Every UK startup has heard about artificial intelligence (AI) a million times at this point, and most are now considering using it in their own business — if they haven’t already.
After all, AI can have some serious benefits for businesses. But if it isn’t implemented adequately, new research suggests it can lead to pretty disastrous results for customer retention if the technology is not used effectively or transparently.
As AI continues to evolve, businesses are under pressure to embrace this technology to remain competitive. However, the rush to adopt AI comes with some serious challenges.
With many AI projects failing in the last year, it seems that businesses are stuck between the need to adopt the technology and risking brand reputation among customers.
Small businesses feel pressured to adopt AI
The government has placed UK startups at the heart of its strategy to become a global leader in artificial intelligence. Called the “AI Opportunities Action Plan“, it was unveiled in January, alongside a raft of investment and policy directives to target this sector.
Traditionally, new businesses are associated with the development of cutting-edge technologies. But in the fast-growth sector of AI, even startups are struggling to keep up.
According to a survey by Startups, 82% of UK businesses feel under pressure to adopt emerging technologies, including AI. Technology businesses reported the highest pressure (23%), followed by 22% of hospitality firms.
As well as government pressure, another cause could be herd mentality. While the tech is more prevalent in larger firms, 15% of startups now say they use at least one kind of AI technology. Keeping ahead of the competition is a key concern for emerging businesses.
However, many businesses that tried to integrate AI have seen those projects fail. Research by OneAdvanced revealed that 52% of businesses have attempted to adopt AI into their everyday operations, but 36% of those efforts were unsuccessful.
The controversy of generative AI in marketing
One area where AI can be risky to rollout is marketing. AI marketing tools have become an increasingly popular way for businesses to create personalised marketing assets, improve targeting, and boost overall campaign performance.
According to a study by LocaliQ, 53% of organisations are utilising AI in their marketing strategies, while 11% plan to do so in the future. Moreover, 63% of businesses are using AI for written content, while 32% use it for graphic design and 31% for image/video generation.
While these avenues may be more cost-effective and quicker than hiring a copywriter or graphic designer, AI-generated content has seen significant controversy in recent times.
Take Coca-Cola’s Christmas ad last year, which was created with Real Magic AI. The 15-second video advert depicted scenes of the iconic red Coca-Cola trucks, much to the delight of virtual townspeople and polar bears.
Fans were quick to express their distaste for the ad, describing it as “disastrous”, while others called it a “creepy dystopian nightmare”. Others also argued that it was a poor attempt to cut labour costs in the film and technology industry, in turn risking jobs.
The Queensland Symphony Orchestra came under fire last year for using an AI stock image, to advertise an upcoming concert. In the image, a couple with multiple fingers sat in the stalls while a group of identical violinists played behind them.
And we all remember the disaster that was Willy’s Chocolate Experience in Glasgow, where the organiser used AI-generated images with notable spelling errors to promote an unlicensed event in Glasgow that was anything but magical for visitors.
Consumers don’t trust brands that don’t implement AI properly
These instances of AI marketing gone wrong may give us a chuckle. But they can also act as cautionary tales for businesses that rush into using AI tools.
It’s not that AI in advertising is inherently wrong. Another report by Click also found that 61% of customers also said their purchase decisions wouldn’t be influenced if a business used AI-generated content in their marketing.
But that doesn’t mean implementation isn’t important, as startups risk losing customer loyalty if they don’t use it effectively. In fact, 50% of Brits say they distrust brands that don’t handle AI properly, according to photo editing software Photoroom.
What counts as “proper” AI marketing is of course, subjective. Establishing clear guidelines for quality assurance so that team members can check for errors is one answer, but this takes time and training.
Businesses are on a tightrope, trying to find the balance between the need to adopt AI to stay competitive with the risk of losing customer trust if they don’t get it right.
AI can be beneficial, but don’t rush into adoption
AI has a lot to offer businesses, especially when it comes to marketing practices. But for startups, the key isn’t just adopting AI for the sake of it. It’s about using it wisely, testing things out and making sure it fits with what your customers expect.
Firms are feeling the pressure to hop on the AI train. But jumping into AI without a solid plan can backfire, leading to mistakes that could hurt your brand and alienate customers.
