If you use the Internet every once in a while, you must have heard about machine learning and artificial intelligence (AI). The topic has been controversial for years — even the greatest of minds of our time cannot agree on it. Remember the discussion between Elon Must and Mark Zuckerberg? Here’s a quick recap.
What the two titans of modern-day technology couldn’t agree on was the superintelligence powered by machine learning. They argued about robots that may potentially outperform human intellect and then find us, people, redundant. However, even if such threat arises, it won’t happen in the near future. The human-like robots of today are actually very sweet.
AI is not only about robots. This technology is already used across industries from virtual assistants and self-driving cars to banking and yes, advertising. Since we are all here for the latter, let’s take a closer look at what AI advertising is, what artificial intelligence ads are, how the largest ad platforms use them and what’s in it for eCommerce store owners and digital marketers.
How do Advertising Algorithms work?
The working principle behind the targeted advertising algorithms is pretty straightforward. It’s all about the right match based on rich data. Ad platforms take the information about the product and targeted audiences on one hand, and about the people that are viewing web content on the other hand. The ad is shown if there’s a match of interests, buying intent, demographics, etc.
However, there are many advertisers on ad platforms, and often they compete for the same users. To reach their potential customer, the advertisers enter an auction. With ad auctions, it’s not only the bid size that determines the winner.
Here are some of the factors that determine who wins the ad auction:
- Budget: the higher your budget is, the more chances your ad has to be shown
- Relevance: the most relevant ad will be shown to a person
- Interactions: it matters how people interact with the ad, e.g. tap on it, share it, hide it, report it, etc.
- Compliance with the platform’s rules: if there is even a potential breach of the ad platform’s rules (e.g. Facebook Advertising Policies), the chances to win the auction decrease significantly.
How is AI used in advertising?
First, let’s see what artificial intelligence and machine learning mean.
Artificial intelligence (AI) is a broad concept that describes the machine’s ability to perform tasks and solve problems creatively — just as humans do. It is also about designing machines that can think, reason, and behave like people.
Machine learning (ML) is a way to apply AI to solve problems. Its main principle is that once a machine accesses data, it can automatically learn how to find the solution without being programmed for each specific task.
That’s all well and good, but what does it have to do with advertisement? Artificial intelligence and machine learning process complex information in large volumes to come up with smart AI-based advertising solutions. Ad platforms and advertisers adopted this technology to:
- Optimize the process of ad delivery
- Take the workload off advertisers
- Minimize chances of human error
- Find the best-performing ad visuals and copy.
It may seem that AI is the new kid on the advertising block. To be fair, it became a buzzword only a couple of years ago. However, AI made its way to the world of marketing in 2014 when programmatic advertising — an automated process of buying ads — became a thing, quite a big thing, actually.
This technology enabled brands to automatically buy ad slots (spaces where ads are displayed) from websites online. Ad delivery to relevant audiences became faster, more efficient, and cheaper since all the manual labor was removed from the ad buying equation.
Benefits of using AI in Advertising Ad Automation
Optimizing Ad Spend with AI
ML helps businesses predict their revenues and provide tips on optimizing the campaigns. This is possible due to algorithms of machine learning to track how people respond to your ads and the ads of your competitors. For example, there is a misconception that only ads with higher bids get delivered. In fact, very often the ads with lower bids win the auction if the algorithms see that an ad is more relevant to the person.
This offers equal opportunities for all players on the market. Megabrands with megabudgets and a small online store have the same chances of showing ads.As you have already seen above, Facebook and Google ad platforms offer truly great AI capabilities such as AI chatbots for frequent response to engage their users. However, it does take some time and effort to explore these opportunities and apply them in your day-to-day marketing practices. The good news is that there are solutions that help businesses put AI to work in a matter of clicks.
The reason artificial intelligence helps boost ROI lies in the fact that AI makes advertising data-driven. Here’s why artificial intelligence impacts your ROI:
- Targeting people that have high purchase intent with highly personalized ads including people similar to your clients and/or website visitors
- Processing the data on the previous performance together with the markets situations to give you a better understanding of which campaigns and audiences work best for your goals
- Cross-selling and upselling the products to people based on their purchase history by tracking people’s activity on your website.
Artificial Intelligence for Ad Creation
AI can also help you create and adjust content. Different ad solutions find their own way to use machine learning for this purpose. Some provide tools for analyzing the potential performance of ad creatives and ad data such as ChartExpo. Others take marketing further than ad delivery and help optimize email marketing content as well.
However, there may be a risk of relying too heavily on AI and publish content without double-checking it. This may cause some awkward situations where your text doesn’t make much sense. Even though machine learning is a powerful tool, it still has to go a long way before it can substitute people. When you do use AI for content creation, make sure that your copy meets your goals and is easy to understand.
Leading digital marketing agencies such as X3 Digital have begun to respond to the rapid advancements in Ai by leveraging ad technology that tracks the user’s full journey across multiple ad platforms. By leveraging marketing attribution that utilizes cross-device Universal IDs, ad specialists are better equipped to properly attribute all touchpoints and optimize conversion paths to improve CPA and ROI.
Targeting the perfect audiences
To make targeting as precise as possible, Facebook’s artificial intelligence advertising algorithms take into account not only what a user does on Facebook, but also how they interact with the business off the social platform. For example, ML tracks person behavior in the web store: if and when they visited the site, which products they viewed, if they added anything to the cart, etc.
Based on this information, advertisers use Retargeting to motivate the website visitors to make the purchase. To be able to track this information for Retargeting, businesses owners need to verify their domain on Facebook and install Pixel, a piece of code that helps track the efficiency of Facebook intelligent ads and how people interact with the content on your website.
Artificial intelligence and machine learning are nowhere near threatening digital business. On the contrary, they are making people’s lives a lot easier. Digital advertising is one of the things that AI makes more effective. That is why Facebook and Google have invested so much money and effort into powering their ad platforms with machine learning technology.
Starting using AI in digital advertising was totally worth it. Now advertisers can run highly relevant ads to grow ROAS and sales without constantly tracking the ad performance and fine-tuning the settings of their campaigns every day. Ad solutions outside of Facebook and Google took this technology and offered even more effortless automation that enables businesses owners and marketing managers to spend minutes a day — or less — on setting up and optimizing ads.
It may be difficult to wrap your head around AI in advertising and how to make sure your ads benefit from it. The good news is that you’re not alone in it. Adwisely helps you ensure that machine learning algorithms by Facebook and Google drive the best results for your campaigns.