The Role of AI in Strategic Marketing Decision-Making

Artificial intelligence (AI) is already being used in a variety of ways in marketing, usually at the operational level. As the technology evolves, the question arises: Is AI also about to make the leap to the strategic decision-making level?

Whether personalized product recommendations, chatbots in customer service, or sentiment analyses in social media, the applications of artificial intelligence in marketing are already diverse today. Numerous tasks and decisions at the operational level can already be automated by AI tools. Developments such as increasing computing capacities and advances in machine learning are also constantly improving the capabilities of intelligent machines. As a result, AI is becoming applicable to increasingly complex issues, meaning it could also change how strategic decisions are made. This refers to decisions that are long term, difficult to revise, and, moreover, often have to be made on a small or opaque database. In science and practice, the view is increasingly being expressed that AI has the potential to support marketing professionals in decision-making at the strategic level, to augment, or even replace them.

• 56% of companies already have use cases of AI in strategic marketing decisions.
• Managers are predominantly open to hybrid decision-making processes in which they make decisions together with intelligent machines. However, they want to retain control.
• There are a variety of obstacles that prevent, or at least complicate, the rapid implementation of AI in strategic marketing decisions.

To date, detailed insights into whether and how humans and intelligent machines already work together in making strategic marketing decisions have been lacking, and many questions remain unanswered: What role do intelligent machines play at the strategic decision-making level? What are marketing professionals’ desires and preferences going forward, and are they willing to share decision-making power with or even relinquish it to machines? What obstacles do they see to elevating AI to the strategic decision-making level? To get to the bottom of these questions, NIM interviewed five hundred high-ranking executives from companies on the Forbes Global 2000 list (C-suite or Direct Reports) related to marketing and strategy by telephone (CATI) as part of a standardized survey study.

For most of the respondents, AI in strategic decision-making was not completely unknown: 56% of the managers stated that there are already corresponding use cases in their companies (83% stated that they already use the technology at the operational marketing level). It turns out that managers are basically open to working with intelligent machines, but they want to have the upper hand. Thus, the respondents are willing to include AI in strategic decision-making processes in marketing and would like to give intelligent algorithms an average of 43% weight in the future, with 57% consequently remaining with human decision-makers.

The largest group of respondents currently describe AI as an “assistant” that takes over certain decision-support tasks. In the future, 46% would like to see AI in the role of a “collaborator” that controls certain parts of the decision-making process itself and is in constant interaction with human decision-makers. Even in this constellation, humans retain control over the overall process.

However, there are also obstacles that prevent or at least complicate the rapid implementation of AI in strategic marketing decisions. The nature of the obstacles depends on the company’s experience with AI and the number of use cases. Companies with little AI experience see the biggest obstacles as insufficient budgets, a dismissive attitude among employees, a lack of the right tenological infrastructure, a lack of expertise within the company, and a shortage of skilled workers. AI pioneers also see the last point as a hurdle. However, the biggest challenges for these companies lie in data-related issues, such as dealing with an insufficient database, a lack of transparency of algorithms, and problems in standardizing complex strategic decisions.

The majority of the top decision-makers surveyed in the study are positive about the future. They believe that AI will have a positive impact on their business area. This also assumes that the technical possibilities of AI will develop significantly and that AI will play an increasingly important role in shaping business and marketing strategies. Companies should address these developments in order to be prepared for a future in which humans and algorithms work together “with combined forces.”

• “The Role of AI in Strategic Marketing Decision-Making: How Will Managers Collaborate with Smart Machines - Today and Tomorrow?”, ISMS Marketing Science Conference, 16.–18.06.2022 (virtual) at the University of Chicago Booth School of Business
• “The Future of Strategic Decision-Making: What Will Human-Machine Collaboration Look Like on a Strategic Level?”, Advances in Decision Analysis Conference, 22. – 24.06.2022 (hybrid) at the Darden Business School, Washington DC Campus
• “Human-Machine-Collaboration in Strategic Business Decisions”, Exploring Next | APF Global Conference, 13. - 23.06.2022 (virtual)