Artificial intelligence in marketing

Artificial intelligence in marketing

Artificial intelligence marketing (AI marketing) is a form of marketing that uses artificial intelligence concepts and models such as machine learning, natural language processing, and computer vision to achieve marketing goals. The main difference between AI marketing and traditional forms of marketing reside in the reasoning, which is performed through a computer algorithm rather than a human. Each form of marketing has a different technique to the core of the marketing theory. Traditional marketing directly focuses on the needs of consumers; meanwhile some believe the shift AI may cause will lead marketing agencies to manage consumer needs instead. AI is used in various digital marketing spaces, such as content marketing, email marketing, online advertisement (in combination with machine learning), social media marketing, affiliate marketing, and beyond. == Historical development == AI in marketing has a long history, which goes all the way back to the 1980s. At this time, AI research was focusing on expert systems and robotics. Despite the initial research and the studies that were carried out, AI adoption remained limited. Research on it came to a stop for a while, until research was revived two decades later with the advancement in technology, the rise of big data, and a significant increase in computational power. Eventually, AI became very popular in the marketing world, and caught the eyes of many researchers as well as professionals. A large‐scale bibliometric study covering 1,580 peer‑reviewed papers published between 1982 and 2020 confirms that scholarly output on AI in marketing has surged since 2017, with Expert Systems with Applications emerging as the most prolific outlet. Prior to the application of artificial Intelligence in marketing, there was something called "collaborative filtering". This was used as early as 1998 by Amazon, and one of the first ways companies predicted consumer behavior, which enabled millions of recommendations to different customers. Personalized recommender systems are now widely used, for example to suggest music on Spotify, or TV shows on Netflix. A big milestone in AI marketing happened in 2014, when programmatic ad buying gained much greater popularity. Marketing consists of numerous manual tasks such as researching target markets, insertion orders, and managing high budgets as well as prices. In order to cut costs, and remove the need for these tedious tasks, many companies started to automate the marketing process with AI. In 2015, Google introduced RankBrain, a machine learning component of its search algorithm designed to interpret the intent behind user queries. RankBrain was followed by further AI-based search updates, including BERT in 2019, which improved the understanding of conversational queries, and the Multitask Unified Model (MUM) in 2021, which is multimodal and processes information across 75 languages. These advances shifted search engine optimization practice away from keyword matching toward content that satisfies user intent. Artificial intelligence is increasingly used in marketing to personalize user experiences and automate decision-making. For example, Netflix uses AI algorithms to recommend content based on viewing history, while Sephora employs chatbots to assist customers with product selection and availability. Programmatic advertising platforms like Google Ads leverage machine learning to optimize bidding strategies and target audiences more effectively. These applications demonstrate how AI enhances efficiency, engagement, and conversion rates across digital channels. === 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 tha 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. == Tools and uses == 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 NeuralWare 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. Sales forecasting “is the process of estimating future events with the goal of providing benchmarks for monitoring actual performance and reducing uncertainty". Artificial intelligence techniques have emerged to facilitate the process of forecasting through increasing accuracy in the areas of demand for products, distribution, employee turnover, performance measurement, and inventory control. An example of forecasting using neural networks is the Airline Marketing Assistant/Tactician; an application developed by BehabHeuristics which allows for the forecasting of passenger demand and consequent seat allocation through neural networks. This system has been used by National air Canada and USAir. Neural networks provide a useful alternative to traditional statistical models due to their reliability, time-saving characteristics and ability to recognize patterns from incomplete or noisy data. Examples of marketing analysis systems includes the Target Marketing System developed by Churchull Systems for Veratex Corporation. This support system scans a market database to identify dormant customers allowing management to make decisions regarding which key customers to target. When performing marketing analysis, neural networks can assist in the gathering and processing of information ranging from consumer demographics and credit history to the purchase patterns of consumers. Predictive analytics is a form of analytics involving the use of historical data and artificial intelligence algorithms to predict future trends and outcomes. It serves as a tool for anticipating and understanding user behavior based on patterns found in data. Predictive analytics uses artificial intelligence machine learning algorithms to recognize and predict patterns within data. Machine learning algorithms analyze the data, recognize patterns, and make predictions through continuous learning and adaptation. Predictive analytics is widely used across businesses and industries as a way to identify opportunities, avoid risks, and anticipate customer needs based on information derived from the analysis of user data. By analyzing historical customer data, artificial intelligence algorithms can deliver relevant and targeted marketing content. Recent systematic reviews show that generative large‑language models such as GPT‑3 and GPT‑4 are now routinely embedded in predictive‑analytics pipelines to mine unstructured market data and anticipate customer intent with greater precision. Personalization engines use artificial intelligence and machine learning to provide content or advertisements that are relevant to the user. User data is gathered, which then gets processed with machine learning, and patterns and trends among the users are identified. Users with shared characteristics or behaviors are then segmented into groups, and the personalization engine adjusts content and advertisements to match each segment's preferences. By processing a large amount of data, personalization engines are able to match users to advertisements and recommendations that align with their interests or preferences. Field evidence from consumer‑goods and electronics firms indicates that AI‑driven personalization can raise

Software diagnosis

Software diagnosis (also: software diagnostics) refers to concepts, techniques, and tools that allow for obtaining findings, conclusions, and evaluations about software systems and their implementation, composition, behaviour, and evolution. It serves as means to monitor, steer, observe and optimize software development, software maintenance, and software re-engineering in the sense of a business intelligence approach specific to software systems. It is generally based on the automatic extraction, analysis, and visualization of corresponding information sources of the software system. It can also be manually done and not automatic. == Applications == Software diagnosis supports all branches of software engineering, in particular project management, quality management, risk management as well as implementation and test. Its main strength is to support all stakeholders of software projects (in particular during software maintenance and for software re-engineering tasks) and to provide effective communication means for software development projects. For example, software diagnosis facilitates "bridging an essential information gap between management and development, improve awareness, and serve as early risk detection instrument". Software diagnosis includes assessment methods for "perfective maintenance" that, for example, apply "visual analysis techniques to combine multiple indicators for low maintainability, including code complexity and entanglement with other parts of the system, and recent changes applied to the code". == Characteristics == In contrast to manifold approaches and techniques in software engineering, software diagnosis does not depend on programming languages, modeling techniques, software development processes or the specific techniques used in the various stages of the software development process. Instead, software diagnosis aims at analyzing and evaluating the software system in its as-is state and based on system-generated information to bypass any subjective or potentially outdated information sources (e.g., initial software models). For it, software diagnosis combines and relates sources of information that are typically not directly linked. Examples: Source-code metrics are related with software developer activity to gain insight into developer-specific effects on software code quality. System structure and run-time execution traces are correlated to facilitate program comprehension through dynamic analysis in software maintenance tasks. == Principles == The core principle of software diagnosis is to automatically extract information from all available information sources of a given software projects such as source code base, project repository, code metrics, execution traces, test results, etc. To combine information, software-specific data mining, analysis, and visualization techniques are applied. Its strength results, among various reasons, from integrating decoupled information spaces in the scope of a typical software project, for example development and developer activities (recorded by the repository) and code and quality metrics (derived by analyzing source code) or key performance indicators (KPIs). == Examples == Examples of software diagnosis tools include software maps and software metrics. == Critics == Software diagnosis—in contrast to many approaches in software engineering—does not assume that developer capabilities, development methods, programming or modeling languages are right or wrong (or better or worse compared to each other): Software diagnosis aims at giving insight into a given software system and its status regardless of the methods, languages, or models used to create and maintain the system. === Related subjects === Cost estimation in software engineering Programming productivity Rapid application development Software design Software development Software documentation Software map Software release life cycle Systems design Systems Development Life Cycle

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Scene statistics

Scene statistics is a discipline within the field of perception. It is concerned with the statistical regularities related to scenes. It is based on the premise that a perceptual system is designed to interpret scenes. Biological perceptual systems have evolved in response to physical properties of natural environments. Therefore natural scenes receive a great deal of attention. Natural scene statistics are useful for defining the behavior of an ideal observer in a natural task, typically by incorporating signal detection theory, information theory or estimation theory. == Within-domain versus across-domain == Geisler (2008) distinguishes between four kinds of domains: (1) Physical environments (2) Images/Scenes (3) Neural responses and (4) Behavior. Within the domain of images/scenes one can study the characteristics of information related to redundancy and efficient coding. Across-domain statistics determine how an autonomous system should make inferences about its environment, process information and control its behavior. To study these statistics it is necessary to sample or register information in multiple domains simultaneously. == Applications == === Prediction of picture and video quality === One of the most successful applications of Natural Scenes Statistics Models has been perceptual picture and video quality prediction. For example, the Visual Information Fidelity (VIF) algorithm, which is used to measure the degree of distortion of pictures and videos, is used extensively by the image and video processing communities to assess perceptual quality. This is often after processing, such as compression, which can degrade the appearance of a visual signal. The premise is that the scene statistics are changed by distortion and that the visual system is sensitive to the changes in the scene statistics. VIF is heavily used in the streaming television industry. Other popular picture quality models that use natural scene statistics include BRISQUE and NIQE, both of which are no-reference since they do not require any reference picture to measure quality against.

BFR algorithm

The BFR algorithm, named after its inventors Bradley, Fayyad and Reina, is a variant of k-means algorithm that is designed to cluster data in a high-dimensional Euclidean space. It makes a very strong assumption about the shape of clusters: they must be normally distributed about a centroid. The mean and standard deviation for a cluster may differ for different dimensions, but the dimensions must be independent. In other words, the data must take the shape of axis-aligned ellipses.