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Role of AI in Advertising for Improved Performance-Applications and Analysis

AI is expanding its horizons at a face pace into various industries including advertising, media, e-commerce etc. AI is being used in the advertising industry for purposes like Targeting, Personalization, Content Creation and Ad Optimization. Involvement of Artificial Intelligence in the Advertising domain has revolutionized the advertising industry to a great extent and has definitely changed the way Advertising sector works. AI in advertising in today’s times is used to perform all the tasks right from creating and ad copy, optimizing the ad budgets and in predicting the performance of an ad. AI in advertising helps you to understand your target audience, your advertising budget to reach your target audience, analyze consumer behavior, and to evaluate the Return on Investment (ROI) of your ad campaign.

Applications of AI in the Advertising Industry

Ad Platform

Programmatic advertising exchanges and ad tech platforms manage real-time purchase and selling by using Artificial Intelligence and Machine Learning. This includes almost every ad exchange, third-party network, and advertising solution available on Facebook, Instagram and Snapchat. AI works behind the scenes and dictates how much money is spent, who actually sees the campaigns, and the efficiency of the campaigns that are running on any platform. Facebook uses complex algorithms based on AI to calculate the amount of money that needs to be spent on advertising and the way the ads are shown on the platform. An ad on Facebook is based entirely on the relevancy and frequency score of the advertisement. The relation between the two on Facebook is totally different from the one you get to see on traditional advertising platforms. A traditional advertising platform works on the principle of ‘striking the target more frequently with the same campaign’ for better results, but a digital advertising platform like Facebook might show a declining relevancy score if an advertisement is viewed frequently by the users. So, AI helps in taking the user’s input into account and an advertisement is shown to the correct target audience with the relevant frequency. This improves the performance of an ad and also reduces the overall cost of advertising.

Optimize Budget and Targeting

AI can help the advertisers understand the ad spend and targeting data, and then they can determine which actions will help in improving the performance of the ads. McDonald’s has adopted advanced AI decision-making techniques to optimize its ad Targeting strategies. By analyzing real-time data on weather, time, popular menu items, and current restaurant traffic, McDonald’s AI system dynamically adapts the menu board presentation in advertisements, ensuring the most suitable menu options are precisely pushed to the target users.

Ad Creation and Management

AI not only determines how advertisements work, but it also helps the advertisers in creating ad campaigns that can deliver the desired results. Google and Facebook offer people AI that helps advertisers in creating different versions of a campaign at a very fast pace. These AI tools on digital platforms extract data and information from previously submitted materials and use it to create a new campaign much faster than any manual process. The ads created on Google Ads and Facebook are then optimized for conversion based on their past performance.

An Analysis of how AI is Transforming the Advertising Business?

More advertising content creation and higher marketing efficiency with lower production costs

Use of AI in advertising helps in creating content faster, draws more users’ attention, and increases effectiveness and conversion rate of the overall process of advertising. Targeted ads created for a selective audience help in lowering the costs and delivering improved performance and conversion rates over a period of time.

Greater advertising impact and information reach rate

Artificial Intelligence and Content Marketing technology can be used to create advertising content that is relevant to target audience, and this will make advertising technology more successful in the future. Internet giants like Amazon, Facebook and Yahoo use AI technologies to create personalized recommendation systems. This helps them in providing their consumers with personalized ad content that aligns with their interests and needs in a better way.

Better access to information and consuming experience for users

AI is used in advertising to enhance user experience with the help of innovative content in the form of games or competitions. Such kind of content creates interest among the users and increases the engagement rate of the advertisement. Users are more likely to click on such ads, and this increases the CTR and conversion rate of the ads.

Advertising as a domain has evolved with time and this transformation will be a continuous process, as the AI technology involved in transformation will also keep progressing with time. Advertising industry today is much better placed as AI is helping it to create more personalized and creative content that can cater to the target audience in a much better way. This will help in reduced cost and overall improvement in the performance and conversion of the ads.

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