Artificial intelligence (AI) is rapidly becoming a larger part of our everyday lives. We have some obvious examples such as Siri, Cortana and Alexa, that we all know about. But there are also many applications that have embedded AI technologies that most people aren’t knowingly aware of, such as Google searches, pricing on Ride-hailing apps, fraud alerts from your bank and recommendations on the OTT platforms such as Netflix and Amazon Prime Video.
Innovations like these are not only impacting the day to day lives of consumers, but also have a major impact on business applications such as digital advertising. Ads are now much more targeted and personalized than ever, primarily due to the huge amount of data being leveraged in real-time. Every year, during the major e-commerce sale season, we see the major e-commerce players leveraging personalized ads to reach out to customers. By implementing AI within their digital advertising strategies, brands and online retailers can get the right products in front of the right consumers at the moment they are most likely to buy.
In order to understand why AI has had such a positive impact, it’s imperative to look at some of the fundamentals of this technology. AI enables quick learning and sophisticated pattern recognition. When used in digital advertising, AI produces hyper relevant ads that are much more influential on consumer decisions, ultimately leading to increased ROI.
Because an AI platform informs itself as it processes more data, such as online shopping behavior and even offline point-of-sale data, marketers no longer have to worry about having the right data, or if they’re using it to its full potential. AI provides a granular understanding of each user and is able to predict what the user wants next.
So, with AI ads, here are some factors to keep in mind:
Advertisers and Consumers both benefit from AI
When it comes to traditional ad technology, the focus is mostly on reach, conversion and customer acquisition costs rather than the consumer itself. In light of this, is it any wonder that ads can be ineffective?
AI provides the opportunity for marketers to get a deeper understanding of their consumer and serve relevant ads that consumers actually want to interact with. At the end of the day, not only is the consumer getting ads that actually interest them, but marketers are receiving the engagement that they are aiming for because of it.
AI is Only as Good as Your Data
AI has access to plethora of data. To make for this technology work, the appropriate partners and staff must be involved to get the most out of the data. Data scientists are necessary to sift out low quality data while also monitoring and adjusting models as needed, for the most accurate predictions possible.
AI ads are about context
While personalized ads offer products that are most likely to interest users, AI ads are about context. This is a critical distinction. The reason is that the data collected along the customer journey can be messy and ambiguous. Why did a person click a button or leave an app?
Data analytics may not be able to provide the answers to these questions, but AI can. The algorithms can find patterns that may be surprising or unintuitive — leading to insights that can move-the-needle with the ad spend.
Each year the tech industry continues to see the rise of new technologies that change the way businesses interact with their consumers. While some technologies disappear, many continue to be implemented across companies, both big and small. Although AI is in its early stages, it has already significantly changed the digital advertising industry. For those brands that are looking to stand out from their competition, it’s the right time to get serious about AI.