Editor’s Note: This post originally appeared in the Answering AI editorial section of our newsletter. Subscribe to the newsletter to get exclusive insights and resources twice weekly (usually Tuesday/Thursday), as well as select promotions.
Today’s Question: Should AI Pilot Projects Focus on Cost Reduction or Revenue Generation?
There are two primary reasons you should consider seeking AI-powered solutions in your marketing: 1) reduce costs and/or 2) increase revenue.
You achieve cost reduction by completing repetitive, time-intensive activities more efficiently. For example, using AI to autotag hundreds of images on your website or applying machine learning to manage digital media ad spend.
You increase revenue through more personalized and targeted marketing to existing and new customers. For example, AI can improve audience targeting and content/product recommendations.
For many organizations just starting with marketing AI, cost-saving use cases are likely to be the most logical for gaining early wins and executive support. However, according to an MIT Sloan Management Review and BCG report, “Pioneers prioritize revenue-generating applications over cost-saving ones.”
So, as you’re building your marketing AI strategy, look for the obvious opportunities to drive efficiency and reduce costs with intelligent automation. But start developing the near-term vision for how to use AI to grow revenue through improved customer experience and identification of new markets and opportunities.
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Paul Roetzer is founder and CEO of Marketing AI Institute. He is the author of Marketing Artificial Intelligence (Matt Holt Books, 2022) The Marketing Performance Blueprint (Wiley, 2014) and The Marketing Agency Blueprint (Wiley, 2012); and creator of the Marketing AI Conference (MAICON).