Consumers are becoming increasingly sophisticated when it comes to technology. They are no longer wowed by the mere mention of artificial intelligence (AI) in product descriptions. In fact, recent research indicates that the application of the term AI can actually have a negative impact on consumer behavior.
According to a study by Washington State University, consumers may be less likely to trust and purchase products that are explicitly labeled as using AI. This shift in consumer sentiment can be attributed to several factors. As AI becomes more prevalent, consumers are becoming more aware of its potential risks and limitations. They are increasingly concerned about issues such as privacy, bias, and security.
Moreover, the term AI is often used as a marketing buzzword, leading to skepticism and distrust among consumers. They may perceive products labeled as AI-powered as being gimmicky or unreliable. The study’s findings have significant implications for marketers and product developers. It suggests that simply slapping the AI label on a product may not be enough to attract consumers.
This underscores a critical challenge for marketers and product developers: navigating the fine line between showcasing AI’s potential and overhyping its capabilities. It’s clear that a more nuanced, transparent approach is needed. To gain deeper insights into how industry leaders are adapting to this evolving landscape, we’ve reached out to leading marketing experts to gain their perspectives on this critical issue.
Value for Customers Matters More Than Buzzwords
Thomas Been, Chief Marketing Officer, Domino Data Lab
As a marketing leader and a consumer/customer, I see a lot of bad behavior. I’ll summarize the four common mistakes when using AI in your marketing approach, which revolve around the same idea: what is the value for customers?
AI is not your product. Although AI might be the main component of your product, I’d argue that way fewer companies for which this statement is true than their marketing would lead you to believe. Many marketers confuse AI for the product.
The word AI does not make your product or marketing copy better. What is the purpose of your product, and what is the benefit to customers? Surely, you’ve used AI in your offering to make these even better. If not, you don’t have a marketing problem. You have a product problem.
What’s in it for them? Have you clearly explained why AI matters in your context? Can you express it in tangible terms? It’s not sufficient to do incantations of words like AI, LLM and others in your copy. Show your difference!
Where’s their data going? Customers are more sophisticated indeed, and recognize the power of AI, and the fact it uses their data. They’ve been burned by social networks about sharing their data. So, they’re wondering if you’re just collecting more of their data, and what you’ll do with it. This is even more important when your customers are businesses.
Highlight the Enhancement, Not Just the Technology
When AI is used and marketed correctly, i.e., as a set of technologies that enhance the product, it can be addressed in most products. Of course, AI in that context needs to be proven valuable and trusted. Unfortunately, many marketers take shortcuts and just promote AI. This is not enough and hardly differentiating.
Integrating AI Governance Across the Organization
AI governance, responsible AI, and data security are not marketing responsibilities. The whole business needs to be built around these principles and the governance to match. This is extremely important, not only in the eyes of consumers/customers but also of regulators. Under the EU AI Act and California SB 1047, many regulations will apply to the use of AI. Marketers need to reflect that their organization leverages AI responsibly by promoting it with transparency and accountability.
The AI-Human Synergy: 30% Automation, 70% Innovation
About 30% of our marketing work is done with the help of AI tools, in domains like copy creation or analytics. But that’s not the way I look at it. The time we gain with AI is used elsewhere, such as finding creative ideas and communicating. This is how AI augments marketers, instead of replacing them.
Balancing Hype and Consumer Trust Across Different Markets
Smita Gupta, Founder & CEO, SG Growth Advisory
I have certainly witnessed an increase in using ‘AI’ to describe products and services, often without further explanation of the specific uses or outcomes. Attaching the term in a generic way does not contribute to either improving consumer trust or demonstrating your business as cutting-edge technology. Recently more questions have been asked of businesses that mention AI, an exercise that is important for improving trust around AI technology and practicing transparency.
The clients I work with are mainly based in the UK, US and Asia, and I’ve seen different reactions to the use of AI. In Asia, there is more acceptance around technological advances and trust in Big Tech companies, so the mention of AI is often expected. UK consumers are more skeptical and protective of data through regulations such as GDPR, so transparency is key. The US sits somewhere between these two, with AI widely in use where the benefits are portrayed (such as Netflix recommendations) but there are increasing concerns about ethical AI and ensuring biases are addressed.
Focus on Benefits, Not Buzzwords
I work predominantly in the tech, Fintech and cloud sectors, so naturally AI is widely used and accepted. Buyers want to see that these products are smarter and more streamlined than competitors’ but more importantly, buyers want to know what the benefits are for them. The use of AI in marketing for consumer products has been premature as current understanding is based on the likes of ChatGPT rather than more sophisticated models, and as a result this has brought about distrust.
AI Marketing Requires Clear Communication
It is very important to be transparent about AI’s role, benefits and risks. Adding a generic ‘using AI technology’ is neither impressive nor comforting to buyers. Marketers should clearly communicate how the product collects and uses consumer data, the potential biases and how they are addressed, and how the product complies with regional standards and regulations. Maintaining your business’ human aspect is also important, so be clear about the processes in place to validate AI outcomes and the open dialogue forums available for consumers. Don’t assume that any information is ‘too much’ for consumers – they are likely to comforted by transparency around your internal governance and ethical AI practices, and always provide the option for consumers to tailor their privacy settings and access their data.
Twenty Percent Adoption and Growing
As a business I’d estimate we use AI for around 20% of our marketing initiatives, across research, content generation, and analytics. We test a number of tools ourselves ahead of recommending them to clients; I am currently evaluating the AI tool Lucia, a management reporting software, to be used for reporting to clients and for internal teams to improve their processes.
The Thin Line Between Enhancing Value and Raising Doubts
Elena Sanchez, Head of Marketing ASIA, at Gentrack
AI in marketing is a double-edged sword: it can either enhance value or raise doubts, depending on how it’s presented.
Doubts arise because AI is still largely experimental, and many consumers remain skeptical. There’s no formal certification or verification process for AI, which contributes to this lack of trust. The typical consumer’s first encounter with AI is often through a website chat bot, which, more often than not, leads to frustration rather than resolution. These bots are often limited to handling basic FAQs, and when they fall short, leaving a negative impression.
Additionally, anyone who has used generative AI tools like ChatGPT or Gemini can attest that while they are impressive, they’re not infallible. They make mistakes, have gaps in their knowledge, and can’t be fully trusted. So, claiming that a product uses AI might indeed backfire unless it’s clearly communicated that the technology is reliable, tested, and secure, especially with data protection being a major concern for consumers.
On the other hand, AI adds significant value when it is properly explained, tested, and backed by a reputable brand. In my experience with marketing enterprise software in Asia, AI and machine learning have become nearly indispensable. When integrated into software solutions, AI can automate tasks, provide pre-written emails for customization, or predict user behavior, such as forecasting electricity consumption, all of which make life easier and improve both customer and employee satisfaction.
The key difference here is that enterprise software sales involve a longer sales cycle, including customized demos and in-depth explanations. This process allows buyers to understand and appreciate the value of AI, ultimately transforming it from a potential risk into a must-have feature.
User Delight and Consumer Apprehension
There are certain categories of products that really benefit from AI. For example, enterprise or consumer software. In this case, users will benefit from the AI tools inbuilt in the software such as Canva or use an AI mobile app to play with it and become a cartoon.
However, any traditional product where we don’t understand how AI is used, might have a negative connotation that might lead buyers to feel like a guinea pig and think this is “experimental, not tested and might be wrong”.
The Key to Turning Skeptics into Believers
When mentioning AI in marketing materials, my advice would be to clearly and visually explain with examples what does that mean, how does AI add value and at the same time, address all the concerns around data protection/security that users might have.
Balancing Act: Blending 25% AI with 75% Human Insight
Currently, approximately 25% of our marketing initiatives incorporate AI. I leverage AI extensively in our day-to-day operations to optimize time, automate tasks, and free up resources for more strategic activities. AI tools play a crucial role in various aspects of our campaigns, from market research and content creation to proposing text copy. In the past, I’ve also successfully utilized automated bots for nurturing campaigns.
However, the majority of our strategy, around 75%, is driven by human insight, experience and hard work. While AI serves as an invaluable tool that enhances efficiency and effectiveness, it doesn’t dictate our marketing strategy. Instead, we use AI to complement our human decision-making, adding some speed and creativity into our day to day.
