The use of data and AI has already begun transforming advertising in a number of ways and is only going to become more prevalent in the years to come. People are seeing these changes in the personalized ads on their web browsers and the chatbots that help them make buying decisions.
AI in advertising is mainly used for two purposes: to create more targeted ads and to automate the process of buying and selling ad space. By using AI, advertisers can target ads more accurately to individuals based on their interests, search history, and demographics.
Let’s take a quick look at different parts of AI in advertising and how they are being used:
Machine Learning Capabilities
AI is driving cognitive advertising, which is powered by machine learning algorithms that automatically get smarter over time. Machine learning is also being used to automatically improve the user experience by analyzing new information and making decisions based on past data.
Utilizing Big Data And Analytics
Big data has become a big part of advertising, as advertisers are now able to collect more data than ever before. This data is being used to segment audiences, understand what people want, and track conversions.
Advertisers are also able to use data analytics to improve their campaigns by understanding what is and is not working. For example, if an advertiser sees that their ads are being shown to a lot of people, but no one is clicking on them, they can adjust their targeting or the type of ad they are showing.
Effective AI Platform Solutions
An AI platform solution can provide marketers with a central platform for managing large amounts of data. These platforms can make it easier to make data-driven decisions and understand your target audience.
How Organizations Can Use AI In Advertising?
The advertising landscape is ever-changing, which presents both challenges and opportunities for organizations. By understanding how AI is impacting advertising, organizations can be better prepared to take advantage of the opportunities and stay ahead of the curve.
Here are just some of the ways organizations can leverage AI in advertising:
1. Personalized Ads
In advertising, personalization refers to the use of data or consumer insights to increase an ad’s relevancy to its intended audience. This can be data that includes demographic information, interests, buying intent, or behavior patterns.
Increasing the relevancy of ads and making them personalized has become the top priority for many organizations. In fact, 80% of frequent shoppers say they only shop with brands that personalize their experience. 47% of B2C consumers point out that brands could do a better job aligning their engagement activities with their preferences.
That’s where AI comes into play. Conversational marketing is a great example of how AI can be used to create personalized ads. Such advertising helps brands build personal connections with their customers, improve existing relationships and create a better shopping experience.
According to a survey, 71% of customers expect companies to communicate with them in real time. This is why using AI conversational marketing can be an excellent way to engage with customers and create personalized experiences that improve ROI while strengthening customer loyalty.
2. Pre-Advertising Audience Segmentation
Advertisers can find patterns based on audience behavior and message resonance by leveraging machine learning. Machine learning makes use of all the information they have about a given individual, such as demographics and online behavior. This data is then used to make an informed decision on the type of content a niche segment would actually want to see.
It is important to understand an audience properly in order to increase engagement. Irrelevant content is the number one reason consumers don’t engage more often.
Proper audience segmentation and targeting leads to ads that are much more relevant to the consumer, which in turn results in a higher likelihood of conversion. A recent survey by McKinsey Analytics found that 14%* of users have adopted AI for customer segmentation purposes.
Organizations can expect higher engagement rates and more conversions by delivering messaging that relates to the end user.
3. Enhance Conversion
AI can make it easier for businesses to track conversions by understanding consumer behavior. Machine learning can analyze customer data and journeys to identify what causes someone to convert.
For this, AI looks at past behavior to identify patterns. This data can be used to predict what will happen next and how to optimize the user journey to improve conversions. Therefore, enabling advertisers to make more informed decisions and avoid spending of budget on those ads that don’t convert.
In addition, AI goes beyond traditional approaches like A/B testing. AI can make data-driven predictions about how creative messaging will resonate with customers. This allows organizations to be proactive in their approach to advertising rather than reactive, which can lead to more qualified leads and conversions.
Salesforce’s recent research ‘Enterprise Technology Trends’ found that 69% of IT leaders believe AI is transforming their business and 83% say it’s transforming customer engagement.
As an advertiser, you already know the importance of targeting the right person with the right ad to drive conversions. By using AI in your advertising, you can increase relevancy, personalization, and conversions.
4. Improve ROI
Artificial intelligence can be considered an analytical approach to advertising. To predict future trends and insights with accuracy, AI-powered tools take in a vast amount of data. The great thing about AI is that it uses artificial neural networks (ANNs), which function similarly to the human brain. ANNs continuously learn and evolve, making them better equipped to handle big data sets.
Unlike traditional methods, which require a lot of time and manpower to analyze data, AI can do it quickly and effectively. This helps organizations save on costs while still gaining valuable insights.
Knowing what’s working and what’s not is essential to any business, but it’s especially important in advertising. With the help of AI, businesses can fine-tune their campaigns for maximum ROI.
For instance, if a company is running an ad campaign on Facebook, AI can help track which ads are being seen by the target audience and how often. AI can also measure how long people spend on each ad and whether they click through to the company’s website. This data can be used to make adjustments to the campaign so that it is more effective.
According to Deloitte, 73% of AI adopters believe AI is “very” or “critically” important to their business today and 64% said AI technologies enable them to establish a lead over competitors.
By using AI in advertising, businesses can target the right audiences, with the right message, at the right time to reduce advertising waste and improve ROI.
5. Performance And Budget Optimization
As advertisers, we are always looking for ways to improve performance while staying within budget. But with AI, we can take things a step further. AI can help identify areas of waste and inefficiency and then recommend solutions for improvement.
For example, if you’re running a display ad campaign, AI can analyze past performance to identify which placements are working and which ones are not. It can then make recommendations for where to allocate your budget for maximum results.
In addition, AI can help you optimize your bidding strategy. By understanding how users interact with your ads, AI can help you make bids that are more likely to result in a conversion.
Organizations that use AI in advertising see, on average, a 19% increase in efficiency and a 12% decrease in costs.
AI is transforming the way businesses operate, and advertising is no different. Businesses like IBM, Microsoft, and Amazon are already using AI to improve their advertising efforts.
- Amazon uses AI in its programmatic advertising business. The company’s AI-powered ad platform, Amazon Advertising Platform (AAP), helps businesses automate the process of buying and placing ads.
- Amazon is not the only one using AI in advertising. IBM Watson Advertising is another AI-powered ad platform that helps businesses automate the process of buying and placing ads.
- Microsoft has also jumped on the AI bandwagon with its Azure Bot Service. The Azure Bot Service helps businesses create and deploy chatbots to automate customer interactions.
It is evident that AI is already transforming the advertising industry. And as AI technology continues to evolve, we can expect even more amazing things from it in the future.
By using Artificial Intelligence in advertising, businesses can improve performance, save money, and drive conversions. If you’re not using AI in your advertising, you’re missing out on a powerful tool that can help you stay ahead of the competition.