Use of AI-Driven Targeted Marketing on Instagram by Online Retail SMEs

Abstract

Artificial Intelligence is applied nowadays throughout industries, including business. There, it is used not only by large companies but also by small and medium-sized enterprises. It is especially beneficial for SMEs engaged in online retail, as they aim to implement targeted marketing, and AI systems can implement a range of tasks there. However, the use of AI by online retail SMEs for targeted marketing has yet to be studied thoroughly, and there is a need to determine how these companies utilize AI and what the future perspective is. The research was focused on the implementation of targeted marketing on Instagram. For these purposes, the blended research was conducted. Interviews with seven online retail SMEs were led to explore their experience with AI technologies for targeted marketing. Also, the survey with 50 participants was conducted to study what Instagram users think about the integration of AI systems into Instagram marketing by SMEs. Qualitative content analysis and descriptive analysis of findings led to answering research questions and determining how online retail SMEs use AI for targeted marketing on Instagram, which benefits it brings to companies and customers, and the future perspective. The research led to the conclusion that natural language processing, analytics systems, computer vision, and image recognition are highly efficient in Instagram marketing. Also, it showed that now Online retail SMEs mostly utilize AI at the basic level, but this practice is actively developing and, in the future, should become more common. Moreover, the value of applying AI for targeted marketing on Instagram was seen by businesses and customers controversially with both positive and negative aspects.