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How Is AI Changing Advertising

has penetrated our lives, and how could it omit the advertising industry? Thus, thinking and understanding how AI is changing advertising has become critical for businesses.

Marketers and advertisers have always struggled to find the perfect target audience to improve engagement and sales, but AI has solved the issue massively. AI allows advertisers to target audiences better by analyzing large volumes of data. Now, they can recognize the buyer’s behavior and preferences more effectively. This information will enable advertisers to create customized content that attracts the right audience without spending a humongous budget.

AI-generated advertisements are so well-suited to the customers that you might scratch your head wondering, “Where was it all along?”

This article has everything you need to know about the future of AI in advertising, including how it works and how it can benefit you.

AI in Advertising

Jeff Bezos once said, “Basically, there’s no institution in the world that cannot be improved with machine learning.”

And AI is proving it true with its ability to make smarter, automated decisions.

While humans can create relatable, interesting ads to engage potential buyers, we are not the best at analyzing heaps of data. However, AI performs this task exceptionally. Artificial intelligence can dig into years-old data to understand the target customer’s patterns over time. After AI analyzes the data, you can optimize and modify it to meet your needs. AI has just become popular, but it has been here for some time.

Use of AI in Advertising

When contemplating the benefits and lacking in artificial intelligence, understanding the right use of AI in advertising is of grave importance. Lexus released the first-ever ad with an AI-written script with the help of IBM Watson in 2018. Artificial intelligence studied and analyzed winning car advertisements from the past 15 years to find the perfect recipe for a winning ad.

Combining AI’s analytical abilities and the Oscar-winning director Kevin Macdonald’s expertise, Lexus produced an amazing 60-second piece leaving everyone in awe.

This is just one example from around five years back; now, machine learning can help the advertisement industry conquer so much more.

How Can AI Help Change the Future of Advertising

AI is helping advertisers find their ideal target audience, improve personalization, and offer real-time solutions to their problems.

A 2020 study by McKinsey Analytics mentions that 14% of advertisers use AI for customer segmentation and spotting the right audience.

Let’s tell you how AI is changing advertising today:

Identify Targets

You can surpass competitors by leveraging AI and machine learning to identify targets for your customized advertisement campaigns. AI is smart and is becoming smarter with every passing day. It can help you find the right set of target customers for your next artificial intelligence advertising campaign. Find your target audience by studying the consumers’ demographics, location, and behavior.

Using AI commands and prompts also helps you build a user persona and determine who to target, taking you to the next step: segmenting customers.

Create Customer Segments

If you have not thought about it yet, let us reveal that AI can be immensely helpful in helping you create customer segments. Artificial intelligence and machine learning uses the data shared by the customer (demographics and online shopping behavior) to help you create unique customer segments.

You can also identify customer segments with high conversion rates to build unique strategies that convert leads into sales. Using AI to create customer segments can be revolutionary in building campaigns that hit the right spot!

Design Personalized Campaigns

When thinking about how AI is changing advertising, we cannot miss its impact on custom ad creation. Altering consumer trends in the past has had advertisers and marketers consider the previous interests and preferences of the target audience. You can create killer social media and email marketing campaigns, leading to conversions. Personalizing advertisements allows consumers to believe you care about their well-being instead of selling your product.

British advertising tycoon David Ogilvy once said, “A good advertisement is one that sells the product without drawing attention to itself.” And that is what AI is helping advertisers achieve!

AI is better than anything to study data and extract the needed information. It can help brands understand consumers’ past interests, behaviors, and interactions, leading to more personalized advertisements. Consumers are more likely to purchase from brands with more natural and targeted advertisements.

A recent report by Stackla shows that 70% of consumers prefer brands that provide a personalized experience; the stats went up from 69% in 2019.

These personalized advertisements can help your potential customers connect to the brand on a deeper level, producing results for your campaigns.

Programmatic Advertising

Many programmatic platforms now use AI to manage buying, selling, and placement, which is why it has become critical to programmatic media buying. Using AI in advertising has been a breakthrough in managing tons of data across different digital platforms, allowing companies to handle it better. These machine learning systems can analyze and interpret data in milliseconds, allowing real-time buying and selling decisions.

So, artificial intelligence facilitates advertisers to reach their target audience more precisely in less time – what else do we need!

Image and Voice Search

The time is not far when AI will do everything for you, from searching through voice commands to taking doctor’s appointments and much more.

Statistics show that 50% of the US population uses voice search daily on search engines.

AI can help automate social media and search engine voice searches, saving time in understanding user preferences and behaviors. It lets you create ads through listening that resonate with your audience and increases conversions.

Why is AI the Future of Advertising?

Machine learning has made it incredibly easy and efficient for brands to produce advertisements that interest potential customers. It helps make better decisions, optimize performance, and experiment more.

The following benefits of using machine learning and artificial intelligence in advertising give you further insight into how AI is changing advertising:

Enhanced Efficacy

What’s better than telling someone to do something, knowing they will do just fine? Using AI!

Artificial intelligence not only takes commands and offers a solution but is also capable of helping automate tasks to improve efficacy in advertising. It uses past data to make automated decisions, including data analysis and campaign optimization. Thus, you can focus more on modifying the AI-generated content to make it perfect.

It enables you to take over the creative end of the process while AI deals with tedious tasks.

Performance Optimization

Advertisers largely rely on metrics to evaluate a particular campaign’s success and plan accordingly. Machine learning algorithms continuously scan your campaign data on different platforms to find the gaps and produce performance results. They may adjust ad placements and target the ideal customer base to increase conversions.

Performance optimization plays a major role in improving advertisement campaigns; AI continuously adapts, allowing advertisers to convey the right message to the audience through more effective ad campaigns.

Better Decision Making

Though humans are better at making more informed decisions based on their intellect and cognitive abilities, AI can immensely improve the quality of those decisions. The decisions based on wider data make it convenient for advertisers to improve campaigns. AI-powered predictive analysis assures the future of AI in advertising. It can help forecast trends, understand patterns, and make data-driven decisions.

Artificial intelligence can also allow you to target your audience quicker and smarter than before. For example, you can understand emerging trends faster and better through AI, helping you create campaigns that the users can relate to immediately. You can hit a six instantly if you know what’s coming next and how to use it to your benefit.

Fast Decisions allow Experimentation

Experimenting and testing are the most critical and financially-burdening parts of advertising. Yet you cannot find the right fit for your brand until you try different sets.

As AI helps you make smart decisions faster, it allows more space for experimentation and the chances of success. You can change your strategies more efficiently based on machine learning and artificial intelligence data and try something unique or more targeted.

This technology can be revolutionary in native advertising to create ad creatives faster and smarter.

Better ROI Measurement

When we wonder how AI is changing advertising, ROI management is one of the top applications, enabling advertisers to change the campaigns per need.

In fact, a report by HubSpot mentions 21% of marketers believe providing ROI for marketing campaigns was their biggest challenge.

Advertisers and marketers find measuring and tracking ROI challenging to calculate the campaign’s impact. With AI, you can improve ROI measurement by utilizing real-time engagement data, providing better insights into campaign effectiveness.

Risks and Challenges of AI in Advertising

While AI is the present and future of advertising, it comes with a few risks and challenges. Take care of the following to make the experience worry-less.

Data Breaches

When you access major chunks of data through AI, it has data breach potential, incurring damage to the data. If you do not secure the data properly, it might also invite cyberattacks.

Algo Training Issues

AI is undoubtedly smart, but you must train it to produce results suitable to your brand image and tone. You must use to-the-point yet in-depth prompts to ensure AI gets what you are looking for. In case of failure to train the algorithm properly, the company might face consequences of unfair, biased, and less optimal decisions.

Advertising Bias

As mentioned above, using AI in advertising can result in unconscious advertising bias that hurts the ROI. However, understanding the algo and training can help avoid advertising bias and help you create a better artificial intelligence advertising campaign.

Human Assistance Need

Though none can predict the future, AI today needs humans to operate and generate results. Artificial intelligence lacks subjective experience and cognitive abilities, stopping it from imitating how humans think. Ads created by AI also need human touches to make them more relatable and emotional for the audience.

Frauds

AI can give rise to different frauds related to advertising that can damage the market and harm the business’s reputation; fake impressions and clicks waste the money you spend on advertising. At the same time, it may also enable fake and deep fake ads, putting the brand’s reputation at stake. A thoroughly established technical department can detect and prevent these problems.

High Cost

Integrating AI in advertising will be a great help in the future, yet it is a heavy investment initially. Depending on your needs, a custom AI solution can cost you between $6,000 and $300,000. You may find more economical options, but the functionality and decision-making abilities will vary.

Ethical Concerns

AI uses data that users allow particular applications or software to access without directly taking their permission. Thus, many people believe getting data that helps companies target the right audience is an invasion of privacy. The extensive use of AI for data collection and targeting may receive massive backlash from consumers. Thus, it is important to understand the acceptable and unacceptable data when creating customized campaigns.

So, What is the Future of AI in Advertising?

AI is better capable of sorting, handling, and analyzing data to leverage it to produce more targeted and customized ads for the target audience. Moreover, it improves efficiency, performance optimization, better ROI measurement, and faster decision-making.

While we now know how AI is changing advertising, we must remember that it has limitations, requiring humans for commands and creativity. Artificial intelligence and machine learning may also lead to advertising bias, and huge amounts of unprotected data can invite cyberattacks. A team of adept professionals can help use AI to suit your needs the best. The future of AI in advertising is inevitable, but it is up to advertisers to use it ethically and safely.

FAQs

How AI has changed marketing?

AI has affected marketing as much as it is influencing advertisements. Marketers are using AI prompts and extensions for script and copywriting. They are using the data provided by artificial intelligence algorithms to create better marketing campaigns.

Will advertising be replaced by AI?

Machine learning and artificial intelligence are not as exceptional today to replace humans in advertising. Instead, advertisers can use AI to their advantage by using correct, specified prompts combined with human creativity and imagination.

How AI is shaping the future of marketing?

AI’s ability to predict emerging trends can help marketers and advertisers design more relevant campaigns before their competitors. AI may contribute to the future of marketing by allowing marketers to make more informed, quick decisions based on the data provided by artificial intelligence.

Need help understanding AI in advertising and how to minimize risks? Our AI experts at Kubico are just a message away.

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