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AI in Advertising - Role and Benefits

  • Mallika Rangaiah
  • Aug 27, 2021
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Capturing the attention of the masses had been easier back in the days when your product was an exclusive offer for the masses, with it not having that many competitors. In today’s world, your item is often just another drop in the ocean and the real challenge becomes the art of getting it to capture the attention of the target audience and more importantly to hold that attention, amidst the massive set of options handed to them on a silver platter. 


It’s indeed a herculean task for companies to get their message across to their prospective consumers and to entice them into purchasing their product. This is where the option of using technology as a solution for advertising can be mulled over and in many cases, is actually already being considered. 


What exactly do you think of when someone mentions advertising? Maybe an elite group of people consuming wine or popular celebrities located in posh areas offering healthcare or fitness products? Interestingly, we’ve now got AI all set to carry out the job of creating such concepts for us!


( Related blog - IoT in advertising )



AI in advertising


Launching themselves into the battlefield are AI solutions that aim at offering a hand in tackling the challenge of garnering the prospective customer’s attention. These solutions can detect potential customers via clustering and pattern matching, customize messages via AI powered hyper personalization and also determine the most suitable times and means for communicating via pattern identification. 


One excellent example is that of the Dixons Carphone’s strategy to compel shoppers to join the Black Friday sale. It was an AI software that helped the platform get their hands on the winning line “The time is now.” 


It is believed that the line worked since it didn’t have the obvious words “Black Friday” in it, which had all been mentioned by the platform’s human copywriters who attempted to produce the most convincing slogan. Ultimately it was technology that managed to produce something different from this standard line of thinking. It was technology that broke this chain of thought.


Interestingly, the first time an AI solution was used in an advertisement was in 2018. The popular car company, Lexus, had created an advertisement that was developed through an artificially intelligent system. The platform made use of the data generated in 15 years of worldwide award-winning advertisements. 


The AI agent had developed a 60-second film showcasing the tale of a car that comes to life and probes interesting questions regarding humanity and creativity and the relationship of these aspects with AI. 


You can check out the making of the Lexus advertisement below : 


How is AI changing advertising?


AI is all set to revolutionize the outlook of advertising with the promising perks and the edge it offers. We’ve mentioned a couple of ways through which organizations can make use of AI in advertising.


The image shows how AI is changing advertising - namely through personalization, ad creation, effective audience segmentation, enabling lucrative decisions that enhance ROI and better conversion

How AI is changing advertising?


  1. Personalization


In the case of advertising, personalization is all about taking up consumer insights or data to enhance the importance of an advertisement for its potential audience. These insights may be regarding demographic data, purchasing intents, interests as well as behavior patterns. 


For instance, there might be a possibility that younger target audiences are more attracted to to-the-point visual-focused advertisements as opposed to the older target audience who might prefer a more detailed and elaborate advertisement, having more focus on products and services. 


This would help advertising creatives to narrow down and zero in on preparing only one approach version that can be customized through AI algorithms and then offered to the suitable consumer segments. Tools like Persado which make use of natural language algorithms are used by advertisers for generating personalized wording for sales copy.


One lucrative personalized AI solution is conversational marketing. This approach can help out advertisers in maintaining personal connections with their consumers, in enhancing the relationship that they hold with their brand, and in creating an improved shopping experience.



  1. Ad Creation


Fascinatingly, AI is now also being leveraged for generating ad copies. Several social media and online advertising companies have begun introducing tools that can aid advertisers in generating a compelling message. Facebook and Instagram are two platforms in particular that have AI-powered tools helping their users in both creating ads and giving them variations. This helps in saving time for platforms and also in offering content that will offer an improved rate of response.  


Alongside online ad companies, many emerging platforms and startups are also extending their force on tools to help ad creatives churning out more superlative and specific ads. While some of the solutions stress maximizing ad content, others are fixated on boosting ad spend and zeroing in on channels. 


We’ve also got some platforms that are working towards fully automated advertising systems that can target markets, detect audiences, generate content, execute ad bidding and position the ads in an independent manner. 


AI is also being adopted for monitoring ad spending, tracking sales as well as consumer behavior. Platforms, like social media companies, are also leveraging the technology to assess the advertisements which are positioned on their network. 


( Related blog - Factors influencing consumer behavior )



  1. Effective audience segmentation


The use of machine learning allows advertisers to detect patterns in accordance with audience behavior and the compelling power of the message. This is done by making use of all the data machine learning has of a particular individual, like their online behavior and their preferences, for making a proper decision regarding the kind of content that a specific segment would prefer to see. 


An example of this is platforms like AgilOne which enable marketers to enhance the email and website communications, constantly switching their approach by observing user behavior. 


  1. AI aided advertisements convert better


By looking beyond past performance and trends, AI is capable of generating insights that ensure fruitful decision making and make sure that the budget isn’t invested into a non-profitable ad copy. 


This is done by heading further from the conventional A/B testing for undertaking data-based predictions regarding how the proposed message will draw the attention of the target audience. This enables advertisers to become more proactive in their approach towards creating ads and encourages them to aim at gaining more qualified leads and conversions. 


McDonald’s approached IBM Watson Advertising with the aim of generating visibility around its McCafe limited-time specialty coffee offering. The primary goal was boosting engagement and attracting consumers to buy items while also keeping track of the consumer’s in-store visits. To accomplish this goal, McDonald’s made use of compelling and impactful backgrounds to garner the attention of users. 


McDonald’s leveraged IBM Watson Advertising’s location data and its store locators to gain the following results:


  • ~5,000,000 impressions
  • 168% more efficient cost per visit than category benchmarks
  • .71% CTR for mobile branded backgrounds +25% versus the benchmark
  • 79% of exposed users visited McDonald’s restaurants within 3 days



  1. Enables lucrative decisions that enhance ROI


AI-enabled tools consume a massive amount of data with the purpose of predicting future trends and insights precisely. With AI being an effective tool that constantly upgrades itself and steadily adapts and learns, it helps creatives in taking better advertising decisions.


Although advertisers have since long strived to measure the success and outcome of their campaigns, analytics steps in as a savior to help platforms in deciding on what would prove to be fruitful and what might be ineffective. This will ensure that the advertisers remain alert while undertaking decisions that will effectively boost their campaigns. 


An excellent example is that of Spotify and Netflix. These platforms make use of AI and Machine learning algorithms to offer users the music and content which is in accordance with their preference. 


( Related blog - How Netflix maximises customer experience )


These algorithms help the platform to make impactful decisions regarding what content to offer based on the likes and dislikes of their audience. The more that consumers become accustomed to the high level of personalized recommendations offered by these two platforms, the more they prefer brands providing a similar experience. 



Benefits of using AI in advertising


AI can offer a competent edge to ad campaigns by facilitating enhanced user experiences and minimize human errors. The potential benefits are evident, and organizations are taking notice. Some obvious and not so obvious reasons for the perks of AI in advertising include:


Personalized experiences


We all prefer experiences personally tailor-made for us. As mentioned before, AI helps consumers in gaining a personalized experience which in turn offers better results. Be it through conversational marketing, or enhancing the proposed message for connecting better with the audience, the platform would benefit from enhanced brand loyalty and pertinent advertisements. 



Selecting suitable influencers


Influencer marketing is a strategy that is highly useful for brands on the lookout for cultivating further personal connections. Yet the real challenge lies in selecting suitable influencers. By leveraging AI, the right thought leaders can be scouted, a proper content strategy can be generated and engagement can be enhanced across platforms. 



Target suitable audiences


The biggest challenge that marketers generally face is ensuring that suitable people get targeted. AI can interpret varying data sources to pinpoint the chances of users undertaking a particular action, making campaigns more impactful and proactive. 


( Related blog - Hyper Personalization )


From developing look-alike audiences on the basis of past campaigns with the goal of targeting fresh contacts and developing the sales funnel to leveraging AI and location data to target individuals from nearby stores for enhancing foot traffic or driving personalized suggestions on the basis of the weather, AI can be adopted for a variety of purposes when it comes to attracting suitable audiences. 



Undertaking swift and improved decisions


Through suitable insight and data, marketers can make swift and improved decisions at a faster rate. This is integral to ensure that the advertisements remain relevant for the target audience. 


For instance, In the pandemic, the rising cases can make consumers less likely to enter stores. AI can step in as a solution here and ensure that swift decisions are made for customizing messaging and switching the focus of the campaign, if and when needed. 



Enhance ROI


The real struggle is investing money into advertising and facing a lack of expected outcomes. Advertisers constantly struggle with concluding the impact of their campaigns and the required steps to enhance their results. Making use of analytics can aid these platforms in determining the effective strategy and in turn enhancing ROI while reducing any generated waste.





Advertisements might seem like a nuisance when they interfere as we consume content but we can’t deny their power and the promising outcome they offer when presented in the best way, at the best time, and to the perfect audience.  


Although we may not have realized it yet, AI is definitely revamping the advertising world, easing its strategies and revolutionizing its approaches. From tweaking the approach used for delivering ads, enhancing ad relevance to monitoring the ad quality, AI has sunk its paws in every field, offering advertisers the scope of getting the maximum benefits for their ad spend.

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