Wendy Gonzalez is the CEO of Sama, the provider of accurate data for ambitious AI.
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Once associated with big New York City offices, patriarchal workplace culture and multi-million dollar budgets, the advertising industry has evolved considerably in the past century. Now diversified and modernized, remnants of the mid-century Madison Avenue advertising ecosystem are few and far between.
But what’s caused this shift? Industry leaders will be quick to tell you there’s at least one tool that’s been especially vital to this evolution: artificial intelligence (AI). By mixing fundamental marketing concepts from previous generations with state-of-the-art AI technology, today’s ad agencies and brands can harness machine learning to stay relevant.
From my experiences partnering with the companies powering change in the advertising and marketing industries, I’ve learned a lot about what’s shaping the future of brands' campaigns. Let’s take a look at machine learning’s role in this shift.
Personalization + Targeting
Historically, advertising executives relied on generalized demographic information from surveys and censuses to determine what ads would be most successful and where they should be placed. With improved technology, however, advertising teams have unlocked new levels of consumer insight that can target relevant ads directly to interested audiences.
Ad teams can now segment populations into targeted groups to create higher returns on investment. These groups are selected by machine learning algorithms that recognize patterns in consumer behavior and determine which messages resonate best with each individual. As a result, 14% of marketers are already using AI for customer segmentation today.
As AI utilization continues to grow, even in the midst of pandemic-era budget cuts, these shifts are quickly becoming an industry norm. And consumers are catching on, too. Today, 80% of people who consider themselves "frequent shoppers" say they only buy from brands that personalize their advertising experiences.
Jon Halvorson, VP of consumer experience at Mondelēz International, one of the world's largest snacks companies, recently shed light on the benefits of AI-powered personalization. To create deeper connections with customers and drive growth for their suite of brands, Halvorson and his team have prioritized personalization technology. In its hyper-targeted Oreo Eye on the Clock campaign, the company delivered dynamic, personalized message banner ads to audiences. A testament to the strategy's effectiveness, the campaign resulted in 40% more clicks when compared with standard display ads.
Machine learning now allows advertisers to be more creative and successful through its ability to segment and target specific audiences with relevant messages.
Ad Creation
Personalization, while incredibly effective, requires a considerable amount of resources. Oftentimes, it demands several ad iterations for the same campaign and can monopolize an advertising team's time. With ad-creation AI, however, that’s changing. Brands can now optimize their campaign language and deliver the right message, at the right time, to the right people, in their unique brand voice.
For instance, leveraging innovations from startup Phrasee, Facebook was able to drive new value around its email marketing strategy. The company built a messaging framework based on the ideal customer journey. The AI-powered campaign delivered a 275% ROI on ad spending, a 23% average click rate uplift and a 15% average open rate uplift.
Other solutions allow fashion-focused brands to use AI to create on-model advertising imagery. For example, through Vue.ai's product photo solution, the company harnesses machine learning to generate realistic model and product images, saving time and money on high-production photoshoots. According to the company’s website, so far, its ad-creation innovations have enabled its customers to increase engagement by 40% and have pushed conversion rates to 1.5x previous levels.
If you're short-staffed as we enter 2022, consider AI ad creation tools like autonomous message and image generation. These machine learning-powered resources can be highly customized to best fit your company and customers.
Campaign Planning Optimization
Estimating an ad campaign's success has long been a shot in the dark until now. Using AI technology, and its role in predictive analytics, advertising teams can have more insight into what they need to make effective decisions.
Predictive analytics is the process of making predictions on a campaign's future outcomes based on patterns found in historical data. To ensure effectiveness, the predictive process requires high-quality data and AI. Once successfully developed, advertising teams can use the analysis to find campaign and audience opportunities they otherwise may have missed. What’s more, the system allows brands to “test” the efficacy of campaigns before they distribute them.
Predictive methods have enabled brands to lift their average conversion rates by more than 22%. As a result, many advertisers already rely on this process when conceptualizing campaign concepts. Today, 91% of top marketers have reported that they are either fully committed to predictive marketing or are implementing predictive marketing strategies moving forward.
By using AI, brands can pinpoint which audiences are most likely to be converted by their campaigns. According to the Aberdeen Group, firms that invest in predictive analytics are almost twice as likely to segment their audiences and target their campaigns successfully. Not only does this improve ROI and campaign performance, but it also reduces risk and can save millions of dollars on your bottom line.
As more teams harness AI to create successful ad campaigns, it’s playing an increasingly essential role in paving the future of the industry. With improved personalization, ad-creation and predictive methods, one size fits all campaigns have become a thing of the past. To ensure they’re not left behind, brands can explore the opportunities AI and machine learning present toward creating successful and impactful advertising campaigns.
How has AI played a role in the construction of your advertising strategy for 2022?
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