How Will Generative AI Transform Marketing? - Key Applications Revealed Through Use Cases -

The emergence of generative AI holds infinite potential to profoundly transform the future of marketing.

At Dentsu Digital Inc., we developed the AI-powered marketing solutions brand " ∞AI (Mugen AI) " and are tackling diverse client challenges by providing various solutions, including "∞AI Chat" for building conversational generative AI.

Ken Yamada, Executive Officer and Head of the Data & AI Division at Dentsu Digital Inc., shares insights on the core applications of generative AI in marketing, gained from supporting numerous clients in their adoption of generative AI.

Photo courtesy: Brand Summit Autumn

*This article is based on a presentation given at "Brand Summit Autumn 2024".
 

Generative AI-Powered "Conversation" Transforms the Entire Marketing Funnel

The world is experiencing an unprecedented generative AI boom. Companies across all industries are exploring its use, and pilot projects are no longer uncommon. We're also hearing more about cases where it's already been successfully integrated into operations and services.

At Dentsu Digital Inc., we support various clients in leveraging generative AI, centered around our AI solution brand "∞AI". Through these activities, we've identified what could be considered the "true potential" of generative AI usage, which we'd like to introduce here.

The emergence of generative AI has introduced a new " dialogue (chat) " phase into the traditional marketing funnel. For example, while TV commercials were the primary touchpoint during the awareness phase in the past, generative AI-powered chat search enables the discovery of latent needs through conversation. This allows customers to encounter products they weren't even consciously seeking, making it possible to reach potential audiences.

Furthermore, by incorporating "dialogue" and "consultation" through interactive ads, concierge AI, and sales AI into the phase from interest to purchase, it becomes possible to implement individually optimized, interactive nurturing. Even after purchase, dialogue with personalized AI can enhance existing customer service and increase repeat business. In this way , the "dialogue" aspect of generative AI holds the potential to transform the entire marketing funnel.

One example is our collaboration with Mitsui Fudosan, " Mitsui de Mitsukete," where we implemented generative AI chat on a comprehensive housing site that provides one-stop solutions for home-related inquiries, aiming to streamline information searches. Similarly, in the case of Shueisha Inc., the " DEAIBOOKS " service uses personalized dialogue AI to recommend manga that matches users' latent needs. In this way, the use of generative AI to streamline and enhance marketing across diverse industries and business scenarios appears to be rapidly advancing.

Three Reasons for Successful Generative AI Adoption

While expectations for business applications of generative AI continue to rise, many may wonder, "Can it really be used effectively? " Drawing from our extensive experience supporting numerous clients in generative AI adoption, we emphasize three key points for maximizing its potential.

We believe that by focusing on the " 3 Reasons" outlined below, you can make generative AI work effectively for your marketing.

(1) Capture the "Reason" Behind Product Demand

The first key point is to leverage generative AI as a tool for gathering the reasons behind product demand—essentially, as a collector of the " Voice of the Customer" (VoC).

As a clear example, we introduce the " HAIR Room" service developed with Art Nature. "HAIR Room" is a counseling AI service enabling hair consultations online. Based on over 150 pieces of content created under medical supervision, the generative AI interacts with users to provide personalized advice tailored to their specific concerns.

Hearing this, you might think, "Isn't this just a search function turned into a chat?" However, the chat dialogue makes a significant difference by overcoming the "limitations" traditional search faced. For example, if a user searches for "gray hair shampoo," we can infer they are looking for a shampoo that can also be used for gray hair coloring.

But perhaps the user isn't buying for themselves, but rather for their father or grandfather. This illustrates how conventional search behavior can only capture "speculation about the reason for the action," making it difficult to grasp the true motivation or context.

Conversely, chat interactions allow us to gather diverse information directly from the user. Moreover, precisely because it's a chat with AI, obtaining "genuine" Voice of Customer (VoC) is a major advantage. Thus, generative AI's strength—and the value we should aim for—lies in its ability to not only capture the reasons and context behind needs (searches) but also to discern the " reasons for seeking a product " with high resolution, factoring in lifestyle and economic conditions.

By engaging in repeated, genuine conversations with generative AI chat, it becomes possible to create highly detailed personas.

(2) Creating a "Reason" to Interact with Generative AI

By now, some readers might be wondering , " Why would anyone want to talk to AI that much in the first place?" It's true—no one is having lengthy daily conversations with ChatGPT.

That's precisely why designing AI conversations requires carefully crafting compelling reasons for users to engage.

What makes an AI someone users want to talk to? While possessing specialized knowledge about the target product or service is fundamental, what's equally vital is being someone the user feels " understands them." In other words, the key is knowing the individual (the user) and understanding the characteristics of people who buy that product.

For example, when I start a chat, the AI should already know: "Oh, it's that Yamada-san who bought that product before," or "It's that Yamada-san who has that kind of concern and is asking for this kind of advice." Furthermore, the conversation starts with the AI also understanding insights like, "People like Mr. Yamada tend to have these kinds of insights and tendencies." This enables users to receive advice and suggestions that perfectly match their concerns and needs, leading to conversations where they think, "This AI really gets it!" and the interaction flows smoothly.

While there are various approaches to creating this 'understanding person,' ∞AI achieves it by leveraging not only the client's first-party data (CDP) and chat conversation logs, but also insights derived from statistical analysis unique to the Dentsu Group in Japan.

(3) Provide Personalized "Reasons" to Buy

Understanding the true reasons users seek products and designing compelling reasons for them to engage with generative AI. The ultimate goal beyond this is the third point: " Provide personalized 'reasons' to buy."

A clear example is the "GDO Staff AI" from Golf Digest Online , introduced in our previous article. This is a conversational AI service placed on the golf course reservation page. Using free-form words, the AI engages in natural conversation with users, discerning each individual's detailed requests, preferences, and latent needs. The AI then makes personalized, optimal suggestions to promote golf course reservations.

Furthermore, by utilizing AI conversations for post-play reviews, it connects to suggestions for items tailored to user needs and recommendations for future golf courses. Through thoroughly personalized AI interactions, it can propose products and services perfectly suited to each user. We believe this represents a utilization method that maximizes the strengths of generative AI.

By driving these three Reasons, we continuously grow the marketing ecosystem!

By having users engage in "candid" conversations with generative AI, we capture high-resolution Voice of Customer (VoC). Leverage first-party and external data to build generative AI that users want to engage with. Based on insights gained from these dialogues, personalize and propose products/services perfectly suited to the user, driving purchases. This entire process generates even more sophisticated data, which can then be used to continuously cycle through the "Three Reasons." We believe that rapidly growing this marketing ecosystem is the true purpose of generative AI.

Furthermore, we believe this ecosystem has the potential to expand beyond marketing into a wide range of areas. For example, while "∞AI" includes a solution called "∞AI Ads" that automates and optimizes digital ad creatives and performance prediction, leveraging insights accumulated within the ecosystem could enable the automatic generation of creatives even more personalized to each individual's needs. Applications extend beyond advertising to various creatives like owned media articles, email newsletters, and landing pages.

Thus, generative AI—which is undergoing rapid change and growth—remains perpetually unfinished, embodying truly infinite potential. Leveraging its proven capabilities in developing diverse services and projects using AI technology, Dentsu Digital Inc. will continue striving to drive client business innovation and contribute to better lives for consumers.