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Sep 18, 2023

How AI is shaping digital advertising

Dayna Lang
Author Dayna Lang

Digital advertising has always grown and changed as technology evolves and with the continued development of artificial intelligence, digital advertising is seeing major shifts.

AI has been front and center in minds and headlines this year; with jumps in technology, the rise of platforms like ChatGPT, and debates surrounding legal and ethical implications, it’s no wonder that AI has captured the imaginations of so many.

After all, with so many use cases, AI has the potential to revolutionize a broad range of industries. 

According to a 2018 study from McKinsey, out of the 400 most advanced industry use cases for AI, marketing was shown to have the greatest potential value. In fact, AI was already being utilized across the world by marketing departments in order to improve their strategies, plan their advertisements, and even create content.

Since then, the number of departments using AI globally has only grown. 

A study conducted in 2021 by Semrush showed that marketing and sales departments are already prioritizing AI and machine learning, with departments having 40% greater success when doing so. 

Since this study was conducted, technology has only improved, making the use case for AI even stronger. The use of AI is also only slated to grow; the same Semrush study concluded that the AI market will reach $190.61 billion in market value by the year 2025. 

 

The State of AI in advertising

In modern advertising AI is most often used to assist with analytics, programmatic buying, and customer service tasks. The Harvard Business Review, also indicates that AI can also be used to enhance sales predictions.

Technology can now be used to answer questions like “how many potential customers will see my ad?” Given the most up to date data, AI has the potential to transform marketing campaigns into success stories. 

AI for targeting

One of the best current use cases for AI in marketing is to improve returns on investment. By using AI to collect and analyze data in order to better target potential customers, advertisements can be shown to the right audiences, the right number of times – reducing costs substantially.

In a 2021 study 48% of companies were already using AI to improve their targeting data and this number continues to grow year after year. 

AI for content marketing

AI can be applied to content marketing in a variety of ways. It can be used to collect data on the types of content an audience is interested in and the most effective routes of publishing and distributing that content.

Where the controversy of AI comes in, is when AI is used in the development and generation of content itself. 

According to Search Engine Journal, five of the best use-cases for AI in content marketing are Competitive research, Search and SEO discoverability, Content generation, Campaign optimization, and Marketing automation.

Keep in mind that while AI can, and is used to create copy and images that are impactful to audiences, there are both legal and ethical gray areas surrounding the generation of AI content. While your organization may have its own stance on these issues, your target customers may feel differently. 

AI for Customer Relationship Management (CRM)

A common use of AI is in Customer Relationship Management (CRM). Most customers have spoken to a chatbot on a website; tools like this drastically reduce time and money spent on customer service issues. AI can also be used to detect issues and reduce “churn” before a customer raises the issue – helping CRM teams to assist customer’s preemptively. 

AI is a fantastic tool for implementing self-service. ​​According to Zendesk, “if people can help themselves instead of talking to an agent, they probably will.” Having a self-service option can ease customer frustration and free up resources for other tasks. 

One thing to keep in mind here, is that buyers tend to want human interaction and while AI tools can be helpful, having a human representative is still essential. 

 

The controversy of AI

As mentioned previously, there is still a great deal of controversy surrounding AI. In part, this is due to lack of understanding in the general public as to what AI is and can do. On the other hand, there are still a lot of legal unknowns when it comes to AI, both in terms of data collection and content creation.

As AI technology grows, so do the number of ethical conversations happening around it. 

Some of the ethical issues raised by unesco include: 

  • A lack of transparency: How AI makes decisions is not always known.
  • A lack of AI neutrality: Since AI is made by humans, it carries human bias. 
  • A lack of data privacy: Surveillance and data gathering practices are not always known or consented to.

There are also blurred lines when it comes to the ownership of artwork and written content created by AI

The way forward

There are many current use-cases for AI, but these are some of the best ways that AI can be used in marketing.

Tedious jobs 

There are certain necessary jobs that are tedious, uninteresting, and repetitive. These kinds of jobs are perfect for AI. Jason White, the co-founder of Jiffy.ai, says that “there are certain “dirty jobs” and that these jobs “human beings don’t really like doing” are ideal case uses for AI because not only can the technology do these jobs well, but employees will breath a sigh of relief at not having to do them. 

Media optimization 

AI is ideal for optimizing media campaigns. In a test run by Good Apple, the marketing was able to double optimizations by using AI rather than manual production. This resulted in a 64% improvement in cost per acquisition. This kind of time saving frees up employees for creative work and strategy (the innately human components of marketing).

Campaign refinement 

AI can play a vital role in refining and optimizing advertising campaigns. Theorem, a B2B company, saw up to a 50% increase in the speed of its campaign executions as well as decreases in error rates. This kind of refinement leads to huge savings that can be reinvested in growth and engagement. 

 

To see more from illumin, be sure to follow us on Twitter and LinkedIn where we share interesting news and insights from the worlds of ad tech and advertising.

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