Artificial Intelligence in advertising impact

Artificial Intelligence in Advertising

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Artificial intelligence will be as revolutionary to work as the industrial revolution and the invention of the web so let’s look at the likely impact of AI in Advertising.

But first, let’s make sure we know what we mean by the key terms.

What is Artificial intelligence?

This is the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions.

More recently people have amended/upgraded the term to “augmented intelligence.” Augmented Intelligence uses technology to enhance, support, and complement human cognitive functions, rather than replacing humans, so perhaps seems less intimidating.

Within AI there are several subcategories or types of AI as follows:

Machine learning (ML)

This is the most “famous” category of AI. As the name suggests its goal is to teach technology to think and operate as humans, allowing machines to continuously learn from past experiences to make predictions.

Natural language processing

The ability of software to read and understand a variety of written documents, such as contracts and websites, humanly.

Rule‑based systems

Capture and use experts’ knowledge to provide answers to tricky problems that are governed by fixed rule‑sets

Robotic process automation (RPA)

RPA robots are software programs designed to automate transactional, rules‑based tasks by mimicking human interactions.

Computer vision

The ability to identify objects, scenes, and activities in naturally occurring images

Speech recognition

Transcribes human speech automatically and accurately. The technology improves as the machines collect more examples of conversation

So what will be the impact of AI for Advertising?

We believe that AI is both a huge opportunity and a potential threat to the world of creatives.

To quote Carlos Pezzani:

“Along with Big Data and Analytics, AI not only represents one of the most important technological innovations for the decade. It’s also the most solid opportunity presented to make technology and innovation a part of the ad industry”

We believe that there 2 areas that AI in Advertising will manifest itself:

  1. In the “Front office” – It will change the agency offering by creating new products and services that ad agencies sell. This is already happening when we look at programmatic advertising.
  2. In the “Back office” – It will (or should) reduce the administrative burden by automating tasks, reporting, producing exception reporting. This will allow management to focus on managing the business.

In this blog, we will focus on the “Front Office” opportunities/threats and the next blog will focus on the “Back office”.

Artificial intelligence in the front office

Front Office – The advertising offering

No doubt this is more interesting to advertising principals. The list below shows how AI is already impacting what advertisers do and sell to clients. For example:

Scripting

In 2018, Lexus released what it called the first advertisement scripted by artificial intelligence. You can see it below if you have not already but it’s pretty good (certainly for a first attempt).

Lexus used IBM Watson to analyze 15 years of car and luxury brand campaigns that have won Cannes Lions awards for creativity, as well as a range of other external data.

Maybe it’s a gimmick but the fact of the matter is that IBM has its Watson Advertising arm with a range of AI-driven products so take note! This is just the start.

Programmatic Advertising

As online consumers, we can’t help but see programmatic advertising at work.

  • We google flights to London and for a few days, we see banner ads with offers for flights to London.
  • You look up a product on Google and Amazon gives you the price and when you can expect to have it.

That’s programmatic at work. ML technology algorithms analyzing people’s online behavior, enabling real-time campaign optimization, and targeted messages to audiences with the highest chance of a conversion.

Of course, as advertisers, you already know that.

(Big) Data Management

“BW” (Before the web), advertising was very hit and miss. It was impossible to see how effective spending was and clients had to trust the agency that the ad was hitting the right target. That is no longer the case now. However, there’s another issue. Now there is so much data available, that it’s impossible for a human to collect, process and make decisions based on it.

That’s where ML comes in. It can take the guesswork out of capitalizing on vast amounts of data and providing insights that can be applied to AI-based, targeted advertising campaigns. The programmatic ones that we spoke about above.

The fact is clients and agencies want to optimize the vast amounts of data at their disposal to create better campaigns and drive more impact and AI/ML helps with that.

Smarter Websites

These give visitors a personalized website experience based on their demographics, “smart” chatbots, etc. Google itself has some great tools here https://cloud.google.com/products/ai

Copywriting & Optimization of content

Better copy using AI. For example, Copy Shark creates copy automatically.

Content can now be automatically optimized using AI. The social media channels (e.g., Facebook, Google Ads) score ads and show how likely they will do well. As a result, there are AI businesses in place that help optimize content like Phrasee. 

Intelligent A/B testing

A/B Testing has been around for a while but it traditionally has had the limitation of just testing 2 options. AI can go beyond traditional A/B testing to make predictions about how a creative will perform before the campaign goes live.

Summary

We’re just scratching the surface here because possibilities are abundant when it comes to the application of Artificial Intelligence in Advertising. Innovative agencies will adopt these AI as an opportunity and will find ways to leverage these to their advantage. Check out our next blog which talks about AI’s back office opportunities.

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