Introduction
Today, businesses are using every tool at their disposal to stay ahead of their competitors. In markets with high digitization and internet usage, companies have leaned on emerging technologies such as Artificial Intelligence (AI) to gain a competitive advantage. Artificial intelligence allows companies to analyze vast amounts of data in real time and make relevant decisions using the information.
This real-time customer data analysis allows businesses to develop marketing plans that specifically target specific groups of people based on information from the analysis. In countries such as the UAE, where GDP per capita is extraordinarily high, and cellular network penetration is almost 100 percent, digitization and the use of AI in marketing are widespread. This literature review will focus on digitization, artificial intelligence, an evaluation of AI in business, AI in the United Arab Emirates (UAE), market applications of AI in UAE, finding a research gap, and summarizing the literature review.
Digitization
Technology has transformed the way businesses conduct their activities and how consumers purchase goods and services. For instance, technology has fundamentally transformed how companies promote their products, manage resources, communicate, and exchange information. From the consumer’s perspective, technology has enabled them to be part of the acquisition process and significantly altered consumption patterns (Bala & Verma, 2018).
In every aspect of business, the emergence of technologies such as artificial intelligence, blockchain technology, 5G cellular communication, and others has led to innovations in areas such as marketing and research. Such innovations have led to growth and acted as catalysts for new market trends, marketing analytics, and digital marketing. In recent years, the focus has been on marketing trends that emerged as a result of the invention of social media.
Social media was originally a platform that enabled people to communicate and keep in touch with friends, family, and colleagues. However, it has evolved beyond its original purpose and is now a major marketing channel that large and small organizations use to communicate with their customers (Desai, 2018). In an article on digitization and its impact on marketing strategies, the authors hold that social media helps companies incorporate user-generated content in their marketing messages (Cham et al., 2022). In this case, consumers assume the role of broadcasters instead of holding onto their traditional role of listeners.
The effect of this role change, according to the authors, is a high return on investment (ROI) as customers hundreds of customers broadcasting a marketing message can reach millions of potential customers that a company cannot do alone. In addition, the resources provided by social media sites allow companies to gauge the impact of their marketing on almost a real-time basis. The authors argue that this has led to a fundamental shift in marketing and the adoption of the scientific method in marketing.
The article articulates the benefits of digital marketing, especially where companies are now utilizing social media as a major digital marketing channel. While there are multiple benefits, the article does not analyze the disadvantages of social media marketing. One disadvantage not addressed in the article is that social media marketing can damage a company’s reputation. For example, a message that is viewed as biased against a particular group of people could lead to instant repercussions for a company or potential lawsuits if the marketing message is misleading.
Digital marketing also raises the issue of the security of data collected from customers. To be able to target their marketing messages effectively, companies collect and analyze huge amounts of data. However, this data is also a target of malicious actors such as hackers, who could gain illegal access to it and expose it, leading to serious reputational and financial consequences. Finally, a negative review of a product could potentially lead to its instant death. Thus, social media, as a major component in the digital marketing sphere, has advantages and disadvantages. The key to success is knowing the audience for a particular message, responding to criticism on time, and being flexible.
Artificial Intelligence
Until less than three decades ago, artificial intelligence was seen as a technology of the future. However, advances in cellular networks to ones that could handle the bandwidth required by devices utilizing AI have led to its adoption and widespread use in business. Companies with the requisite resources that can support AI are massively adopting them to improve customer experience and operational efficiency.
Through AI, companies and marketing departments have been able to obtain a more nuanced and comprehensive understanding of a target segment (Vlačić et al., 2021). Insights about a certain marketing segment gathered with the use of AI help reduce the workload and drive conversations. The primary purpose of AI in marketing is the help it provides in real-time analysis of data collected from customers and economic trends analysis. Such an analysis allows decisions to be made faster and with little risk of the decisions made being wrong.
However, other than data analysis, AI is also helpful in the creation of a human-like language that is optimized for content creation for digital marketing channels such as websites and customer services. AI is also crucial when determining the type of media to use for a particular marketing message (Kannan, 2017). In essence, AI helps predict the type of media where certain marketing messages will have the optimal effect (Verma, 2021).
Further, companies are using AI for automated decision-making. For example, when deciding which type of growth and marketing strategies to adopt, the potential strategies are assessed using AI and the best strategy adopted. Finally, AI is used in business for real-time personalization. This allows instant change to fit a customer’s preference when purchasing an item offered by the company. Thus, despite its relatively short period of existence, AI now has multiple applications in a company’s marketing efforts.
An article in Forbes magazine on how AI is transforming digital marketing asserts that companies are using AI to leverage technology to improve the consumer journey. The author holds that AI is also a method companies are using to increase the ROI of marketing (Hall, 2022). Such an increase is possible through AI-enabled processes such as machine learning, big data analysis, and other processes that provide useful insights into a segment of the target audience.
With AI-enabled insights into the target customers, a company can create more touchpoints that eliminate the guesswork that characterizes customer interactions (Hall, 2022). The author also holds that AI automates processes that were once manual, such as content generation, web design, and some PPC ads. In addition, the use of AI for digital marketing can optimize and streamline the campaign by eliminating risks associated with human error.
The assertions in the article highlight the advantages of AI in a digital marketing context. However, it fails to raise serious issues that companies face when it comes to using AI for marketing. The author indirectly assumes that AI can replace human beings in the digital marketing processes. However, the ingenuity of the human mind remains a major component of any AI-driven digital marketing campaign.
Machines are incapable of replacing the human touch, emotions, storytelling, and compassion that are inherent in human beings (De Bruyn et al., 2020). The focus of AI is to use data to generate the most optimal solution to a problem. However, some efforts require a human touch, and no amount of data or analysis can replace it without affecting one or more customer touchpoints. However, AI is still in its early years of development, and there is no telling which human characteristics it will be able to replace in the future.
Evaluating AI in Business
The simple description of AI is a machine that can learn and independently decide based on data and its analysis. AI can change how businesses approach work and their customers when applied correctly. For some people, AI is synonymous with automating processes that humans once did. However, automation is the tip of the iceberg regarding what AI can do for a business. Companies collect vast customer data today (Huang & Rust, 2022).
With the help of emerging technologies such as AI, companies can make better decisions regarding various activities at the company, including but not limited to marketing. As a sign of the acknowledgment of AI’s potential, companies have adopted AI in their operations recently (Feng et al., 2021). The mass adoption of AI shows that it is no longer an experimental technology and has entered a growth phase. Despite being in its initial growth phase, AI has multiple applications in business.
AI is beneficial in multiple business activities such as improving a customer experience, product recommendation, audience segmentation, customer satisfaction analysis, fraud identification, and optimization of supply chain operations. Chatbot technology utilizes AI to improve customer experience when a potential customer visits a company’s website. In addition, companies utilize AI to offer recommendations for products that will keep their target audience engaged and interested (Loureiro et al., 2021).
Further, AI can track customer behavior on a company’s website and present them with products they have already viewed. This is a handy feature for companies that use their website as a point of sale. In addition to recommending products, AI in business can help marketers segment a market and generate options for targeted marketing to specific segments (Feuerriegel et al., 2022). Finally, AI can help gauge customer satisfaction, identify instances of fraud, and help a company deliver its products on time by optimizing its supply chain.
Advantages of AI in Business
AI provides companies with multiple benefits, including real-time analytics. With companies being able to replicate almost all competitive advantages of their competitors, real-time analytics and the subsequent decisions made because of it help maintain an edge (Krakowski et al., 2022). The value of real-time analytics lies in the promptness with which decisions can be made. AI is also helpful to businesses that desire automation. Business automation allows the deployment of human resources to areas where they can have the greatest impact and thus increases productivity and profitability (Guo, 2020).
AI is a helpful tool for a company that wishes to increase its customer experience. Increasing a customer’s experience through AI can be achieved in several ways, including but not limited to the deployment of a chatbox on the company’s website. AI is also deployed by companies that need to cut their operations costs. In this regard, AI is deployed to perform repetitive tasks and monitor other machines for maintenance. Finally, it is helpful when a company is making projections about its future, and it also improves data security by limiting access to sensitive data to a few people.
Disadvantages of AI in Business
AI offers companies and other organizations multiple advantages and opportunities for growth. However, it has several disadvantages. One disadvantage pertains to the cost of adopting AI in a business. Large organizations with access to a pool of resources and credit at a lower cost can easily afford to adopt AI quickly. However, small and medium companies struggle to raise the initial outlay for investment in AI (Guo, 2020).
Artificial intelligence systems lack the creativity necessary for a company’s effective functioning and management. No matter how advanced an AI system is, it can function under the limitations of its intended purpose. Hence, it cannot combine multiple experiences to solve a problem. Despite the minimal probability of an error, AI can still make errors, meaning that its analysis sometimes requires human verification. In addition, AI has multiple loopholes that malicious actors and sensitive data accessed can exploit. Finally, using AI creates a dependence that exposes a company to existential threats if the AI fails.
AI in the United Arab Emirates
Like in other highly advanced, developed, and resource-endowed countries, AI has been adopted in the UAE at a record pace. Companies in the UAE use AI in various departments. Some of the departments where AI is heavily used include the customer care department, finance and accounting department, and marketing department. Companies that utilize AI enjoy its benefits but also face the disadvantages associated with the adoption of AI.
AI in Customer Care
Effective customer service in the digital age implies 24/7 availability. However, because of limitations inherent in human beings and stringent laws on working hours, 24/7 availability can only be achieved through the use of AI-enabled technology. Customer care departments in many organizations utilize chatbots (Gacanin & Wagner, 2019).
Chatbots are AI tools that ensure a customer has the help they require whenever they require it and from wherever. Chatbots have been credited with increased customer satisfaction and the traction of new customers in an organization. Thus, businesses utilize chatbots because they offer 24/7 customer service availability in any language.
AI in Finance and Accounting
AI plays a critical role in automating repetitive and routine processes, allowing the faster accomplishment of accounting and finance tasks. The role of the accounting and finance department is to ensure that resources meant for a company are prudently utilized and accounted for. Ensuring proper resource utilization and accounting for resource uses are prone to errors, which can be eliminated by utilizing AI (Luo et al., 2018). Consequently, organizations have adopted AI, allowing accounting and finance professionals to carry out the tasks they assign efficiently. Hence, companies have adopted finance and accounting software that integrates AI features to help improve productivity and efficiency and reduce errors.
AI in the Marketing Department
The marketing departments of many organizations and companies in the UAE heavily utilize artificial intelligence in their operations. With internet penetration in the UAE at one hundred percent, according to figures by the government released in 2020, companies have re-oriented most of their businesses online (Mehta et al., 2022). Companies from small to large organizations seem to have realized the changing customer purchasing behavior in the UAE.
Consequently, many resources have been redirected towards the mass adoption of AI technologies in companies that help them target customers with tailor-made advertisements for products they like. AI provides businesses with deeper insights into their customers’ purchasing and consumption behavior, which helps them devise strategies for efficient marketing (Shahid & Li, 2019). Finally, artificial intelligence insights allow UAE companies to improve customer experience in all customer touchpoints.
Marketing Application of AI in Businesses in the UAE
The United Arab Emirates is a key growth market for domestic and international markets looking to venture into the Gulf countries and MENA region. Consequently, many businesses operating in the country are adopting AI to reach their customers and potential customers. One such AI technology preferred by companies in the UAE is chatbots (Bhat, 2022). This AI-powered conversational tool has been adapted for use on a company’s website and on social media sites such as Facebook, Instagram, Twitter, and WhatsApp.
Marketing messages sent via popular third-party platforms have a higher chance of being opened compared to other marketing and engagement channels. Chatbots create human-like authentic conversations and also make the conversation engaging at the same time. Further, chatbots converse in multiple languages making them suitable for customers in the UAE who converse in multiple languages due to the large number of expatriates in the country.
Millennials and Gen-Z make up about sixty percent of the total population of any country in the Middle East. This demographic is characterized by high expenditure and digital-only demand (Gandhi, 2019). These characteristics mean that companies often have problems keeping up with online demand.
Given the potential growth of online demand, companies must have the right tools to respond to it and meet the expectations of their customers. Businesses have responded to these marketing and demographic realities by investing in AI. In particular, these companies are focused on refining their marketing messages and customer insights for a great experience, increasing the efficiency offered by automation, improving market forecasts, and improving delivery. Thus, demographic changes and the use of mobile technology for online purchases have motivated companies to adopt AI to better serve customers.
Research Gap
A literature review of the topic reveals several areas that current research has not been able to comprehensively touch. Literature reviews on the topic focused on digital marketing tools without a specific focus on the impact of artificial technology on marketing. In addition to the systemic ignoring of the impact of AI in marketing, existing research focuses on countries in Europe and the United States. Therefore, this research will add to the knowledge of the impact of artificial intelligence in marketing for companies in the Middle East. Due to the similar demographics, culture, and organizational behavior, knowledge from this research will be applicable to countries in the Middle East and North Africa (MENA) region.
Conclusion
Advances in technology have led to accelerated digitization in most countries and companies, including countries in the Middle East, such as the UAE. With digitization, companies have been able to re-orient some of their functions online, and now digital channels count as an excellent resource for many companies. Digitization has enabled the proliferation of various technologies, such as artificial technology. Artificial technology is a machine’s ability to decide on something independently after data collection and analysis. While AI is synonymous with automation, it has seen wide applications in businesses, including in various departments such as accounting and finance, customer care, and marketing.
In customer care, companies have adopted chatbots that improve customer experience and lead to the attraction and retention of new customers due to better and improved service. In accounting and finance, adopting AI has led to the minimization of errors and an increase in productivity and efficiency. In marketing, it is applied in all customer touchpoints and provides insight into consumer behavior. It assists in decision-making about the product to provide to a particular segment and the medium to use. Companies worldwide have massively adopted AI as they seek to benefit from its multiple advantages. However, AI also has several disadvantages, including high initial outlay costs, risks of dependence, and others.
In the UAE, the adoption of AI in recent years has seen companies re-orient their businesses and how they serve their customers. In particular, a primarily youthful population with the propensity to order online has seen many businesses use AI to attract and retain customers. In particular, the use of chatbots is huge in the UAE, where interactive and engaging marketing content and messages are sent to customers through third-party platforms such as Instagram, Twitter, and Facebook. Domestic and international brands have been adopted as a central entry point for companies intending to do business in the Gulf countries. They are pioneering AI in their marketing activities.
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