How Marketing AI Can Accelerate Your Private Equity Firm’s Growth

How Marketing AI Can Accelerate Your Private Equity Firm’s Growth

As competition for investors and deals has grown increasingly fierce, tapping into the transformative potential of marketing artificial intelligence (AI) is no longer just a strategic advantage for private equity firms—it’s a competitive necessity. In fact, the global market for marketing AI is likely to reach $107.5 billion by the year 2028—a more than sevenfold jump from just $15.8 billion in 2021.

Despite its explosive growth, we have only just scratched the surface when it comes to the potential of marketing AI. It already extends far beyond merely generating text with tools like ChatGPT and Jasper, and the future possibilities are seemingly endless as marketing AI continues to evolve.

Private equity GPs who recognize this and drive the adoption of marketing AI throughout their firms and their firms’ portfolio companies will ultimately outpace their competitors—particularly in raising more capital, sourcing qualified deal flow and supporting portfolio company growth.

What is Marketing Artificial Intelligence?

Put simply, marketing AI is the integration of advanced technologies like machine learning, natural language processing and computer vision to automate and improve marketing tasks. It streamlines processes, optimizes decision making and enhances the effectiveness of marketing strategies.

Marketing AI can empower private equity firms and their portfolio companies to gain a deeper understanding of their investors and customers, ultimately translating into higher top-line revenue and greater bottom-line efficiencies. While it is certainly powerful on its own, the real power of marketing AI lies in the partnership between human and machine. This is where the real magic happens.

How Private Equity Firms Can Leverage Marketing AI

From supporting content creation to optimizing lead generation and campaign management, the potential applications of marketing AI in the private equity space are undoubtedly vast—and even a little intimidating at first. This begs the question: where should you even start to reap the benefits? Here are four simple ways that private equity firms can leverage marketing AI:

1. Content Creation

Beyond written content, marketing AI tools help to diversify creative outputs, enabling private equity marketers to expand their content creation efforts to audio (WellSaid, Murf), images (Dall-e, Midjourney) and video (Pictory, Synthesia). Not only does this boost engagement, but it frees up valuable time for those marketers to focus on high-impact tasks like strategy, editing and storytelling—ultimately leading to more successful marketing campaigns.

2. Lead Generation

Marketing AI can help identify and rank potential sales leads, enabling private equity marketers to focus on the most lucrative prospects. Performance Max, a new feature within the Google Ads platform, is an example of this technology. It uses machine learning and audience signals to optimize campaign performance and, ultimately, maximize conversions across Google’s advertising channels. The use of marketing AI in lead generation can also provide predictive analytics, allowing firms to anticipate market trends and tailor their strategies accordingly.

3. Campaign Management

By leveraging the predictive power of AI, marketing campaigns can be fine-tuned for enhanced targeting, personalization and timing—ultimately leading to improved outcomes. An example of this application is Seventh Sense, which employs AI to optimize the timing of email deliveries in order to boost engagement and overall email marketing performance. Marketing AI tools can also offer dynamic content personalization based on individual user behavior and preferences, ensuring a more highly targeted and effective approach to private equity marketing.

4. Media Monitoring & Analysis

Marketing AI tools are adept at autonomously monitoring and evaluating a brand’s presence across diverse media platforms, such as social media, news outlets and blogs. They can even analyze patterns and predict shifts in market sentiment. BrightEdge offers a notable example of this with its AI-powered tool called Insights, which functions as a digital data analyst. This tool methodically searches through millions of web pages, supplying private equity marketers with data-driven recommendations for their SEO and content marketing strategies.

Leveraging AI tools in each of these areas allows private equity firms to save time, base their decision making on solid data, and enhance the effectiveness of their marketing campaigns. This will ultimately equip those firms to attract more investors, boost deal flow and generate more qualified sales leads.

AI Considerations for Private Equity Marketing

In order to truly reap the benefits of marketing AI, it’s crucial to set your team up for success before initiating the adoption of AI technology across your firm and its portfolio companies—from acquiring foundational AI knowledge and cultivating a skilled team, to ensuring any ethical considerations. Here are several key ways that private equity marketers can integrate AI more effectively:

1. Seek Knowledge of AI

Gain a fundamental understanding of AI, including core concepts like machine learning, natural language processing and computer vision. Then, keep learning all you can about the potential uses of marketing AI. This technology is rapidly evolving, and those who keep up will stay ahead of the competition. Numerous online resources such as tutorials, courses and articles are available. A great resource is the Marketing AI Institute.

2. Identify Application Areas

Pinpoint specific business areas where the use of marketing AI can boost efficiency and/or effectiveness. As discussed above, this can include content creation, media monitoring of a firm’s portfolio companies, and optimizing campaign management strategies. Expanding the scope to areas like predictive analytics and customer journey mapping can ensure a comprehensive integration of AI into various facets of a marketing strategy.

3. Research Marketing AI Tools

Explore the wide variety of marketing AI tools available, which vary in their capabilities, pricing and technical requirements. It’s important for private equity marketers to select tools that align with their firm’s unique needs and portfolio characteristics. Considering other factors, such as the ability to handle large datasets and integrate seamlessly into existing marketing infrastructure, is also crucial for smooth implementation.

4. Initiate Pilot Projects

Begin with modest pilot projects using AI-driven tools, assessing their functionality and setting achievable objectives. Then, leverage the wins from these pilot projects to secure resources for broader implementation. Piloting marketing AI tools in real-world scenarios allows private equity firms to gauge their effectiveness, identify areas for improvement, and build a compelling case for scaling up AI adoption across the firm.

5. Consider the Ethics

Remain vigilant about the ethical use of marketing AI. Take any necessary precautions to ensure that the data used for training AI models is free from bias and will not lead to discriminatory outcomes—especially within the sensitive context of private equity investments. Addressing ethical considerations involves establishing clear guidelines for data privacy, transparency and responsible AI use within the marketing framework.

6. Monitor & Refine Performance

Continually assess the effectiveness of different marketing AI tools, making any necessary adjustments as each tool progressively learns, adapts and enhances its capabilities over time. Regular performance monitoring will help to ensure that these tools align with evolving business objectives and support the overall effectiveness of marketing campaigns. Implementing a feedback loop allows private equity marketers to iteratively refine their use of AI based on real-time insights and performance metrics.

7. Develop a Skilled Team

Build a team proficient in data science and AI technology that will be responsible for managing and leveraging these tools effectively. This may involve recruiting new talent and/or upskilling existing staff across your firm and its portfolio companies. Investing in ongoing training programs and fostering a culture of continuous learning will ensure that your firm remains agile and well-equipped to navigate the evolving landscape of AI technology.

8. Align AI Initiatives with Overall Business Strategy

Align marketing AI initiatives with your firm’s broader business objectives. To ensure a smooth and cohesive approach, be sure to coordinate the adoption of AI tools with key stakeholders across your firm and its portfolio companies—particularly if those applications span multiple business areas. This strategic integration will ensure that AI becomes an integral part of the firm’s long-term growth strategy.

By using these steps to harness the power of AI technology, private equity marketers can position their firms at the forefront of innovation and efficiency in investor relations and portfolio company growth.

A condensed version of this article originally appeared in Crain’s Cleveland Business.

 

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About The Author

As president, Brad Kostka leads business development, agency management and account services. His experience includes communications strategy, branding, content marketing, media relations, marketing automation, investor relations and event planning. Over his 25-plus-year career, he has worked with organizations ranging from global, publicly traded corporations to local startups.