer behaviors to predict future behaviors. Ever since, AI-based clustering and interpreting of consumer data has evolved to become the foundation of using AI for customer segmentation and targeting.  

With the advancement of customer segmentation and targeting, personalization of content grew in importance. However, the cost and pace of the traditional form of content creation was slow, given the high volume of ads. In early 2013, Yahoo’s Automated Insights Wordsmith Platform was developed to scan billions of daily sports-related data and structure the information in AI-generated articles summarizing games and reporting stats.

In 2014, as the number of digital channels grew, AI-based ad buying effectively removed the complex, labor-intensive tasks of researching target markets, budgeting, negotiating prices and issuing insertion orders. As of 2017, approximately $33 billion was spent via programmatic in the U.S.

In 2015, an AI-based search algorithm, RankBrain, was introduced by Google, making advances in interpreting search queries. Through RankBrain, Google has been successful in interpreting the intent behind a user’s search terms, making for a more relevant result.

In 2017, L’Oréal used AI for social listening, through which it recognized images on social media. This enabled the brand to personalize consumer experience by identifying, predicting and forecasting market-wide trends to serve the consumer.

Hidden Benefits for Procurement

Although the evolution of AI within marketing may seem to benefit marketing alone, procurement has gained tremendously as well. AI has helped increase the quality of ads, reduced time to market and the cost of ads. For example, in 2017, IBM stated that its marketing procurement used its AI platform, Watson, to plan and buy online media. Through this, it was able to reduce its cost per click by an average 31 percent, while increasing the quality and efficiency of its ads.

As consumer preferences change rapidly, AI will help to keep up with the ever-increasing pace of change. AI will enable ideas to scale, test and measure more easily and quickly, producing hundreds of possible iterations of an idea instantly.  

Marketers across the globe are savoring the benefits that AI has brought to both marketing and procurement. According to a recent study by Blueshift, 77 percent of the surveyed marketing executives expect AI adoption to grow in 2018. As per a recent report from eMarketer, worldwide spending on AI is estimated to be $6 billion in 2018 and $29 billion by 2021, signaling a trend that marketers are increasingly realizing the benefits of AI in marketing and procurement.

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