Artificial Intelligence (AI) is a popular topic these days, with frequent discussions about it. Its widespread presence raises significant questions for advertisers, particularly regarding AI’s potential impact on the future of advertising.
Many advertisers are already utilizing AI technologies for personalization and automation. In this blog, we explore how AI is transforming the advertising sector and what to expect in the near future.
The Rise of AI in Advertising
We’re witnessing a remarkable surge of AI in the advertising sector, as more companies invest in this concept. The third quarter of 2023 saw the biggest spike in investment in a long time, with nearly $7 million spent on AI in advertising. Compared to the third quarter of 2022, this represents a 60% increase in spending!
Why are advertisers investing in artificial intelligence? Mainly because it enables overcoming many challenges within the sector. AI notably saves time, reduces errors, and optimizes advertising strategies. As more companies successfully use AI in advertising, its importance in the entire sector increases. We anticipate an even greater increase in AI use in the coming years.
Personalization through Artificial Intelligence
When analyzing AI applications in advertising, personalization is a top priority. In the current context, the importance of personalized advertising is evident, with 90% of major advertisers stating that personalization “significantly contributes to the profitability of the business.”
Getting clicks on ads is challenging unless they resonate with advertisers’ specific target audience. To achieve this, personalized content that captures the user’s attention and aligns with their interests is necessary. AI algorithms now enable companies to analyze user data more easily and deliver targeted content. They take into account all data sources and instantly determine which ads should be displayed to which users.
There are concrete examples of such actions, with the Calm app being an excellent case study. It relied on Amazon’s AWS Personalize AI technology, which took user data into account and helped them find the right content within the Calm app. This led to a 3.4% increase in daily app usage.
Automation Revolutionizing Advertising Operations
The era of manually handling advertising operations is over. AI is paving the way for automation, enabling advertisers to streamline the entire process. AI-driven automation enhances the efficiency of ad placement while promoting better ad targeting. Again, it uses a large amount of data to determine the best processes to automate, helping advertisers optimize their campaigns.
Automation not only saves valuable time but also effectively manages multiple campaigns simultaneously, avoiding the need for a large team. At ADvendio, we have worked with clients to successfully transition to an automated advertising process. One of the most notable successes is with AutoScout24, where we used automation to save time and seamlessly integrate different processes. This not only improved overall efficiency but also simplified managing advertising expenditures.
AI-Generated Content and Creativity
Alongside automation and personalization, AI is used for creating advertising content. This means display or video ads are instantly created by artificial intelligence. The advantage is faster content production, but it comes with certain ethical challenges – we’ll get back to that later.
Meta has already launched an initiative called AI Sandbox, allowing advertisers to use AI tools to create ad texts, provide backgrounds for images, or automatically crop an image. This initiative aims to save advertisers time while giving a more professional look.
This is expected to become a common practice across various channels in the near future. As generative AI gains popularity, using AI algorithms to generate content ideas is equally compelling. Essentially, this approach promises to foster greater creativity, allowing the creation of ads that truly stand out.
Predictive Analysis and Decision-Making
Predictive analysis in advertising strategies enables anticipating trends. Companies can identify user behavior patterns and reflect them in their advertising content. According to IBM, predictive AI can help people make better decisions and stay ahead of consumption trends in a competitive market.
Companies can improve their campaign planning by mitigating changes in user behavior through proactive AI use. Remarkably, this process is automated and requires no manual intervention. Drawing lessons from various data sets, AI effortlessly offers accurate forecasts, allowing businesses to have clear expectations based on existing data.
For a concrete example, just look at WNS. This company uses predictive AI to improve business outcomes. It examined different leads during an advertising campaign and determined which were worth pursuing. By predicting which leads were “hot,” it managed to increase the conversion rate by 38%. it support services
Challenges and Ethical Considerations of Artificial Intelligence
Every time we talk about AI, we must acknowledge the challenges and ethical considerations. In the field of advertising, the main concerns are:
Data Privacy
Algorithmic Bias
Transparency
Data privacy and transparency both have ethical connotations. AI revolves around data – so advertisers must ensure they adhere to good data privacy practices to get what they need. At the same time, everything must be transparent, as some argue that AI-generated content is unethical. Indeed, companies try to sell something to a user that is not technically real. In the future