AI Chapter For Machine Learning
AI Chapter For Machine Learning
INTRODUCTION
The evolution of technology has transported about significant variations in our world.
From the advent of smart devices to the emergence of self-driving cars, artificial
intelligence (AI) has seamlessly integrated into our daily lives. These innovations are
designed to comprehend customer preferences and deliver personalized consumer
experiences. In essence, AI refers to the intelligence exhibited by machines, and its
impact has been a subject of extensive discussion, particularly in fields like
marketing.
This thesis aims to investigate into the diverse implications of AI in the modern
marketing landscape. The central questions guiding this exploration are: How does AI
influence the marketing sector? In what ways is AI reshaping the realm of digital
marketing? And what lies ahead for the future of marketing? To address these
inquiries, a qualitative research methodology will be employed.
It's not a stretch to argue that AI will inevitably become an integral part of the
marketer's toolkit in the future. The foundations of an AI-based approach are already
firmly in place. Contemporary marketing is increasingly data-driven, focused on
precision targeting, and directly tied to tangible business outcomes. Advertisements
1
and offers are continually tailored in real time for individual consumers, as companies
leverage a multitude of channels to reach their audience. In cases where there are vast
numbers of consumers, often numbering in the thousands or millions, AI becomes
essential for granular targeting. Additionally, organizations aspire to customize the
customer experience, a task that can be effectively accomplished with the aid of
machine learning and other AI techniques Baucus, M. (2019) [2]. AI stands ready to
assist businesses in making informed decisions across both digital and analog
marketing domains, guided by similar sets of criteria.
It is crucial to underscore that the primary impartial here is not just to replace not so
much human decision-making in strategic contexts, but instead to craft a more
sophisticated decision-making framework, leveraging AI. This framework equips
marketers with expedited, comprehensive, and thoroughly elaborated options from
which to make choices, underpinned by a well-defined theoretical foundation.
2
commercial replicas a conceivable consequence of commercial and marketing
planning—this exploration may eventually encompass the territory defined by Kiron
and Schrage (2019), namely, the application of AI in shaping strategy. Another aspect
of investigation relates to the literature on harnessing AI for digital alteration, which
also intersects with the broader discourse on AI's role in strategy. Nevertheless, it is
crucial to emphasize that this object chiefly focuses on the utilization of AI within the
domain of marketing strategy.
1.1 Motivation
The boundary between human and computer involvement in management is
undergoing a significant transition, shifting from operational to strategic domains.
This transformation is succinctly captured by Jarrahi (2018) and forms an integral part
of the broader discourse surrounding the penetration of AI into professions like law.
In the context of fields like law, the focus often centers on AI's volume to contribution
persons in creation sense of vast volumes of info, particularly in the era of burgeoning
"big data." A pertinent empirical contribution to this conversation is offered by
Kolbjørnsrud et al. (2016) [4], who delve into the transformative influence of AI on
the very definition of management.
Claudé and Comb (2018) observe that in the present landscape, AI primarily serves as
a supportive tool for significant Business decisions are ascribed to factors other than
being solely reliant on a primary decision-maker. This phenomenon is largely
attributed to the existing constraints of AI, which is perceived as relatively feeble in
contrast to the envisioned robust AI of the future. As computational capabilities and
data reservoirs keep growing, the boundary defining the degree to which AI can
replace human choice making undergoes a persistent evolution. This perspective is in
3
line with the findings of Rust, R. T. (2021) [4] put forth a range of possibilities in this
evolving landscape, which include the following:
Collective choice making involving both humans and AI, typified by top organization
sides and boards.
The latter option closely aligns with the central focus of this thesis.
Shrestha et al. (2019) also propose that the suitability of these replacements,
particularly the viability of full AI allocation, hinges on several factors:
Decision search space specificity: AI is better suited when decisions require a high
level of specificity.
The greater the size of the alternative set, the more difficult it becomes for humans to
handle effectively.
Reliability: AI benefits when decisions and data exhibit common patterns, as AI often
learns from prior cases.
4
decision making may be a more fitting choice, although Hybrid 1 might also have its
merits in certain scenarios Maitra, D. (2021) [6].
In our exploration of AI's application, we need to contemplate its relevance across all
five of these domains.
This thesis primarily takes on the viewpoint of business to-consumer (B2C) marketing
and also includes trades that sell to customers through intermediary businesses, a
model known as B2B2C Al Sulaie, S. (2023) [7]. Certain aspects of these
advancements have been previously explored in our publications, including Wright et
al. (2019), Stone and Aravopoulou (2018), as well as Stone et al. (2017, 2018).
Discussions about AI, particularly within marketing, carry a distinct fashion element,
and the demarcation between progressive analytics and AI is notably blurry. Analytics
has changed to a point where it can tackle relatively unstructured problems and offer
suggestions in a manner that would have once been deemed "expertise" or even
5
classified as AI. One crucial attribute that sets AI apart from traditional "advanced
analytics" is its capacity for automating feedback loops and continuous improvement,
primarily through machine learning. This implies that AI systems continually test and
evaluate conclusions against specific criteria, as opposed to relying on human review
for decision-making Hu, L. (2023) [8]. When AI manages precise and well-contained
actions, implemented swiftly with quickly measurable and assessable results, it proves
highly productive. However, in scenarios where decisions span broader scopes, entail
longer implementation periods, and feature delayed or challenging-to-measure
outcomes, the deployment of AI becomes more intricate. In such cases, hybrid
approaches may emerge, with AI handling some phases of the process while human
decision-makers oversee others, as is often the case in marketing strategy. An
approach that can enhance AI's applicability is back-casting, where known results
from earlier decisions; this approach leverages both historical data from the analysis
period and the accumulated knowledge of strategic marketers. It harnesses techniques
such as rule elicitation and case-based reasoning to capture and integrate this
"historical expertise" into the system during training.
The rise of AI in promotion is not a standalone development; rather, it aligns with the
wider and swift progress of marketing technology. This progress encompasses various
aspects of marketing, including front-line operations like contact centres, as well as
the comprehensive management of marketing resources. This harmonious evolution
facilitates the integration of AI into marketing by automating diverse tasks and
producing valuable data to underpin AI-driven applications. However, it underscores
the importance of seamlessly integrating AI with these systems, allowing for
automatic data feeds and reciprocal recommendations between AI and other facets of
marketing operations.
Marketing encompasses actions taken with regard to customers and the utilization of
their data, both of which carry significant ethical implications. The practice of relying
on computers to determine which customers should receive specific product offers or
to identify potential instances of fraud has become commonplace, particularly in
industries like financial services. However, it has already sparked concerns regarding
fairness and the establishment of trust Zheng, Z. (2023) [10]. When it comes to
6
handling customer data, prevailing legislation underscores the utmost importance of
ensuring that AI-driven processes comply with ever more stringent data protection
regulations and adhere to fundamental ethical principles that marketers are expected
to uphold.
Finally, within the domain of consumer spending, there are notable shifts in
consumption patterns. Traditional visits to cinemas are being replaced by the
preference for streaming video services, while mobile apps have become the primary
source of entertainment. The avenues through which consumers acquire goods and
services are also evolving, propelled by the digitalization of content. This transition
from physical to virtual retail is particularly conspicuous in sectors like holiday
bookings, fashion, and furniture. Additionally, in certain countries, the aging
population is expediting the move from physical products to services tailored to meet
the needs of older adults more effectively Xie, Y. (2021) [12].
1.2 Business to business (B2B) marketing
7
customer relationships primarily through sales teams and later established contact
centres (e.g., as seen in works like Stone and Shaw, 1987, 1988; Stone et al., 1990).
Nevertheless, the data-abundant environment of consumer marketing has largely
steered the discourse on marketing automation toward consumer markets Carlson, B.
D. (2017) [14]. It is important to note that many aspects of B2B marketing closely
parallel consumer marketing, especially in cases involving interactions with numerous
small businesses.
On the conflicting end of the spectrum lies the domain of major account and key
account marketing, where substantial contracts are negotiated, and customer
relationships are personally managed by dedicated sales teams (Hughes et al., 2004).
Nonetheless, even in this arena, there is a growing trend towards extensive
digitalization. As an example, sophisticated gratified management schemes are
utilized to customize content for individual forecasts and customers. Every interaction
with this content, including downloads and engagement is closely monitored and
analysed. This enables suppliers to rank customers rendering to their degree of
interest in a product or service. Nevertheless, as we will delve into further, factors
such as significant disparities among customers and the ensuing complexities in
replicating decisions concerning them can limit the effectiveness of artificial
intelligence (AI) in this particular context.
The demarcation between public and secluded spending, coupled with the associated
data, is currently undergoing a significant shift P. K. (2017) [15]. Governments are
increasingly involved in facilitating service delivery, as evident in the emergence of
smart cities (Stone et al., 2018). In smart cities, information stages used to oversee
services may be either partially or completely government-owned. Indeed, the notion
of public subdivision information platforms serving as arenas where both public and
8
private sector entities compete to deliver public facilities has been extensively
deliberated, often described as the "administration as a platform" concept (Brown et
al., 2017). Consequently, public spending is undeniably pertinent to this paper.
Nevertheless, certain aspects of AI utilization may encounter constraints due to
political decisions, data protection regulations, and government mandates.
The SDMP literature underscores the significance of several key factors, including:
However, it's worth noting that the SDMP works has not yet been effectively
integrated with the body of work on the utilization of AI in decision-making. As a
result, there is a pressing need to establish a connection between these two bodies of
literature.
9
1.5 Scope and significance of the study
Given the broad possibility of the marketing field, the authors intentionally opted to
concentrate on numerical marketing. The choice to travel this theme was ambitious by
the extensive media exposure that both digital marketing and artificial intelligence
had garnered prior to embarking on their thesis research. This media attention
remained a constant presence throughout their research journey. Furthermore, the
authors are deeply passionate about following careers in the marketing field in the
immediate future.
The primary objective behind crafting this thesis was to obtain the most pertinent and
valuable insights about the association amid false intelligence and digital marketing
was chosen as a primary focus for the thesis due to the compelling reasons detailed
earlier Connolly, R. (2023) [17]. Precisely, the authors will explore the domains of
artificial intelligence, machine learning, big data, and numerical advertising, with the
overarching impartial of elucidating their substantial advantages.
Also, the authors will investigate the upcoming potential of artificial intelligence in
both marketing and the wider commercial arena. Their aim is for this thesis to equip
marketing professionals with a greater understanding of AI, enabling them to navigate
this domain more effectively. By sharing their discoveries, the authors aspire to
motivate fellow marketers to explore further the swiftly evolving landscape of digital
marketing.
Lastly, the process of researching and crafting this thesis is anticipated to bolster the
authors' career prospects, as it provides them with a thorough comprehension of AI
and its implications in digital marketing from multiple angles, especially in light of
the ground-breaking advancements in the field during 2022.
10
Machine Learning (ML) denotes a computer's capacity to learn from raw data rather
than relying solely on human-provided instructions. This empowers machines to
identify patterns and extract valuable insights from the data they collect through their
sensors.
Artificial Intelligence (AI) is the pursuit of imparting computer schemes with abilities
that emulate human intelligence. Its origins trace spinal to the 1950s, notably with
Alan Turing's introduction of the Turing Test in 1950, which posed the inquiry of
whether machines can manifest human-like cognition. John McCarthy further
solidified this field by coining the term "Artificial Intelligence" in 1955 and
orchestrating the 1956 Dartmouth Seasonal Investigation Scheme on Artificial
Intelligence. At its core, AI, as per their proposition, revolves around equipping
machines with the capacity to display intelligent behaviors reminiscent of human
capabilities.
In this thesis “their work titled "Advances in Artificial Intelligence Research and
Development," Pujol et al. (2014) provide valuable insights into the most recent
breakthroughs and applications in the field of AI. Among the notable examples are
pioneering advancements. For instance, Automaton Pointer Dexterity involves the
11
training of robots in simulated environments to enable them to seamlessly apply their
acquired knowledge in novel contexts, thus fostering the enhancement of dexterity &
Kumar, S. (2023) [19].
12
predicting stock prices has faced challenges due to the multitude of variables
influencing stock pricing.
Mahesh (2020) categorizes machine learning into three main types: While each
category has its specific focus, Mahesh's research underscores Reinforcement
Learning as the most effective and creative approach for forecasting stock prices.
In their work from 2018, Sutton and Barto introduce "reinforcement learning" as a
unique subset of machine learning within the domain of deep learning. Its objective is
to construct models that improve performance based on prior data processing. In this
learning paradigm, a reward system is crucial, with rewards granted for each
accomplishment. This structure can be likened to an instructional module where
students receive rewards for completing required activities and meeting the
specifications of a dataset.
Data Analysis and Insights: Artificial Intelligence has the capability to rapidly
and accurately process extensive data sets, furnishing marketers with valued
13
insights into consumer behaviour, favourites, and trends. This data driven
method facilitates more well-informed decision-making.
Personalization: AI algorithms can analyse customer data to create highly
personalized marketing campaigns. This personalization increases customer
engagement and conversion rates by delivering relevant content and offers.
Automation: Artificial Intelligence has the capacity to automate repetitive
marketing tasks, including email advertising, social television placement, and
ad placement. This frees up dealers to focus on plan and creativity rather than
manual labor.
Predictive Analytics: AI can forecast upcoming trends and client behaviour
based on past data, helping businesses stay ahead of the competition and
adjust their strategies accordingly.
Cost Efficiency: By automating tasks and improving targeting, AI can
decrease marketing costs and improve the return on investment (ROI).
24/7 Availability: Chabot’s and virtual helpers motorized by AI can deliver
round the clock customer support and assistance, enhancing the customer
experience.
A/B Testing Optimization: AI can optimize A/B tests by quickly analysing
results and making recommendations for improvements, leading to more
effective campaigns.
14
Overreliance: Overreliance on AI for decision-making can lead to a disconnect
from the human element of marketing and customer relationships.
Technical Challenges: AI systems can experience technical issues, such as
downtime or inaccuracies, which can disrupt marketing efforts.
In summary, marketing with AI offers many advantages, including improved
data analysis, personalization, automation, and cost efficiency. However, it
also comes with challenges related to privacy, bias, cost, and the need for
human creativity and oversight. Successful AI marketing strategies strike a
balance between harnessing the power of AI and maintaining ethical and
human-cantered marketing practices.
Chapter 2 in this chapter completes Literature review and related work of this
research work.
1.9 Contributions
The primary contributions of this thesis encompass the following key aspects:
15
framework will be geared towards effectively comprehending and
forecasting consumer demands, thereby optimizing marketing strategies.
Integration and Testing: The proposed Digital Marketing framework will
be seamlessly integrated into an open-source platform for the purposes of
validation and rigorous testing.
Performance Assessment: The effectiveness and efficiency of the
proposed framework will be rigorously evaluated under varying market
conditions to ascertain its robustness and adaptability.
16