Case Study: How Netflix Uses AI to Personalize Content Recommendations and Improve Digital Marketing

Netflix is a widely loved streaming service, and it owes much of its popularity to its personalized content suggestions. Here is how it works in simple terms: Netflix employs artificial intelligence (AI) to keep an eye on what each users watches, what they like and what they rate highly. Then based on this information, it suggests other shows and movies that users are likely to find interesting. This personalized tough is a big reason why Netflix is such a hit!

In simple terms, you can think of Netflix’s AI as your personal T.V match maker. It understands, your viewing preferences and uses that knowledge to help you find movies and shows that you would love.

Netflix’s AI is pretty good at its job. In fact, back in 2016, Netflix CEO Reed Hastings mentioned that “Over 75% of what people watch on Netflix is discovered through our recommendation system.”

Fast forward to 2020, Netflix revealed that 80% of the content viewed on the platform comes from these personalized recommendations.

So how does Netflix’s AI work?

Here’s a simplified overview:

• Netflix tracks what you watch, how long you watch it, and whether you finish it.
• Netflix then figures out what kinds of shows and movies you are into, like genres, theme, and actors you prefer.
• Netflix then rates each show and movies based on the factors like popularity, user ratings, and how well they match your taste.
• Netflix then uses this information to create a custom list of recommendations just for you.
• Netflix relies on advanced machine learning algorithms to analyze data and produce suggestions. These algorithms can spot patterns and trends in user actions that would be challenging for humans to detect.
• Netflix considers various factors when making recommendations, such as:
• What shows and movies have you watched in the past?
• How long did you watch them for?
• Did you finish them?
• What ratings have you given to shows and movies?
• What shows and movies have other users with similar preferences watched?
• How popular are different shows and movies?

In simple terms, Netflix AI keeps getting smarter as you watch more content. It learns from your choices and becomes better at suggesting shows and movies that you’ll like.

What are the benefits of AI for Netflix and its users?

There are many benefits of AI for Netflix and its users. For Netflix, AI boosts user engagement and keeps them from leaving the platform. When users regularly discover the content they love, they are more likely to stay. For users, AI makes it easy to find the content they enjoy and saves them time through scrolling through Netflix’s library.

Here are a few tips for businesses from the Netflix case study:

• Collect data on your customers’ actions and preferences. You can use this data to tailor your marketing messages, suggest products and enhance the overall customer experience.
• Use AI to examine your customer data and uncover valuable patterns and trends. This information can guide smarter business decisions, including product development, target markets, and pricing strategies.
• Use AI to personalize your marketing messages and suggest products that resonates with individual's customer preferences. When customers feel like that you understand their needs and interests, they are more likely to become loyal customers.
• With the help of AI, you can make it simple for customers to provide feedback. Their feedback can be helpful to improve your products and services, and to make sure that you align with your customer needs.

Conclusion

So, wether you are streaming giant or small business, AI can be your secret sauce. Learn from the Netflix’s playbook and start creating personalized experience for your customers. With a touch of AI, you will be impressing your audience and turning them into your life long fans faster than you say “binge-watch.”

Here are the links to the sources I reached for this case study:

Top 10 Ways Netflix is Using Artificial Intelligence in 2022 (analyticsinsight.net)

Netflix Recommendations: How Netflix Uses AI, Data Science, And ML | Simplilearn

Netflix’s Recommendation Engine Drives 75% of Viewership (businessinsider.com)

This is how Netflix’s top-secret recommendation system works | WIRED UK

What do you think of this artificial intelligence (AI) magic?

I hope this article was informative and entertaining. Now go forth and watch some Netflix!

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