The power of AI in advertising

Many marketers believe AI and machine learning will play a major role in shaping the direction of the industry. Graham Medcalf ponders its potential.

The rise of AI and machine learning (ML) presents a massive opportunity for advertising agencies to leapfrog ahead. One of the ways in which they can embrace it includes investing in expertise by building in-house AI/ML teams, and hiring data scientists, ML engineers and AI strategists to implement these technologies effectively. 

An alternative is to collaborate with specialised firms to leverage their expertise and avoid reinventing the wheel. One such firm is Attain, whose Growth Platforms Manager, Clint Gray, says: “We leverage AI from the start to the end of a campaign in so many ways – storyboarding, target market research, competitor analysis, offer creation, digital data interpretations, idea generation, script writing, thumbnails, CRO testing.”

Media agencies have also fully embraced the opportunities offered by AI. Agency leader and customer strategist at Together, Andy Bell, says: “Our business model was designed to embrace this opportunity from day one. We’ve invested extensively in data infrastructure, data engineering, data science and AI/ML engineering capability.” 

Although initially focusing this capability on the data-driven transformation of their core processes and media services, Together was always intending to enable the architecting and building of innovative, data-enabled solutions for their clients. The agency routinely undertakes AI/ML work spanning numerous use cases, including segmentation, propensity modelling and lifetime value prediction. Bell says: “It’s also worth noting that we have experienced consultants who can advise clients on how to deliver growth from the data-driven transformation and AI enablement of their own sales and marketing approaches.”

At the same time, agencies need to upskill current employees in AI/ML concepts and applications in marketing, such as shifting towards basing campaign strategies on insights gleaned from AI-powered data analysis, utilising AI to create highly targeted and personalised ad experiences for individual customers.

Exploring AI-powered tools for generating personalised ad copy, images and videos based on audience profiles, and offering clients data-driven marketing audits, competitor analysis and future trend predictions using AI tools is now all possible. Experimenting with AI for generating innovative ad formats, interactive experiences and personalised storytelling is the way of the future.

“We expect that the advent of Gen AI will accelerate transformation and automation of core media planning and content creation capabilities,” says Bell.

“Together is embracing this and actively experimenting with using AI to augment our human talent.” 

The agency’s strategists already make use of Gen AI tools, in addition to more traditional sources of insight, to support campaign strategy development for clients, and their content creators are using AI-enabled tools to test designs and efficiently produce the assets needed for personalisation at scale. 

“We expect more of the core media tasks will continue to be automated using AI,” says Bell. “Platforms like DV360 are already AI-enabled, and this trend is likely to continue.” 

By proactively embracing AI and ML, advertising agencies can turn themselves into data-driven powerhouses, offering unparalleled value to clients and shaping the future of marketing. The key is to start now, invest in the right resources and navigate the challenges thoughtfully.

As Steve Ballantyne of Brand IQ notes, some brand agencies focus on the generative AI images space, using platforms like DALL-E and Midjourney to create spectacular images for clients at a fraction of the cost of photography and in less time. Campaigns that would take weeks to get to market can now be executed in days. 

“As we just focus on image generation, I see it disrupting photography, stock image libraries, illustration development and, in time, video production houses,” says Ballantyne. “The quality of still images is improving by the week and the cost/value proposition is just too strong for agencies and clients to ignore it long term. AI video is still quite crude, but within a couple of years, you’ll be able to produce broadcast-quality short-form videos that you’ll struggle to identify as being AI. AI video will be huge.”

The advertising landscape is primed for an AI explosion in 2024 and beyond. Ads will adapt in real time to user context, location, mood and even surrounding conversations, creating eerily relevant experiences – think ads adjusting tone based on weather updates or tailoring content to a user’s recent online searches.

AI will generate and test countless ad variations on the fly, optimising elements like visuals, copy and calls to action for maximum impact on individual users – personalised video ads that morph based on viewer demographics. It will power interactive ad experiences like AR product demos or personalised chatbots embedded within ads, blurring the line between advertising and entertainment. Imagine trying on clothes virtually through an ad or having a chatbot answer your product questions directly.

AI-powered voice assistants will become key ad platforms, with brands competing for prime placement during user queries. Enter dynamically adjusted sponsored product recommendations based on spoken inquiries. AI will analyse vast datasets to identify potential customers with high conversion likelihood, allowing for hyper targeted campaigns that reach the right people at the right time, predicting which website visitors are most likely to buy a specific product and targeting them with personalised ads. Algorithms will continuously optimise campaign budgets in real time, maximising ROI and eliminating the need for manual adjustments. 

Whether generating personalised ad copy, composing music or scripting video narratives, AI will assist (or even spearhead) the creative process, freeing up human minds for strategic direction and emotional resonance, while using AI-suggested headlines or AI-generated video outlines based on target-audience data.

Of course, challenges remain. Navigating user data responsibly and ensuring transparency in AI decision-making will be crucial, and finding the right balance between AI automation and human creativity will be key to crafting impactful campaigns. Accurately measuring the success of AI-powered campaigns in complex ecosystems will require new analytical approaches.

In the social media space, Creative Director & Strategist at Social Global Grind, Francesca Alexander, foresees AI’s ability to analyse data at scale, enabling the predictions of trends and tailored SEO-friendly advertising strategies that will be highly relevant to individual user preferences.

“AI’s role in improving campaign effectiveness is undeniable,” she says. “By employing AI-driven analytics, we can gain deeper insights into user behaviour, optimise content in real time and measure the SEO impact of our social media campaigns more accurately. Collaborating with specialist AI agencies can provide access to advanced tools and insights that amplify our SEO efforts on social media.” 

So, what do specialist AI agencies offer marketers? Agencies with dedicated teams of AI specialists, data scientists and strategists possess deep knowledge of various AI tools and applications in marketing. They can tailor AI solutions to your specific needs and goals, going beyond generic off-the-shelf applications, and expedite the AI adoption process, saving you time and resources compared to building in-house expertise. 

Specialist AI agencies are bringing a lot of firepower to the table when it comes to areas like personalisation, efficiency and automation, optimised advertising content, predictive analytics, customer insights and CRM. AI can analyse vast datasets to create hyper- personalised segments based on demographics, behaviour and preferences. Agencies offer tools and expertise to leverage this for tailored messaging and ad experiences.

Such agencies often have access to advanced AI tools and platforms that might be out of reach for smaller teams, and are able to provide ongoing support and guidance throughout the AI implementation process and beyond. If you lack internal AI expertise, agencies can bridge the gap and ensure effective implementation. Their experience can help achieve faster results and unlock the full potential of AI in any marketing.

In the rapidly evolving AI landscape, agencies can help marketers stay ahead of the curve and avoid falling behind competitors, and partnering with an agency allows the busy marketer to focus internal resources on their core marketing strengths, while leveraging external expertise for AI. Hiring a specialist agency can certainly be more cost-efficient than building and maintaining an in-house AI team, especially for short-term projects or specific needs.

Having said that, not all AI agencies are on the same level. Marketers should look for one with experience in their specific industry and marketing goals, to ensure transparent communication and alignment of expectations regarding project goals, data sharing and reporting.

AI is a tool to augment human expertise, not replace it, and overall, working with a specialist AI agency can be a strategic move for marketers seeking to unlock the full potential of AI in their campaigns. 

The future of advertising is undoubtedly intertwined with AI. By embracing its potential and navigating its challenges thoughtfully, agencies and brands can unlock unprecedented levels of personalisation, engagement and effectiveness; however, as Gray succinctly puts it: “There’s a lot of fear regarding AI, as there are many unknowns. AI significantly helps, but it doesn’t provide us with the completed end result. Human input is still a necessity. A skilled AI marketer can provide higher- quality inputs and get better outputs, but the garbage in, garbage out [GIGO] principle still holds.” 

This was first published in our March/April 2024 issue.

Graham Medcalf

About Graham Medcalf

Graham Medcalf is former Editor of NZ Marketing and regular contributor.

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