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How Algorithmic marketing can increase a Company’s turnover

 Many aspects in the last step of the marketing process, that of implementation and control, can be taken over by algorithms. Examples for the implementation of marketing strategies are, for example, the running of ads, the

launching of a website or the sending of e-mails. As discussed previously,

bots can display individualised Internet adverts. Bots can even take over the

creation, personalisation and sending of marketing campaigns by e-mail.

Even the creation of websites with the help of bots is possible, The Grid

has been offering a private beta version for this since 2014 (Thomas 2016).

The control phase at the end of the marketing process can be performed in

both a qualitative and quantitative way and is essential. Factors that should

be controlled are, among others, the reach of the campaign, marketing

budgets, customer satisfaction, market shares and sales. Algorithms can be

helpful in this case to measure the various factors and to make statements

about the efficiency of the campaign as well as to uncover potentials, such

as increasing the customer lifetime value, of reducing customer acquisition

costs. Apart from that, algorithms can improve the accuracy and efficiency

of the control. The evaluation and presentation of the analyses data can be

taken over by smart process automatisation software that is able to train

itself or be trained. It can perform more complex and subjective tasks by

recognising patterns. In addition, the data can be visually interpreted in the

shape of dashboards.



Amazon

One example is Amazon that uses algorithms and that even grew in the

recession. It is striking that the company has invested comparably high

amounts in IT (5.3% of the sales revenue), whilst the competitors Target

and Best Buy only spent 1.3% or 0.5% respectively. Amazon’s dynamic pricing responds to competitor prices and current stocks. The investment in

complex recommendation algorithms has automated 35% of the sales and

90% of customer support. This reduced the costs at Amazon by three to four

percentage.

Otto Group

The Otto Group applies big data and AI for marketing and media controlling. On the basis of customer touchpoint tracking, a customer’s activities can be systematically measured via various touchpoints such as search 3.6.5.1 Amazon

One example is Amazon that uses algorithms and that even grew in the

recession. It is striking that the company has invested comparably high

amounts in IT (5.3% of the sales revenue), whilst the competitors Target

and Best Buy only spent 1.3% or 0.5% respectively. Amazon’s dynamic pricing responds to competitor prices and current stocks. The investment in

complex recommendation algorithms has automated 35% of the sales and

90% of customer support. This reduced the costs at Amazon by three to four

percentage.

3.6.5.2 Otto Group

The Otto Group applies big data and AI for marketing and media con-

trolling. On the basis of customer touchpoint tracking, a customer’s activities can be systematically measured via various touchpoints such as search

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