AI-Driven Market Research: Threats and Opportunities
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Market research has turned into a game of who has the better AI algorithm. Instagram, Netflix, Amazon, and other giants are competing for your attention and money. And AI is doing all of the work. Instead of using large-scale surveys or in-person focus groups, these companies have turned to AI. Should you?
AI-driven market research has its benefits and its drawbacks. It’s a solution that can help you personalize your business toward your customers. But it can also pose cybersecurity and data privacy risks. We’ll do a deep dive into the threats and opportunities that come with using AI for market research. Let’s begin.
The Opportunities
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When you finish a show on Netflix and go to the home page, there’s a section waiting for you titled “We think you’ll love these.” As you scroll through the choices, there’s a percentage match on how sure the algorithm is that you’ll keep watching. It’s a genius marketing strategy, and it works.
When you buy a phone on Amazon, there’s a section where you see what other buyers added to their cart. A phone case, headphones, or an extra charger. Amazon makes it easy for you to keep shopping with its great customer experience. Spotify is the same. Do you want to work out? They’ve got a playlist that will make you feel good while lifting weights, running, or biking.
These big brands keep a careful eye on their users and make personalized lists in an instant. Companies are throwing piles of cash at businesses that can help them offer more customized solutions. This technique improves retention and makes onboarding new customers easier. AI can breathe new life into your business and help you make better decisions through data. Here are the three opportunities where AI-driven marketing can make the biggest impact:
Predicting Customer Behavior
All of the companies we mentioned above have one thing in common—they predict patterns. If 100 people buy a phone and a phone case, there’s a high chance that the 101st will do the same. AI can take consumer data, analyze it, and turn it into actionable insight. Marketers won’t have to pull their hair on how to provide an exceptional customer experience. The algorithm will point them in the right direction.
Personalizing Ads
Twenty years ago, brands thought that everyone was the same. That’s why they used billboards, TV, and radio ads. Now, we know that everyone is different.
Here’s a simple experiment to see why that holds true. Try scrolling your friend, coworker, or partner’s social media feed (Instagram, TikTok, or YouTube). It will feel incredibly boring compared to your feed. The videos will be off-topic, about things you don’t care about, and the ads won’t even make sense.
Social media companies digest mountain piles of data from simple interactions. That helps them optimize and enhance the performance of their marketing campaigns and tailor them for every individual user. With a little help from AI, your business can do the same.
Woman browsing safely for products on the Internet - Image sourced from about.meta.com
Gaining an Edge Over Your Rivals
It’s never been easier and harder to succeed in business. One tweet, comment, video, or post can make you go viral. But how, when, and whether it will happen is a mystery.
The moment you know exactly what your customers like and dislike is the moment you gain a sizable edge over your rivals. That’s where AI comes in. It can easily turn raw data into actionable steps. Focus on fostering an emotional bond for users towards your brand. That’s the only way to survive in this competitive environment.
AI opens the doors of disruption to traditional market research, too. Here are a few examples:
It can find patterns and trends from focus group transcripts, social media posts, and surveys,
It can lead focus group discussions thanks to conversational algorithms,
It allows participants to answer questionnaires in different languages and tailors the experience,
It allows chatbots to converse directly with customers and makes support tickets feel like dialogue,
It can find early signs of industry shifts, disruptions, and trends based on financial data and news.
The Threats
Armed with this information, you might decide to use AI for everything. But that’s a mistake many make. Under-automation and over-automation are divided by a thin line. You can use the power of AI in many ways as long as you’re holding the reins. AI is just an algorithm. It doesn’t have the industry knowledge and expertise of a human being.
With too much automation, you’ll go back to square one. Marketing will feel like a black-box system where a campaign might work or not work, depending on AI. Even the best algorithms have blind spots and limitations. Don’t follow AI blindly and pay attention to these threats:
Security and Data Privacy
In order to come up with a comprehensive result, AI algorithms need to go through loads of data. The process of obtaining data and keeping it under lock and key has been an issue since the internet came about. Cybercriminals want to get a hold of personal data, and cybersecurity experts are doing their best to protect it.
But all of the weight doesn’t need to be on their shoulders. We all can make a difference when it comes to securing our data. Use a VPN and an antivirus, scan files for viruses, don’t click on malicious links, use two-factor authentication, and implement good cybersecurity practices to mitigate the risks.
A computer with cybersecurity icons around it - Image sourced from dataprivacymanager.net
Lack of Expertise
Marketers still don’t have what it takes to become AI experts. The technology is quite new, and most teams are exploring it through trial and error. AI systems go hand in hand with software expertise, monitoring, and configuring. Market research teams today aren’t equipped with that many capabilities, so training and education is a must.
How to Use AI Correctly?
With these threats standing in front of lucrative opportunities, how should you use AI? Here are some guidelines to help you stay on the right track:
Before you plug all of your data into an AI algorithm, sit down with your team and set up success metrics, research questions, and goals. Make sure you hold the reins when it comes to strategy.
You shouldn’t use one AI tool for everything. ChatGPT is a great start, but it can’t do everything. New tools come around every day, from AI-like flipbook makers to image creators.
Share knowledge with your team on best practices, limitations, and critical thinking.
Check the outputs for patterns to avoid biases.
Conclusion
Even though AI has the potential to radically improve your business, human input is still needed to achieve perfect results. It’s truly a game changer for market research and can boost your strategy to new heights.
However, you always need to be in control. AI, when governed correctly, combines the creativity of the human mind and the computational power of a machine. As a leader, you can unlock new truths about your customers that will turn you from a competitor in your niche to a top brand that adheres to client’s wants and wishes.
