This is my 2022 outlook on AI in advertising. The predictions in it are things I thought could happen at the time. They are not measured results or a forecast for today.
In recent years, artificial intelligence (AI) has spread fast, helped by new tech like machine learning and natural language processing. Machine learning lets software learn from data. Natural language processing lets it work with human language. So several firms now use AI to improve how they work.
The ad industry is no exception. AI is being used to build new ad tech that can make ads better for the people who see them. For example, IBM built a tool called Watson Ads that uses AI to help brands make ads that work better and draw people in. Watson Ads offered ads that people could talk to, ask questions and get product details from. That is just one use of AI. It does not prove that one tool can fine-tune ads for all channels. ROI, or return on investment, is what you get back for the money you put in. Whether a Watson Ads campaign improves it depends on the campaign, its costs and its results.
In this blog post, we will explore how AI will shape advertising in 2022. We will look at how it can be used to target ads, to tailor what each user sees, and to improve ad campaigns. We will also discuss the problems the ad industry may face in future as AI grows.
How AI can be used for targeting
Advertisers have always wanted to know the people they hope to reach as well as they can, so they can make the best ads. Now that AI is here, this matters even more. AI can help advertisers test ways to aim their ads more precisely. It does this by learning things like what a person is interested in, what their lifestyle is like, and what kinds of products they are likely to buy. Advertisers can then make ads that fit each viewer far better. That is likely to get more people to buy.
AI can also help advertisers aim their ads with less waste. Say an advertiser knows that a certain type of person is more likely to buy a product. They can use AI to target that type of person with their ads. This can save them a lot of money. They can focus on the people most likely to care about what they sell.
AI will be able to use a customer’s interests, demographics and past behavior to make each ad feel more personal.
In this 2022 outlook, I expected AI to help advertisers test more precise targeting. AI will be able to spot which ads are most likely to be seen and engaged with. It will learn this from data on what customers like and how they act. AI will be able to use a customer’s interests, demographics and past behavior to make each ad feel more personal. Demographics are traits such as age, gender or location. Such tailoring could make ads more useful. But a better customer experience needs evidence of its own. So does a better return on experience (ROX), which is what a business gets back from what it spends on that experience.
Using AI for personalized user experiences
Advertisers have always looked for new ways to tailor their marketing, so they can catch the eye of the people they want to reach. With AI, that process is about to get a lot more advanced.
Thanks to AI, advertisers will be able to tailor ads to each person. These can draw on anything from a person’s browsing history to where they are right now. This will let them target certain people with ads that fit their interests and needs.
AI will be used to create custom experiences for users. Say you visit a website that uses AI. The site may change what it shows you, based on what it knows about you. AI will also suggest products, services and content tailored to each user. This will help businesses connect with customers in a more meaningful way. It will also make them more likely to buy.
People may respond better to ads that fit them, but tailoring alone does not ensure trust, loyalty or a sale.
This could make ads more useful and help build trust. But targeting that feels intrusive, or gets things wrong, can also harm that trust. People may respond better to ads that fit them, but tailoring alone does not ensure trust, loyalty or a sale.
In the coming years, we can expect to see AI tailor far more ads. It’s a trend that is set to transform the industry. Advertisers should keep a close eye on it.
Optimizing ad campaigns with AI
In just a few years, AI will be able to tune ad campaigns in real time. The aim is to help firms get more out of what they spend on ads. AI can process some data faster than people. That means campaigns can be tweaked on the fly, to test whether changes make them work better. But how often AI gets things right depends on the task and the data.
AI can help improve campaigns by changing bids and by targeting specific demographics. It can also help make ads more personal, and track how campaigns are doing as they run.
AI can also help advertisers target specific channels. Say an advertiser wants to focus on Facebook. AI can help target users who are more likely to respond to the ad. AI can also help decide what time of day to run the ad, and what type of ad to use.
This could help firms waste less of their ad spend. ROAS, or return on ad spend, is the sales revenue earned for each dollar spent on ads. A rise in ROAS is a result to measure, not assume.
In short, AI can help advertisers improve their campaigns and target specific demographics. This could help firms waste less of their ad spend. But a rise in return on ad spend (ROAS) is a result to measure, not assume.
Reviewing and generating creative with AI
Advertisers have always looked for an edge over their rivals. In the early days, that edge was often a clever slogan or image. Over time, they have turned to more advanced ways, such as targeting specific demographics and using data to tailor ads.
In 2022, AI will be another tool in the advertiser’s kit. AI will be used to review and generate creative, the content of an ad, such as its words, images, audio or video. This will let advertisers make ads that work better and feel more personal. People are then more likely to respond to them.
AI will play a big role in how ads are made and shown. AI will be used to generate ads, target customers and measure how well marketing campaigns perform.
The AI will look at what the customer has bought before, their demographics and how they behave online. Then it will make the ad most likely to appeal to them.
Advertisers will use AI to tailor ads to each person. The AI will look at what the customer has bought before, their demographics and how they behave online. Then it will make the ad most likely to appeal to them.
AI will also be used to measure how well ad campaigns work. The AI can track how customers respond to ads, compare what it measures, and suggest changes. But those responses alone do not show what the campaigns caused. When AI does the work of making ads, businesses will be able to save time and money. AI will also help them target their ads better.
Potential challenges
The ad industry is always changing, and it’s hard to know how it will change over the next ten years. Even so, in 2022 I thought AI would have a big impact on advertising.
One of the biggest challenges for advertisers in 2022 will be how to use AI to tailor ads. With so much data to work with, AI may help with targeting. But not all campaigns need to target each person one by one. Advertisers will also need ways to measure how well AI-generated ads work.
AI could also take over many of the tasks people now do in the ad industry, such as making and targeting ads. If AI can do this better than people, it could lead to mass layoffs in the industry.
Another challenge is that AI could be used to play on how people feel and what they like. Say an AI system knows that a person is easily swayed by certain kinds of ads. It could use that to sway what that person buys.
Finally, there is a risk that AI could be used to spread disinformation. AI systems could be used to make and spread fake news stories that are meant to shape what people think.
All in all, AI will change advertising in both good and bad ways. Advertisers who use AI well may find new ways to make relevant ads. Whether it gives them an edge over their rivals depends on the problem, how well they carry it out, and the results they measure.
These are just a few of the problems that could come up when adding AI to ad campaigns. Advertisers and agencies will need to be aware of them and plan for them. That way, ads based on AI can work well and be good for all involved.
In Summary
Overall, AI will have a major impact on advertising in 2022. It will help advertisers make ads that work better and feel more personal. It will also help them track how well their campaigns work, and choose more wisely how to spend their ad budget.
As AI keeps changing, its impact on advertising is growing clearer. How much is spent on AI in advertising depends on the market, time frame and source you look at. So I give no figure here. A number of things are driving the fast growth of AI in advertising. These include brands using more AI in their marketing and advertising, and new ad tools being built on AI.
In the future, AI will get even more advanced. It may use signs of people’s interests and what they have done in the past to help choose ads. Working out how a person feels from those signs is still uncertain.
Many brands already use AI to target people better and to make ads more personal. In the future, AI will get even more advanced. It may use signs of people’s interests and what they have done in the past to help choose ads. Working out how a person feels from those signs is still uncertain. This will let brands make ads that feel even more personal and work even better. Those ads are likely to be better at turning people into buyers.
All of these things point to the fact that AI is going to have a major impact on advertising in the coming years. Brands can look at where AI ad tools fit their work. As they do, they should weigh the value of those tools against the costs, the risks and other ways to do the job.