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The artificial intelligence-based personalization market size is estimated to increase by USD 2.54 billion and grow at a CAGR of 20.45% between 2022 and 2027. Mass marketing, which indiscriminately targets all users regardless of their preferences, frequently results in an influx of unsubscribes due to irrelevant content. However, AI-driven personalization offers a solution to this challenge by customizing messages according to individual behavior, preferences, and past interactions. This targeted approach ensures that users receive content that is relevant and engaging to them, thereby reducing unsubscribe rates and improving overall marketing effectiveness. By harnessing the power of AI-driven personalization, businesses can enhance customer satisfaction, increase engagement, and ultimately drive better results in their marketing efforts.
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This report extensively covers market segmentation by application (website personalization, display ads personalization, social media personalization, e-mail personalization, and others), technology (machine learning, deep learning, and natural language processing), and geography (APAC, North America, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
The market share growth by the website personalization segment will be significant during the forecast period. The most widely used advertising method is Website personalization. This holds the highest share of the global AI-based personalization market and is expected to continue its dominance during the forecast period.
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The website personalization segment was valued at USD 386.62 million in 2017 and continued to grow until 2021. Website personalization is the most effective way to provide customized information to a targeted group and can help increase the conversion rates of new visitors and retention rates of existing customers efficiently. Advertising through websites is the most effective in the retail sector for online shopping of groceries, clothes, and accessories such as shoes, belts, and sunglasses. It is imperative for companies to personalize their websites according to the specific needs of customers to increase sales. Personalization includes instant discounts for first-time users. However, marketers face certain challenges in personalizing content, such as the inability to combine data to draw valuable insights, difficulties in identifying the right segment of people to target with specific content, and difficulties in measuring the impact on targeted consumers. These challenges can be addressed by AI-based personalization, which is expected to drive the growth of the segment during the forecast period.
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APAC is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
China is a prominent market in the global market. Many major AI-based activities, including surveillance, are gaining prominence in the country. Moreover, start-up companies focused on providing AI-based solutions are emerging in the country. China is followed by Japan and Australia, where AI-based personalization is being adopted in the fields of marketing and advertising.
Furthermore, the growing awareness of the benefits of using AI-based personalization will increase the regional market share. Other driving factors are the increase in the number of consumers opting out of mass marketing and the increasing use of smartphones. Such factors will drive the regional market's growth during the forecast period.
The market is propelled by the growing demand for tailored consumer experiences across industries like e-commerce, healthcare, and finance. Leveraging AI algorithms, businesses analyze customer engagement patterns, preferences, and behaviors to deliver personalized marketing campaigns and dynamic pricing strategies. This personalized approach not only enhances customer satisfaction and loyalty but also drives conversions and revenue growth in the e-commerce sector. However, challenges such as ethical considerations surrounding bias and discrimination, along with privacy concerns and the initial financial investment required, necessitate careful navigation for businesses seeking to implement AI-driven personalized marketing solutions.
Despite these challenges, industries are increasingly recognizing the value of AI-driven personalization in driving immersive experiences and improving customer engagement. In healthcare, AI-driven personalization enhances patient outcomes by delivering tailored treatment plans, while in industries like automotive and travel, personalized marketing initiatives foster brand loyalty and satisfaction. Balancing AI-driven automation with human intuition and ensuring transparent communication about data usage and ethical considerations are critical factors in overcoming challenges and maximizing the potential of AI-based personalized marketing solutions across diverse industries.
Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The market is propelled by the significant challenge of high unsubscribe rates in mass marketing. Mass marketing, which targets all users uniformly regardless of their preferences, often leads to a surge in unsubscribes due to irrelevant content. However, AI-driven personalization addresses this issue by tailoring messages based on individual behavior, preferences, and past interactions. By leveraging machine learning algorithms, marketers can deliver messages that resonate with each recipient, leading to improved click-through and conversion rates. This increasing need for message personalization, driven by the shortcomings of mass marketing, fuels the demand for AI-based solutions, thereby driving market growth during the forecast period.
Advances in AI and ML are emerging trends in the market. The growth of artificial intelligence and machine learning along with the advancement of technology is making people's lives easier. Advances in artificial intelligence include integration with the Internet of Things (IoT) and the cloud, where connections between different devices improve, allowing machines to better understand human needs.
Investments in AI have tripled in recent years as the demand for AI has increased for various applications. Investments and the growth of the use of artificial intelligence increase the availability of information in various segments and require the development of data analysis methods. Machine learning uses an algorithm that learns about customer behavior, habits, and buying patterns to suggest strategies to improve customer satisfaction. Such factors will have a positive impact on the focused market's growth during the forecast period.
Lack of skilled resources and technological know-how is a major challenge impeding the market. Most marketers believe that they can increase sales by personalizing content for customers. However, the challenge for marketers is the lack of resources and technology for personalization. The technology and level of customization vary depending on the type and size of the organization. The content must be adapted to the specifics of the company and customers. This makes it difficult for marketers to use existing technology in a way that connects their business and provides proper personalization.
In addition to the technical disadvantages, many people are not aware of the technical problems of software implementation because the technology is new. There is a huge lack of skilled workers. This creates uncertainty about usability once AI is deployed. This is a challenge for the global market. In addition, the growth of industries and companies around the world has resulted in the creation of massive amounts of data. These data sets cannot be processed using a single machine. Thus, AI and cybersecurity professionals need to have in-depth knowledge of programming languages. Thus, the aforementioned factors pose a challenge and hinder the growth of the market during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
BloomReach Inc. - The company offers a wide range of engagement, discovery, and content products. The key offerings of the company include artificial intelligence-based personalization solutions.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The artificial intelligence market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
The market is witnessing exponential growth, revolutionizing industries like e-commerce, healthcare, finance, and travel. AI algorithms drive dynamic pricing strategies and personalized recommendations, enhancing customer engagement and loyalty. Augmented reality and virtual try-on experiences provide immersive content delivery, while virtual assistants streamline interactions. Data usage and protection regulations address privacy concerns, ensuring transparent communication and trust. Ethical considerations guide responsible AI implementations, mitigating bias and discrimination. Brands leverage customer data to craft targeted campaigns and personalized promotions, fostering brand loyalty. With predictive analytics optimizing pricing structures and customer experiences in real-time, AI-driven personalized marketing shapes the future of consumer choices and brand engagement.
Additionally, the market is experiencing a profound transformation across industries like automotive, travel, and hospitality. Leveraging AI algorithms, companies enhance customer engagement by analyzing individual behavior and preferences to tailor immersive experiences. This personalized approach fosters customer loyalty and retention, aided by the collection and storage of high-quality data within ethical and privacy regulatory frameworks. Brands such as Netflix and Spotify utilize AI to deliver personalized recommendations and discounts, while ensuring transparency and responsibility in data usage. Human intuition is augmented by AI-driven insights, optimizing marketing messages and value propositions. Voice assistants and virtual reality further elevate customer journeys, solidifying AI's pivotal role in shaping the future of personalized marketing.
Artificial Intelligence-Based Personalization Market Scope |
|
Report Coverage |
Details |
Page number |
180 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 20.45% |
Market growth 2023-2027 |
USD 2.54 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
13.78 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 35% |
Key countries |
US, China, Germany, UK, and France |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Accenture Plc, Adobe Inc., Alphabet Inc., Amazon.com Inc., Apple Inc., BloomReach Inc., Blueshift Labs Inc., BOUNTEOUS, Crownpeak Technology Inc., H2O.ai Inc., Infinite Analytics Inc., International Business Machines Corp., McDonald Corp., Microsoft Corp., mParticle Inc., Salesforce.com Inc., Sitecore Holding II AS, Verint Systems Inc, ViSenze Pte. Ltd., and ZS Associates Inc. |
Market dynamics |
Parent market analysis, Market forecasting Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our market research report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Technology
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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