Big investments show AI is poised to revolutionize marketing

by | Oct 21, 2019 | Marketing, Public Relations

Unprecedented volumes of data and advances in AI are transforming the marketing services industry, according to new research from technology advisory and investment firm GP Bullhound.

The firm’s new report, AI and the Services Revolution, reveals that investments in marketing-related AI have grown steadily, with $2.5 billion of investments in emerging companies in 2018—and $1 billion invested in Q2 2019 alone. In all, a total of $11 billion has been invested in the sector since 2014.

While North America accounts for the majority of funding into AI marketing companies, with a yearly volume of around $1.5 billion in 2014-2018, Europe is showing the highest growth rate. The European market grew to represent 30 percent of all transactions in H1 2019, while Asian transactions have declined from 20 percent in 2018 to only 5 percent as of H1 2019.

The research highlights the application of AI in marketing as still early-stage, but of increasing interest to marketers seeking to invest marketing budgets for greater returns.

AI ushering a new era of marketing

“Artificial Intelligence heralds the beginning of a new marketing era, driven by the need to connect vast amounts of disparate data, uncover patterns and make predictions, which only AI can accomplish,” said Oliver Schweitzer, executive director at GP Bullhound, in a news release. “AI will become increasingly integrated into digital services and marketing processes; however, human intelligence and intuition will remain critical to interpret its findings and implement strategic and creative plans accordingly.”

Big investments show AI is poised to revolutionize marketing

“While North American companies involved with marketing AI still dominate the sector, there has been strong recent growth in Europe,” Schweitzer added. “But ultimately this is a global industry serving multinational clients who are seeking help and advice to process, interpret and act upon the massive volume of data being collected on customers.”

The report shows that the marketing AI space is still a nascent market, with the number of private placements (126 in 2018) outnumbering M&A transactions (83 in 2018). However, M&A is clearly growing—in 2014, there were just 11 deals in the sector.

Likewise, there is a clear trajectory for the significant growth of private placements over 2018 levels, with $1.5 billion raised across 68 transactions so far this year.

Data is the defining feature of the global digital economy and is reshaping the marketing sector

Advances in computing power mean that AI is evolving into a viable and affordable technology that enables marketers to collate, sort, and analyze vast quantities of data. AI also adds another layer of application, allowing the data to be employed in predicting and influencing future consumer actions.

Big investments show AI is poised to revolutionize marketing

Three major themes within marketing AI are considered within the report: Hyperpersonalization, branding, and B2B. Personalizing customer journeys is the most common way for marketers to deploy AI, with a quarter (24%) already deploying AI to this effect, and almost two thirds (59%) planning to do so in the next two years.

The report also highlights the critical role of digital marketing service providers, including agencies and consultancies, in advising marketers on the efficient use of AI.

“Having data first and foremost improves the output, but it doesn’t replaceoutput,” said Sir Martin Sorrell, founder of S4 Capital, in the release. “Access to vast amounts of data will, therefore, make our job more effective, not less effective. The traditional argument, that data destroys creativity, is nonsense—AI will aid creativity. Better input in the form of data leads to better output.”

Big investments show AI is poised to revolutionize marketing

The report includes views from companies at the forefront of marketing AI, such as MiQ, Emarsys and RAIN, digital marketing groups, such as S4 Capital and Tinuiti, as well as other entrepreneurs, investors, and academics.

Download the full report here.

The report covers tech and digital services companies only, with a bias towards software and services that operate in the broader digital marketing space including adtech, marketing tech, marketing communications agencies, and consulting businesses. Companies included are those that state artificial intelligence, advanced machine learning, deep learning, neural networks, natural language processing and/or generation, computer vision as a major driving force behind their business model. The analysis was based on data from 1 January 2014 to 30 June, 2019. No geographies were excluded.

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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