Artificial Intelligence Is Changing the World of Advertising

By Gwenever Pacifico • May 3, 2021

3 minutes

Artificial intelligence (AI) can increase a brand’s competitive advantage when it comes to digital advertising. From optimizing ad spend and improving performance to segmenting and targeting specific audiences, AI is transforming how companies market to consumers.

Customer relationship management systems and ad platforms provide a trove of data on impressions, click-through rates and demographics. While more data is better, humans can only process so much information. That’s where AI comes in.

With the right data, artificial intelligence can detect useful patterns, predicting campaign changes that would improve the effectiveness of each ad. And all this data analyzing can take seconds for the AI, instead of weeks for a human.

According to statistics portal Statista, $330 billion is projected to be spent on global digital advertising by 2021. With that much money on the line, it’s crucial for companies to leverage the power of AI to maximize ROI.

Optimizing Ad Spend with AI

By watching campaign performance in real-time, artificial intelligence is able to help advertisers determine how much to spend on digital ads. The ad spend plans factor in not only the monetary aspect, but also the target audience to figure out the optimal cost of each ad.

AI systems monitor market shifts and the behavioral changes of consumers to adjust ad spend dollars. Naomi Simson, co-founder of online marketplace RedBalloon, was spending $45,000 each month on ad agencies and paying at least $50 per customer acquisition. Needing to cut costs, she switched to Albert, an AI marketing platform that uses machine learning to optimize ad campaigns by analyzing data across ad accounts and customer databases. With the AI solution, Simson now spends 25% less on marketing, achieves 30% better results and her return on ad spend hit 3,000%.

Perpetua, an advertising software for Amazon and Instacart ads, also leverages AI to make the best bid at the best time on keywords that are the most likely to bring conversions. These optimizations maximize ad spend efficiency so a company’s marketing dollars don’t go to waste.

With so much data available, being able to utilize responsive AI-based ad systems can give brands a competitive edge. But what if browsers stop collecting certain kinds of data?

Source: Shutterstock.com

No More Cookies

Cookies are bits of data loaded onto a computer’s browser that lets marketers track what users do online. Apple’s Safari currently blocks all third-party cookies and Google’s Chrome is planning to do the same. Without this tracking technology to follow consumers around the internet, how will advertisers reach potential customers? AI is the answer.

Artificial intelligence can recognize patterns that cookies can’t. It can see that a user lives in Los Angeles, note that the weather is forecast to be 98 degrees and pitch an ad for sunscreen without needing any personally identifiable data.

According to Randi Stipes, CMO at IBM Watson Advertising:

Because of its inherent identifier-free data processing and machine learning capabilities, we believe that AI will be the backbone of the new digital economy and provide stakeholders across the ecosystem with greater value, confidence and trust.

By utilizing one of Watson Advertising’s AI solutions to identify brand-safe social media influencers, Hyundai was able to increase its positive sentiment score to 100%. Another retail brand that leveraged Watson Advertising’s AI capabilities to deliver tone-appropriate messages to a target audience increased their campaign performance by 206%.

GumGum, a contextual intelligence platform, developed an artificial intelligence called Verity that relies on contextual data instead of the behavioral data that third-party cookies track. It helps advertisers target ads using keyword and contextual categorization. GumGum CEO Phil Schraeder says that Verity “considers images, text and metadata when scoring relevance and determining suitability, ensuring brand safety and campaign success.”

Artificial intelligence can help pave the way for advertisers to navigate through a cookie-less future and provide the most effective customized campaigns.

At the Right Place With the Right Message at the Right Time

With customized advertising, companies can personalize ads for target audiences by leveraging AI’s ability to process and detect patterns in real-time. This deep customer analytics helps marketers better understand just who it is they’re trying to appeal to.

Artificial intelligence not only offers precision targeting of advertisements, but can also self-adjust and optimize individual campaigns. By assessing websites for content and context, AI can analyze specific pages where ads show up, raising targeting accuracy rates and reducing the risk of ads appearing next to content that is negatively related to the ad. For example, there are plenty of websites focusing on diet plans, nutrition and healthy eating. Since the pages are full of food content, they’re also full of advertising deals for fast food chains and delivery services. AI context analysis can help prevent this irony.

Dun & Bradstreet, a commercial data analytics company, created D&B Buyer Intent which utilizes Natural Language Processing and billions of unique web engagements to identify in-market buyers. Marketers using Buyer Intent have found an increase in ROI, with their email open rates and click-through rates going up by 37% and 22% respectively, as well as a 13% increase in conversions.

Marketing and sales teams who want a competitive edge can benefit from AI’s audience targeting capabilities. By predicting the best ads to run in the best places and adjusting in real-time, advertising campaigns can become more engaging and attractive to customers who appreciate personalization.

Codazen Solutions: Advertising and AI

Artificial intelligence is changing the advertising world. It’s helping companies optimize their campaigns to reduce ad spend while making those ads more relevant to individual audiences. With more personalized and effective ads, not only will marketers get better results for each ad dollar spent, but because the AI is analyzing trillions of data points to predict human needs, customers will also be able to get ads for products they would actually want.

The more artificial intelligence advances, the greater a role it will play in the advertising industry. Codazen’s data scientists have the skills necessary to help accelerate a brand’s digital transformation by maximizing the benefits of AI .

According to Michael Blum, one of our data scientists:

Finding the right advertisement to show someone is not an easy task, as it’s difficult to capture someone’s interest when they’re likely focused on something else. There are a ton of factors to consider when launching an ad campaign, which can be overwhelming for people to handle on their own. Personalized ads are always better at getting my own interest, and AI is the most effective way forward to handle those types of campaigns.