AI in Marketing: A Double-Edged Sword

According to a breakthrough study by WSU, something few have taken into consideration is that mentioning AI in the sales of products actually can turn off the buyer, thus killing sales. This research was published in the Journal of Hospitality Marketing & Management and stands in sharp contrast to what has long been accepted: that AI is, or should be, a panacea for marketing.

In a survey of over 1,000 U.S. adults, the researchers pitted consumer reactions to the very same product descriptions, with and without the use of the shorthand label “artificial intelligence.” And the results were all very consistent across a wide array of product categories, from smart TVs and high-end electronics all the way to medical devices and financial technology: products that were billed as using AI tended to fare worse.

The leader of the group, Mesut Cicek, associate professor at WSU, drew attention to the fact that AI mentions damage consumer trust. “Our findings demonstrate that mentioning AI in a product description explicitly can severely depress emotional trust. This depressed emotional trust then makes their purchase intention even more negative,” Cicek said.

It went ahead to explore how AI mentions relate to different product categories. One of the interesting findings was the heightened aversion to AI across high-risk products. These are usually characterized by high levels of financial or safety impact and thus can easily evoke consumer anxiety and uncertainty. AI in the equation simply exaggerates these concerns.

“We tested the effect across eight different product and service categories, and the results always were the same: It’s a disadvantage to have those kinds of terms in the product descriptions,” Cicek said.

The implications for marketers are deep. The study underlines the need for nuance in one’s approach to AI messaging. While AI can revolutionize product development and delivery, mere mention in marketing material will not be effective.

Cicek wants marketers to be more selective about the areas in which they tout AI technology lest their touting frustrate consumers. As much as possible, he adds, marketers should emphasize what a product does and why it is useful rather than concentrating on what makes it tick. “Skip the AI buzzwords,” says Cicek, at least for risky offerings.

The research defines a love-hate relationship between consumers and AI. While AI is increasingly becoming an integral part of life, the public perception of this technology is not yet fixed. Normally, consumers are very careful about the potential implications that AI, in particular, on product categories, could have on their welfare or finances.

The dual challenge for marketers will be to empower AI-driven innovation in products while engendering trust in the technology among consumers. Transparency and trust are two sides of the same coin that need to be properly balanced.

The more advanced AI gets and the more it is being applied in each industry, the more critical it becomes to make sure that the care in messaging about its capability matches up. Collaboration by marketers and product developers on strategies that work toward developing a value proposition regarding AI-powered products, without instilling fear or uncertainty, becomes essential.

These findings call for action on the part of the marketing fraternity. As consumer expectations and preferences keep changing, marketers must be ready to attune themselves accordingly. These subtleties in perceptions toward AI may help marketers run campaigns that are more persuasive and consequently have a larger impact on sales and brand loyalty.

The Consumer’s AI Paradox: Trust and Technology

The finding that AI sometimes acts as a marketing inhibitor is quite a departure from the mainstream rhetoric in which technology and progress are indistinguishable from absolute good. If anything, this points to the convoluted dynamic between consumer perception, technological sophistication, and the nuances of marketing communication. What the WSU study peeled back was a consumer psyche willing to embrace the new with a gut feeling of wariness about losing control to algorithms.

In particular, consumer skepticism is high in high-risk product areas. In cases of financial or health-related decisions, consumers turn to concrete assurances and long-held trust. As something of a black box, the abstraction of AI is at odds with this desire for clarity and agency. While AI may offer an advantage of performance or efficiency, its actual presence within the marketing message may raise consumer fears.

To break out of this paradox, marketers will have to become sophisticated about how they communicate AI. This means that messaging associated with the technology alone will not be able to pull it out, but rather truly demonstrating value. For instance, instead of describing the AI that drove a recommendation system, marketers might more effectively speak to how the system was curated to answer specific interests of the consumer. It humanizes the technology and makes it relatable and less scary.

However, the question of confidence comes first. One can only explain AI transparently, specifying its limitations, and therefore it will help alleviate most of the consumer concerns. It has to be kept in mind that AI is a tool and not a replacement for humans. By repositioning it as a complementary tool that would allow experts in the field to be more effective or accurate than presently, marketers can inject a sense of collaboration and therefore reassurance.

It is the balance, however, between transparency and information that is viewed as proprietary. Information divulged about the inner workings of AI algorithms could possibly compromise a competitive advantage. Informed marketers will find a delicate equilibrium by providing enough information in a way that builds trust without revealing trade secrets.

The findings also underline the need to understand consumer psychology. Where AI may drive product innovation, it is finally an emotional feeling with the consumer that converts to sales. Marketers need to dig deeper into consumer motivations, fears, and aspirations to craft messages that would strike a personal note.

It raises wider questions about the ethical use of AI than its suggestions for product marketing. With increasing application of AI in our lives, there are deeper questions opened up. As such, the guidelines that dictate the responsible development and deployment of AI have a defined need to come up. Basically, transparency, accountability, and fairness are what AI ethics have to do with. Marketers can help to set an ethical framework by advocating for consumer protection and responsible AI practices.

The relationship with the consumer is dynamic and evolving, holding a great deal of promise, but successful integration into the marketplace will require an in-depth understanding of consumer psychology and a commitment to ethical practices. Only by striking a balance between technological innovation and human connection can marketers effectively exploit the power of AI while mitigating its risks.

Sources:

• https://www.searchenginejournal.com/ai-in-marketing-copy-a-surprising-sales-killer-study-finds/523664/
• https://intechsea.com/ai-in-marketing-copy-an-unexpected-sales-killer/
• https://www.linkedin.com/posts/metamorphic-marketing_ai-in-marketing-copy-a-surprising-sales-activity-7225553281903681536-gK2S
• https://seo.ctr.hk/blog/ai-in-marketing-copy-a-surprising-sales-killer-study-finds-via-sejournal-mattgsouthern-733.html

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