The Future of Digital Advertising: AI & Advertising

ADITYA CHAKURKAR | June 24, 2021

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The world of digital advertising is witnessing a great change, all thanks to Artificial Intelligence (AI).

As AI keeps on advancing, we will see more and more improvements in digital advertising strategies for the companies to get profitable customer insights.

The automobile giant, Lexus, is the first company to release an AI-scripted advertisement. According to the report from Variety, IBM Watson was used by Lexus to analyse car and luxury brand campaigns that have received the Cannes Lions award in the category of creativity. However, it was not the only motive of IBM Watson. A wide range of other external information was also analysed with the help of it.

This turned out to be a great move as Watson was successful in identifying dataset elements that would relate to customers on emotional levels.

What was behind this achievement? Of course, AI.

But there was even a bigger message — AI is the future of advertising.

Today, there are multiple commercially available platforms that can generate advertisements without the involvement of humans. But, AI is not just about creating ads. It has the power to transform every single possible thing in the advertising industry in 2021 and beyond, be it ad buying or even audience targeting.

Don't be surprised to read every content throughout your day that is written by AI in the coming years. Luckily for writers like me, our industry is not there yet.

As we have just stepped into a whole new decade, it’s a good moment to think about the future of advertising where AI will play a vital role. So without further ado, let’s get into it!

The Future Of Advertising Has Already Begun

Just like any other marketers or businesses, we always try to predict or guess what the future of advertising holds for us. Yes, there certainly are some known things and some unknown ones. However, we still can discuss how it can be considering all the potential changes and variables. The major reason behind this is, the future of advertising has already begun a few years back.

How?

Well, most of the futuristic trends of the advertising world have already kicked off. Especially those trends that are going to be the hot buzz in the coming decade. But here lies one important question, which of these trends will impact the future of advertising the most?

And, what does AI have to do with this? Well…if you closely look at the current advertising trends, AI-powered sophisticated delivery systems are behind most online ads. Such systems are capable of placing ads in front of millions of internet users at the same time. The best thing — the coordination between the ads and the internet users occurs in real-time. And, it is ridiculously automatic.

The theoretical term for this kind of advertising is programmatic advertising. With this tech, artificial intelligence is used to profile visitors to apps or websites. Using this information, the targets are fixed and then ads are delivered. This becomes possible because of a modern ad supply chain that involves a complex network of services and platforms that have a different role to play at each stage.

Nowadays, the ad industry is being dominated by this type of AI-powered programmatic advertising. If we look at the predictions forwarded by eMarketer, more than 86 per cent of the display ads in the United States will be in front of the people because of automated channels. In fact, programmatic advertising is used in every 8 out of 10 mobile display ads.

Furthermore, we all see recommended products on Google and Facebook, don't we? How are these ads powered? Yes, you guessed it right, that’s AI. The stats are even more surprising — these firms captured around 90% of the advertising business back in 2017.

AI has made it extremely simple for brands to advertise online at scale. And, this is just the beginning. AI goes much further than just scaling when it comes to the future of advertising.

The current cut-throat competition has made it difficult for brands to create and deliver more relevant, more personalised, and more contextual ads to specific customer preferences. As a result, AI is the only way to fulfil this need. And ultimately, this fact holds a lot of implications for the future of advertising.

How AI Can Improve The Digital Advertising Trends

It is human psychology to personalize messages in face-to-face or one-on-one contexts. This happens with the people we already know. For example, we communicate with a family member, a friend, or a coworker keeping their possible response in mind. We know them and eventually have an idea about their preferences, desires, and behaviours.

But when it is about tailoring and personalizing messages at scale, there is a need for contextual data on thousands of consumers. In such a case, we need to have the customer information so that we can analyse it and then develop the right communication of each of them.

Humans do not have the required intellectual bandwidth, resources, and time for this enormous task. But thankfully, AI has that all. No wonder that more and more businesses are counting on AI for ad creation at scale.

Even though this is just the beginning of the AI era, it has already started impacting many advertisers out there.

For instance, AI can overrule all the advertising decisions made by your corporate team even if they have spent a significant amount of time and money to create them. To know this better, suppose you have created an ad on Facebook. The algorithm powered by AI analyses your ad and determines its relevance score. The delivery of your ad depends on the relevance score and it decides how effectively your ad is displayed in front of more and more customers. if your ad is less relevant to user needs or they don't just like your ad, the relevance score will be less.

A machine is responsible for deciding the relevance score of your ad and it has nothing to do with any creative and strategic decisions your team has made.

What does this mean?

Your business may not have to depend solely on humans to develop creative and strategic advertising decisions. You can imagine how AI can reduce the time and costs of advertising by effectively advertising on social media. In essence, it reduces your advertising budget to nearly half with effective email advertising and mobile advertising strategies.

To summarise this all,  AI is going to change the entire advertising industry including all the elements in advertising processes. It is about to bring infinite opportunities for businesses in terms of precise analytics, content creation, semantic targeting, user experience improvement, and much much more.


Conclusion

As advertisers want to optimize huge amounts of data to create better ad campaigns and drive more impact, the popularity of Artificial Intelligence continues to increase. Before AI, businesses struggled to measure the effectiveness of their ad campaigns and determine where to allocate the budget.

AI-powered advertising affects not only the media spend but also creativity, analytics, and planning. Therefore, the future of advertising with AI is inevitable to target the right audience, offer more personalised experiences, make better decisions faster, and ultimately improve the returns of your investment.

The future of advertising will show us how the automation mechanism can dominate the marketing and sales domains, and help companies to save more resources while driving more value to their consumers in the long run.


FAQs

How Is AI Used in Advertising?

Currently, there are a few main use cases of AI in advertising. Marketers and businesses are deploying AI-powered systems across channels and platforms. They include the following:

Budget optimization and targeting
● Ad creation
● Ad management
● Ad platforms

Programmatic advertisements use AI and Machine Learning (ML) to regulate both sales and purchase using real-time factors. It includes almost all the ad exchange, party networks, and even platforms such as Instagram, Facebook, and Snapchat.

What Role Will Artificial Intelligence Play in The Advertising World?

AI is all about developing intelligent machines that can solve questions. As businesses continue to add newer customer touchpoints, the amount of data they are collecting from their consumers is going to be unimaginably huge in the future. Managing this amount of data is not humanly possible. And that’s where AI comes into play.

How Does AI Affect Marketing?

AI is certainly reshaping customer-facing services for businesses, advertisers, and marketers. It does so by improving efficiency and optimizing user experience. By reducing the resources, AI is eventually causing improved ROI and affecting businesses in terms of every aspect such as ad creations, ad management, advertising budgets, planning, implementations, and whatnot.

Spotlight

Ignify

Ignify is a provider of eCommerce, Microsoft Dynamics ERP, Microsoft Dynamics CRM, Microsoft Dynamics Point of Sale, and Order Entry solutions to the mid-market and enterprise business segments. Ignify is award winner/finalist of the worldwide Microsoft Partner of the Year for five years, including 2014, 2013, 2012, 2011 and 2010, and has has been ranked as the fastest growing company for 7 years in a row by Deloitte and Inc Magazine from 2007 to 2013.

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