How AI is Changing Advertising
One of the most promising developments in advertising today is the emergence of Artificial Intelligence (AI), which is gradually moving from the confines of Silicon Valley into the broader startup and business world. And how AI is changing advertising is what has made this transfer smooth and successful.
In today’s digital world having a great product is not enough. One has to promote it widely, which takes money and manpower. Using advanced artificial intelligence (AI), marketers can automate their ad-promoting tasks to eliminate the manual processes that take up more time and cost them more money. They can now use AI for online advertising that performs exactly like human beings.
Table of contents
How does Artificial Intelligence work?
Artificial Intelligence is the use of technology to create intelligent machines that think, work, and react like humans. The primary aim of Artificial Intelligence is to create expert systems that have the ability to analyze their environment and take action accordingly, with minimal human intervention.
The best way to understand how Artificial Intelligence works is to look at how humans learn and process information. We are able to understand our surroundings, make decisions and learn from our experiences by observing the world around us. AI uses various algorithms, which are sets of instructions designed for solving problems in specific situations. These algorithms help machines to see the world around them and make decisions based on what they see.
AI is built on five basic principles:
1 – Robotics Process Automation (RPA)
2 – Natural Language Processing (NLP)
3 – Machine Learning (ML)
4 – Deep Learning (DL)
5 – Cognitive Computing
The basic components of artificial intelligence include:
-Algorithms that determine what information will be useful in making decisions
-A repository where data will be stored, such as a database or spreadsheet
-A way for humans to interact with the system, such as through an app or website
How AI is being used in industries other than Advertising?
When you think of industries that rely on artificial intelligence, what comes to mind? If you’re like most people, you probably think of advertising or marketing especially when this article is also about the same. But did you know that AI is used in other industries too?
In fact, AI is being used to help make decisions in the following fields:
-Automotive (e.g., driverless cars)
-Manufacturing (e.g., predictive maintenance for machines)
-Healthcare (e.g., assisting with medical diagnosis)
-Agriculture (e.g., using remote sensors to monitor crops)
-Retail (e.g., providing personalized recommendations from online retailers)
-Business services (e.g., accounting and bookkeeping; customer service; HR)
Why AI in Advertising?
AI can help you target your ads more effectively. There are many different ways that AI can be used to target your ads more effectively, but one of the most popular is by using it to figure out what kind of content will be most interesting to each user based on their interests or browsing habits.
AI can also help you optimize your ad spend by making sure that you’re reaching people who are likely to buy from you. One example of this is how some companies use AI to predict when someone is going to make a purchase so they can adjust their pricing accordingly (i.e., if they know someone will buy something within three days, they’ll raise prices).
AI is being used by advertisers as well as marketers in order to analyze customer data and develop insights into their behavior patterns for better targeting strategies with less waste. This type of insight could lead us towards new types of products that people wouldn’t have known about otherwise – which means more money spent.
AI will change the way we think about physical advertising
If you think about the advertising of the past, it was literally a billboard that sat in one place and tried to grab your attention. It didn’t care who you were or what you were interested in. It just shouted at you from its perch on the side of the highway, hoping that it would stick in your mind.
Today, advertisers can rely on machine learning and artificial intelligence to make advertising more personal. For example, if you’re walking down the street, an intelligent system can recognize you as an individual and present you with ads based on your preferences.
The advent of the internet has allowed us to reach consumers in ways that were never possible before—but it’s also opened the floodgates for competition. How does a brand cut through the noise and make itself stand out?
The answer isn’t necessarily to advertise more. It’s to advertise smarter.
Today, we’re not just in the business of creating ads—we’re in the business of creating experiences.
And with AI, we can make those experiences even more immersive, engaging, and accessible to our audiences than ever before.
With AI, we can analyze audience data to learn what kind of products they like and how they behave as consumers. Then we can build custom campaigns that deliver ads directly to them—even when they’re in the middle of a whole different experience.
AI is improving consumer decision making
If you ask how AI is changing advertising in real-time scenarios, the answer is by improving customer decision-making. Let’s take a common example. At any moment, each of us is flooded with information and bombarded with offers. We visit a website, and we get instant, personalized offers, based on what we know about ourselves.
A marketer knows which sites we visit, and they understand what our interests are. So, our interests are forming the basis for the offers we see. And these offers are specific and targeted, based on that understanding.
So, this targeted, personalized marketing is what A.I. is about.
It’s also what Amazon is trying to do. Amazon wants to market to you based on the assumption that you, as a consumer, are already trying to decide what to buy.
- Amazon is a “you” company.
- They know you, and they understand what you want.
- A.I. is enabling Amazon to understand you better and to target its offers to you.
- A.I. is enabling Amazon to build what it calls the “Amazon Customer Graph.”
- The Customer Graph is a database of information about Amazon buyers, and information about buying patterns.
- The database is updated daily, from Amazon’s sales records.
- It includes information about which products you buy, and about how long they take to arrive.
- It includes which products you buy together, and who you buy them as gifts for.
- It includes which products you buy together, and how often you buy them.
AI is driving efficiency in marketing
The reason AI looks the way it does in marketing is that
- marketing is, by its very nature, about efficiency,
- AI is good at optimization.
Marketing is by definition about selling stuff. And selling stuff requires figuring out who to sell it to, when, and for how much; and if you have a lot of products, figuring out which to sell to and when and for how much is a very big challenge.
You use AI to help decide whom to sell to, when, and for how much. It can help you figure out which of your existing customers might be willing to buy more.
It can do all of those things faster and better than humans can. This is how AI is changing advertising and marketing.
But AI is only part of marketing. You have to persuade people to buy your stuff. And AI can’t do that. AI is just doing your work for you. But you still have to do the persuading. And persuading is
- hard
- takes time.
This is why marketing has always been about efficiency. The more efficiently you sell, the more time you can spend on selling. The faster you persuade, the more time you can spend on persuading.
Marketing and AI don’t have to be mutually exclusive. In fact, AI is getting marketing more efficient,
AI enables deeper brand engagement
AI will eventually do to our ads for products what other technologies have done for search ads and news articles: make them more targeted, measure their impact in real-time, and fine-tune their performance.
But how AI is changing advertising will be more than just about ads. It will enable brands to engage more deeply with consumers. AI will enable brands to imagine themselves, and their customers, like characters in a story.
A brand story is a narrative that explains how a brand meets customers’ needs: what it does, why it matters, and how it delivers value. For example, the Nike brand story tells how the company sees itself as a force for good in the world. And Nike’s brand story also describes how the company uses its products to engage its customers in that story. Nike’s brand story isn’t just about shoes and apparel; it is about the identity of its customers.
Today’s advertising copy tends to tell consumers what they should do, rather than help them imagine themselves. But AI for advertising can enable brands to bring consumers into their stories and show them how they can be part of the story.
AI for advertising will not only enable brands like Nike to engage more deeply with their customers. It will enable consumers to do the same.
AI is changing Advertising right now
Marketing has always been about getting into the minds of consumers. AI can help us do that in new ways. For example, imagine you’re a real estate agent. You know that people who are ready to buy a home are thinking about things like finding good schools or saving money on their monthly energy bills. But what if you could actually know what they’re thinking?
Thanks to AI, marketers can now learn more than ever before about what customers are searching for online—even sifting through voice-recorded questions like “What’s the best school in town?” or “How much will my mortgage payment be?” This kind of detailed information allows you to craft targeted marketing campaigns that speak directly to your customers’ interests and concerns. You can also use AI to analyze your own data and predict when certain types of customers are most likely to be interested in purchasing from you, so you can serve them ads at exactly the right time for maximum effectiveness.
The following are the major ways how AI is changing advertising right at this moment:
- AI is changing advertising by helping advertisers decide what to advertise. They can find out what kind of people are looking for what, and target them. It’s making it so advertisers don’t have to waste money by advertising to people who can’t or won’t buy.
- AI is changing advertising by allowing advertisers to measure results. They can see the effect of ad placement on the number of people who bought something.
- AI is making it possible for advertisers to change their minds, and show them different ads based on the kind of people they are, and the products they are interested in.
- AI is making it possible for advertisers to send the right message to the right individual, at the right time, in the right place.
- AI is making it possible for advertisers to create and manage advertising campaigns at scale: they can target millions of people at once.
- AI is making it possible to do things like automatically generate content (copy, images, videos, and so on) based on the content of videos or web pages that people visit.
- AI is making it possible for advertisers to run ad campaigns on Facebook, Instagram, Twitter, and other social networks, as well as search and display advertising.
Summary
After showcasing how AI is changing advertising, we can now safely assume that AI is here to revolutionize advertising. And the sooner you get on the bandwagon, the better it would be for you, and your business. It has the potential to help you grow by leaps and bounds if you simply employ AI technology in advertising.
