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The Impact of Artificial Intelligence in Advertising

Jun 24, 2019

Author: Mike Rowan, President, Founder @KPItarget

Artificial intelligence is quite the buzzword these days. However, when it comes to the practical application of some of these technologies, it may be a little bit unclear about the breadth of products and applications in which AI plays a role.

Many people, consumers and marketers alike, may struggle with the concept of AI and how and if it is relevant. However, many don’t necessarily realize how quickly artificial intelligence has grabbed a foothold within the marketplace, and how brands are utilizing it to impact the success of marketing and advertising teams.

Let’s review how artificial intelligence is impacting marketing and advertising by:

  • Targeting and evolving the right audiences
  • Optimizing ad spend and management
  • Using AI with image recognition
  • AI is now creating actual ads
  • Using AI and data points in programmatic advertising

But let’s take a quick stroll down memory lane first …

The “Old Way” of Running Campaigns

Historically, in order to start a campaign, you would do your audience research, come up with a compelling offer, create some amazing ads, and deploy your campaign according to the budget that you had allocated.

While you could report on the success of the campaign, there was quite a bit of manual analysis that took place to identify and attribute the highest performing ads, the best audiences, and opportunities for expansion and contraction of the overall initiative. You then may be able to identify sections of the country and times of day that worked best, so after quite a bit of time, money, and effort, you would eventually come up with a campaign that was fairly optimized and met your goals.

Enter a Massive Wave of Data

As time moved on, marketers began to have the ability to not only capture, but leverage  more and more user data. I remember attending a marketing conference where the speaker was boasting about the fact that they could now access up to 100 data points in which to target visitors. Ah, those were the simple days …

The simple fact is that the amount of consumer data readily available to marketers began to exponentially increase to the point where we realistically didn’t even have the capacity to process all of it in an integrated way.

As the years progressed, we could start to access data for almost every aspect of a person’s life through many of the consumer collection services like Experian, but could now also overlay other metrics such as their online behavior and website visit history, geo-location through mobile, and everything that naive consumers freely offered up via social media. (Hello Cambridge Analytica).

Any mere mortal just simply couldn’t process anything … but artificial intelligence was up to the task, and started to quickly inch its way into every marketer’s life. The emergence of AI started to process the data for us, and the recommendations that it enabled started to revolutionize the way that we did personalized marketing, leading up to how we utilize artificial intelligence in marketing today.

Targeting & Evolving the Right Audiences

For starters, one of the primary ways that AI has impacted the advertising and marketing world is by processing all available data, and having the ability to create the ideal audience for your product or service that you can use to target in a variety of different ways. We discussed the different kinds of data points above, but all of a sudden, we could start to parse and overlay data in ways that we just simply couldn’t do before.

It isn’t just the creation of the audience, it is how AI is able to continuously evolve the audience based on actual performance, and expanding it to other segments that may share the same purchasing behavior.

Provided that the campaign tracking is set up correctly, AI can quickly identify where the conversions are coming from, and seamlessly shift spend around to follow the audiences that are converting. In addition, you can automatically create similar audiences that share common attributes to your existing audiences which enables you to quickly scale these campaigns to reach more similar people that also have a great chance of converting.

We are probably oversimplifying the process, but this happens constantly and is refined and expanded and refined again and again and again … all based on the actions and performance that is being experienced within the campaign.

Optimizing Ad Spend and Management

This is probably one of the areas that were impacted first by machine learning and AI, but the management of advertising accounts has transformed and streamlined the way that campaigns are run today.

When digital advertising first started, you would literally have to select your audience and rely on piles of spreadsheets, data, and sheer will to continue to optimize your spend and audiences. Everything was adjusted manually and gaining insights into trends and cost saving opportunities was more of an art than a science.

These days, with AI and machine learning, you have a software platform that is doing a lot of the work for you, steering more money towards audiences that are more likely to convert, and finding the best places to get your message in front of these buyers.

You literally can have bids that are adjusted by the minute, can automatically boost your spend based on time of day, and even have the ability to offer different messages to different audiences that are experiencing external events such as weather. (Gotta bid up those umbrella keywords in Georgia when it’s raining!)

As time goes on, and there is more data from which to draw, these campaigns can get more and more intelligent, consistently improving results.

Using AI with Image Recognition

Here’s a relatively new concept. Did you know that there are now ways of targeting ads through image recognition software?

Yes, advertisers will start to be able to offer you ads directly correlated with the images that reside within an article, or page. The new versions of ads are displayed either on page or sometimes on top of the actual image and are providing advertisers to deliver hyper targeted messages and multimedia that offer a greater chance of getting conversions.

Imagine this. You are reading an article about nutrition for your pet. On top of the image of a dog, you then see a targeted advertisement for a new kind of organic pet food. Probably highly correlated?

To make this concept cooler, the advertiser doesn’t even have to target by keyword, website, or even theme for that matter. All they have to do is to instruct the AI bot to go out, find articles with pictures of dogs, and their ad will follow shortly thereafter.

The Future of Advertising and AI

These are only a few examples of how AI has evolved/improved the way that we advertise online, and it will obviously continue to innovate how we market. However, the impact to the marketing and advertising industry has been dramatic, and will accelerate as data becomes more robust, and additional mediums open up.

Marketing and advertising combined with AI should continue to be a positive development, not just from a cost savings/conversion boosting perspective, but also from providing personalization and relevancy to the consumer.

Some may be creeped out since it can already feel like you have a marketing bot stalking you, but if done responsibly it should provide you with the ability to learn about and purchase the products and/or services that are relevant, interesting, and pertinent to your daily life.  

If you’d like to chat about using artificial intelligence in your marketing, contact me at mike@kpitarget.com.