Why AI Agents Are Now Integral to Marketing

By Anutosh Yadav, SVP, Technology at Material

We know AI stands for artificial intelligence, but particularly when it comes to AI agents, the acronym can also mean autonomous intelligence. AI agents are tools that automate specific tasks so that they can be completed with little to no human intervention. Gartner expects that by 2028, at least 15% of day-to-day work decisions will be made autonomously via AI.

Gartner also predicted that this year, the percentage of customer interactions managed by AI in some form would reach 80%, up from just 25% in 2018. That 80% includes customer service chatbots, email segmentation and analysis of large datasets to improve personalization.

Clearly the future is now. Yet many organizations and marketing professionals remain skeptical or fearful: skeptical that AI agents can perform as well as people, and fearful that AI agents will take their jobs. The reality, however, is that organizations and marketers have much more to lose by not incorporating AI agents. AI’s ability to automate, personalize and optimize at scale gives adopters a competitive edge. Those who fail to adopt and adapt risk not only falling behind in the race for customer acquisition and brand loyalty – but falling out of the competition altogether.

Four Benefits of AI Agents in Marketing

Customer-centricity is a cornerstone of the brand experience and customer loyalty. Delivering engaging, personalized customer experiences across multiple touchpoints is critical. With their ability to learn and adapt, AI agents can help to bridge the gap between consumer expectations and marketing capabilities in multiple ways.

• Enable personalization at scale and in – or close to – real time. McKinsey reports that personalization can reduce customer acquisition costs by up to 50%, boost marketing ROI 10%-30% and increase revenue up to 15%. AI agents excel in rapidly analyzing the large datasets and interactions necessary to deliver highly personalized experiences. Relevant product recommendations, tailored landing pages, cart abandonment messages, proactive promotional offers: All are examples of personalized customer experiences that AI agents can quickly and accurately facilitate.

• Increase operational efficiency. Given that AI agents can automate myriad routine tasks, it’s not surprising that PwC expects AI to account for $6.6 billion in increased productivity worldwide by 2030. For instance, organizations that use AI-powered chatbots can provide consumers with 24/7 customer service for far less money than it would cost to hire customer service reps for round-the-clock shifts. What’s more, chatbots can handle multiple customer queries at once, reducing wait times and subsequently improving the customer experience.

• Encourage strategic and creative ideation. By handling routine, repetitive tasks such as data analysis, email segmentation and ad optimization, AI agents enable marketers to focus on strategic and creative activities.

• Anticipate customer needs. One of AI’s greatest strengths is identifying hidden patterns among data. AI agents can analyze historical data and customer behavior to predict future purchasing behavior. This helps to further personalize the customer experience, by enabling brands to promote relevant products and services at the most appropriate times to consumers. It also enables organizations to better manage inventory and staffing levels.

AI Agents in Action

Actions speak louder than words — and so do examples of how organizations have benefited from incorporating AI agents into their marketing workflows.

• An early adopter of AI in marketing, lingerie brand Cosabella began using AI to test multiple marketing ads and assets, from social media to display, in near-real time. In addition to providing the marketing team with actionable insights so that they can improve their campaigns, the AI tool adjusts the spend on the campaigns autonomously, though the marketers do monitor its actions and make changes when they deem necessary. Cosabella credits the implementation with increasing revenue 155% and ROAS 336%.

• Given its constantly changing offerings, deals and events website Itison found creating effective personalized emails a Sisyphean task. Once it adopted an AI tool to customize its weekly emails based on each recipient’s past behavior, however, the company saw its e-commerce conversion rate increase 25%.

• Wholesale insurance broker GIC Underwriters brought on an AI agent to augment its customer service team. GIC’s marketing materials and other documents were converted into a knowledge base for the AI agent, which was also programmed to transition to a live service rep for complex issues. Human oversight and ongoing data analysis cut AI hallucinations 95% and ensured continual improvement. Within two months, the AI agent had answered 46% of all incoming questions, with a 95% accuracy rate, freeing up the human agents to handle more-complicated issues as well as focus on new business.

Looking Ahead

During the 2024 holiday season, Adobe Analytics found that traffic to retail sites driven by AI agents in the form of chatbots was up 1,300% from the previous holiday season. That’s a bold indication of the power of AI agents — and a reminder that organizations need to harness that power to compete and thrive in this shifting landscape. For businesses that hope to retain and grow sales and market share, adoption of AI agents is a critical new tool in the marketing toolkit.

In my next blog post, I’ll discuss key steps to successfully incorporating AI agents into the marketing workflow. Meanwhile, if you want to learn more about how Material’s experts can help you unlock the power of AI to bolster your business, get in touch today.