How AI Is Used in Advertising Today

How is artificial intelligence actually used in advertising?

All digital advertising exchanges and platforms use AI to regulate buying and selling transactions in real-time. This includes programmatic exchanges, third party networks and advertising on platforms like Facebook, Instagram and Snapchat.

The best part about AI is that it works behind the scenes and decides how your ad spends get used, who views your ads & the effectiveness of your campaigns. For example in Facebook advertising, especially in ad frequency & relevant scores. This data is used by Facebook’s algorithms, without human involvement to decide the spends and how the ads are displayed. 

Let’s look at some research on conventional advertising which states that optimal ad frequency is at least three exposures in a brand purchase cycle. Additionally, you need to target the audience with the same ad multiple times to get maximum impact, ironically this can negatively impact your campaign on Facebook.

This is due to the fact that Facebook’s algorithms are calculating user’s feedback, and if your ad is exposed multiple times your relevancy goes down. So higher the frequency the lower the relevance, and conversely the higher the relevancy score, your ads are more likely to show to the TG than other ads, thereby translating into better performance at reduced costs.

Optimize ad spends and targeting: AI marketing tools are capable of optimizing ad spends & targeting. It can also process your ad spends and target data, analyse results. And learn what actions to take. It enables better performance across complex campaigns. Therefore the ability of AI to learn and improve without human involvement has given the brand a huge competitive advantage over human-powered ad programs.

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Performance and spend optimization

Performance optimization is one of the key use cases for AI marketing solutions. Machine learning algorithms are used by commercially available solutions to analyze how your ads perform across specific platforms, then offer recommendations on how to improve performance.

In some cases, these platforms may use AI to intelligently automate actions that you know you should be taking based on best practices, saving you significant time. In other cases, they may highlight performance issues you didn’t even know you had.

In the most advanced cases, we know of at least one commercially available tool that automatically manages ad performance and spend optimization, making decisions entirely on its own about how best to reach your advertising KPIs.

In another case, there exists at least one platform that allocates ad dollars automatically across all channels and audiences, so human beings can focus on higher-value strategic tasks, rather than manual guesswork about what works and what doesn’t.

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Ad creation and management: AI decides how your ads perform and boost your ad performance. Also, platforms with ad components, like Facebook use AI marketing that enables the creation of ads and variations faster than manual labour, utilizing content that’s uploaded already. For eg.  Phrasee an AI marketing tool jots down Facebook and Insta ads, which are designed to convert into clicks based on what works in the past. This tool improves on its own and learns from each new ad and learns from each new ad which language causes better results. 

AI also exists in third-party tools, which use smart algorithms to write ad copy for you. These systems use natural language processing (NLP) and natural language generation (NLG), two AI-powered technologies, to write ad copy that perform.

Therefore as an advertiser if your dependent on paid ads, AI comes to the rescue and ensures revenue increase and cost reduction.