June 4, 2024

Increasing Click-Through Rates by 254%: Why Every Business Needs AI in Marketing

With the marketing industry reaching $1.65 trillion, AI is the secret weapon for businesses to slash costs, boost engagement, and skyrocket ROI.

5 min read

Meet our Editor-in-chief

Paul Estes

For 20 years, Paul struggled to balance his home life with fast-moving leadership roles at Dell, Amazon, and Microsoft, where he led a team of progressive HR, procurement, and legal trailblazers to launch Microsoft’s Gig Economy freelance program

Gig Economy
  • Businesses are increasingly using AI in marketing to automate and enhance the ROI of this $1.65 trillion global investment.

  • Up to 90% of marketing leaders leverage AI to enhance at least one function of their operations.

  • In traditional advertisement, the use of AI in marketing can enhance click-through-rates by 254%

Paul Estes

Dell, Microsoft, Amazon, and several venture-backed startups

The global marketing industry is worth over $1.65 trillion USD. To put that in perspective, marketing expenditure matches the GDP of South Korea, the 13th largest economy in the world. 

With trillions of dollars on the line, businesses around the globe were looking for ways to reduce marketing spend, enhance the cost-per-click of their campaigns, and decrease customer churn. Artificial intelligence has emerged as a solution to most common marketing problems recently.

Over 90% of marketing leaders expect to use AI often over the next two years. Using AI in marketing can increase revenue by 3-15% and improve the ROI of marketing campaigns by as much as 20%; it’s not hard to see why.

AI in marketing can integrate into everything from lead identification and strategy optimization to marketing analytics and personalization efforts. 

Source: Estimated impact of use cases of AI in marketing.

AI In Marketing: How Artificial Intelligence Is Sweeping the Industry

The marketing industry has become increasingly data-driven over the past two decades. Relying on the constant influx of data, marketing is prime for AI integration. As many as 88% of companies use AI for data processing in marketing, with 90% using AI to enhance customer interactions.

Here are a select handful of problems that marketing departments are encountering that artificial intelligence could solve:

  • Impossible Volumes of Social Media Data for Analysis: With millions of social media posts flooding the internet daily, marketing teams can't manually keep up with the tide of information. Artificial intelligence tools can analyze vast data, providing insight into emerging trends, ideas, and sentiments. Marketing teams can use this insight to create high-ROI marketing campaigns that audiences love.
  • Inability To Personalize at Scale: Personalization has been a leading marketing strategy for several years, enhancing ROI and improving engagement. Yet, scaling the production of personalized content is costly and challenging for marketing teams. In marketing, AI provides an automated system to analyze customer data and produce highly personalized content that drives engagement. This is especially effective for offering personalized product recommendations and enhancing the customer experience.
  • High Churn Rates: Marketing teams are responsible for keeping their customers satisfied. Marketing teams need help identifying which customers will likely churn before it's too late. Businesses can use AI to analyze data and recommend target customers in marketing to enhance customer retention efforts and reduce customer churn.

AI in marketing solves many of the field's most pressing issues, like low engagement, and creates feasible strategies for enhancing data-driven processes.

Mastercard: Mastering Trends in Social Media Interactions with AI

The 2023 Social Media Industry Benchmark Report suggests that businesses worldwide struggle to stand out with organic traffic. For another consecutive year, brands are seeing less organic engagement. With less engagement, companies have to spend more on paid forms of advertising and see conversion rates decrease, hurting their bottom lines.

Raja Rajamannar, Chief Marketing and Communications Officer of Mastercard saw Mastercard’s declining engagement rates and decided to do something about them. Considering that upwards of 50% of people use ad blockers to altogether bypass all paid ad formats, he sought a solution that would enhance organic engagement. 

The team at Mastercard launched the Mastercard Digital Engine, an artificial intelligence system that trains on and engages with social media data. The Digital Engine analyzes billions of conversations across social media sites like Facebook and X (formerly Twitter). 

Using natural language processing, it collected micro trends that were beginning to establish themselves. Examples ranged from small rises in the desire for contactless payment options to an increasing interest in certain foods—nothing was too small to notice.

By informing the Mastercard marketing team about these trends, they could engineer a campaign with a high chance of success. Mastercard created a highly personalized and contextually relevant campaign that discussed the celebrity by noticing a spike in user activity around a particular celebrity.

This strategy, led by AI in marketing, delivered a 254% higher click-through rate than typical campaigns over a two-day marketing campaign. This form of organic marketing allowed Mastercard to achieve an 85% reduction in cost-per-click while delivering 100% higher engagement rates.

Across the board, Mastercard turned its social listening AI engine into the perfect informant. Discovering micro trends before they hit the mainstream gives marketing teams time to create expertly crafted campaigns that audiences will love and inspire clicks. 

With this form of AI precision marketing, teams can always stay one step ahead of their audiences. 

L’Oréal: Personalization and Content Recommendation to Enhance User Engagement

L’Oréal is the largest cosmetics company in the world, with revenues of over 44.5 billion dollars each year. With a world-class marketing team, the beauty titan understood the power of personalized marketing. However, limitations in technological implementation meant that personalizing each user experience was too costly, requiring an investment of capital and marketing team time.

To solve this marketing issue, L’Oréal is turning to generative AI. The beauty brand has recently launched a personal beauty assistant, acting as a user experience companion for everyone who shops with the brand. By training the AI model on vast amounts of company data and customer service interactions, it can perform the following tasks:

  • Use computer vision and AR to allow customers to try different products on their faces and skin.
  • Answer any questions related to the products while personalizing each interaction with customers.
  • Provide personalized diagnostics and product recommendations for each individual user. 

Across the board, L’Oréal’s launch of AI personalization tools will help to enhance customer experiences and provide every single client with a winning experience. Commenting on this, the Deputy CEO of Research, Innovation, and Technology at L’Oréal states,

"Having pioneered beauty tech for years, we are firm believers that technology can push the boundaries of what's possible for beauty to improve the lives of people around the world. With advanced diagnostics, augmented beauty services, genAI assistants, augmented creativity in the genAI era, and breakthrough electronic devices, we are shaping the beauty of the future to be more personalized, more inclusive, and more responsible.”

Considering that 70% of consumers in the beauty industry are overwhelmed with product choices, L’Oréal’s launch of the AI assistant software will help to deliver personalized service and recommendations, solving this widespread issue.

L’Oréal’s use of AI in marketing is far from limited to this recent development. Generative AI has been instrumental to the marketing team over the past few years, helping to reduce the time and resources consumed in photoshoots and within video generation. 

PayPal: Enhancing Profits and Reducing Customer Churn with AI in Marketing

PayPal is one of the largest global payment platforms, covering 203 markets and having over 173 million active customer accounts. This international brand generates profits by charging small fees on the 4 billion payments it processes yearly. To keep those profits high, PayPal has to reduce customer churn where possible to keep customer transactions flowing.

Commenting on this, PayPal’s Senior Data Scientist, Julian Bharadwaj, states that:

“PayPal needed to redefine the metrics the company associated with churn. In addition, marketing and product teams needed more accurate, actionable information to help them run campaigns to retain or reactive customers.” 

To enable this strategy, PayPal needed to process substantial customer data simultaneously. Turning to AI as the solution, the team created a predictive model. Using this AI system, PayPal could rapidly collate and process customer records, noticing potential markers indicating a higher likelihood of churn. 

Armed with this knowledge, marketing teams were able to pinpoint customers who were more likely to churn and begin retention efforts as early as possible. These marketing programs were proven to reduce churn, but they only worked when marketing agents could reach customers ahead of time and retain them.

Before the AI integration, analyzing a subset of customer data took 6 hours, followed by 72 hours to alert marketing agents and activate retention strategies. Now, using AI, the analysis process takes 10 minutes, and sending out alerts to marketing teams takes another 5 minutes. 

By using AI in marketing to prevent churn, PayPal reduced the time it takes to launch retention strategies by 99.68%. This incredible efficiency gain transformed PayPal’s customer retention strategies, providing a clear pathway for marketing teams to reduce churn and keep profits high. 

AI in Marketing Drives Profits, Reduces Churn and Creates Sustainable Business Growth

The vast majority of marketing functions rely on data. Everything from analyzing search engine data to conducting target customer analysis stems from access to enormous information pools. Marketing teams worldwide can leverage artificial intelligence to enhance processes, streamline data processing and analysis, and create more effective campaigns.

AI facilitates better business practices in every marketing area, from deploying customer retention strategies to creating data-driven marketing campaigns. AI in marketing is a revolutionary technology, bringing a new era of precision and impact. 

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