AI-Powered Advertising: How to Personalize Targeted Ads with Artificial Intelligence Solutions

Iryna Bilyk

The quicker businesses implement innovative technologies, the more successful the results they will receive compared to their competitors. The same scheme works in the marketing industry. The more innovative approaches marketers use, the better results and conversions they get. Today, we'd like to explain how to improve ads with better personalization. Artificial intelligence plays the most significant part in it.

How is AI implemented in marketing?

Artificial intelligence is now deeply rooted in marketing without actually making it obvious. You come across the use of AI in the digital world without even knowing it. The smart playlist you get based on your musical tastes is part of AI. The use of chatbots and personalized service are also because of AI. The recommendations by Google and Gmail as you start typing are also a part of AI. 

Speaking of marketing, here are the most common examples of how AI is helpful in the marketing industry.

Personalized chatbots

Personalized chatbots are part of conversational marketing technology. Chatbots are used in marketing to allow users to feel free to communicate with a brand. Customer queries are dealt with almost instantly when receiving an inbound chat message.

Nowadays, when you open a website, you are usually welcomed by a chatbot that asks you to engage with them if you need any assistance. 

These provide personalized solutions to every user.

They work by sensing similar patterns and facilitating a conversation by catching specific fixed keywords used by the lead. Thus, chatbots tend to be more precise and that personalization yields better results.

AI-powered website content generation

74% of the users want their website content personalized, and not generic.

Brands use AI-powered content marketing tools to personalize the website content. There are AI tools that help marketers identify the trending content topics for potential website blogs. Machine learning also helps identify customer behavior and content preferences that allow content marketers to show users only those pages and content they would like to see.

How AI tools drive ad personalization

AI not only automates most of the marketing tasks but also helps create personalized ads. Here are a few ways in which AI tools drive ad personalization.

Product recommendations

As a social media user, you are well aware of the product recommendations. Do you come across ads of eCommerce sites displaying product recommendations while you are scrolling through the posts? AI personalization tools drive these recommendations. This is made possible by using the user's search history, previous actions on a device, and are also determined by the actions of users that fall under your demographics.

For instance, the ‘customers who bought this also bought…’ feature relies on collaborative filtering and makes use of the customer’s shopping history, and analyzes how often two products are brought together. Based on the evaluation, it recommends suitable products to the users.

Dynamic creative optimization

This technology allows ads to adapt according to the taste and preference of the user. The ad can change its color, theme, layout, and design according to users' preferences.

Facebook, for instance, uses dynamic creative optimization to serve users with content they care about, both through paid advertising and organic techniques. In fact, Facebook’s algorithm is constantly learning to serve users with the ads they are most likely to appreciate and interact with.

This design solution can help companies be more creative with personalization and branding.

Predictive bidding

This is another type of AI-powered bidding system that helps a marketer determine the type of bidding that will be best suitable as per the business strategy. It helps in minimizing the cost per ad impression.

AI works by determining the value of each keyword you bid on in a bidding campaign. After assigning a value to each keyword, AI determines how changes in cost-per-click (CPC) can impact costs and clicks. Next, AI comes up with the best bid for each keyword depending on the goal you specify.

The advantages of using AI-powered advertising

AI takes advertising to a whole new level. There was a time when processing huge amounts of data was an Augean task. But today, in the era of AI, processing enormous amounts of data only takes seconds.

When coupled with personalization, AI marketing can help brands, resulting in higher conversion rates and sales.

Artificial intelligence is the best means to personalize targeting ads on marketing channels like email, website, digital advertising, eCommerce, mobile, or retail personalization.

Some of the insightful stats say:

  • Personalized emails can garner six times more transaction rates. The personalized subject line also increases the average open rate by 7.4%.
  • The personalized home page promotions influence 85% of customers to buy. The customized shopping cart recommendations influenced 92% of the customers.
  • 88% of the US matters saw visible improvements in sales due to personalization.

For clearer positive signs of using artificial intelligence in marketing, here are some of its advantages.

Increases conversion rates

Like any other marketing campaign goal, AI advertising or personalized AI advertising contributes to higher conversion rates. CRM or customer management tools that have built-in AI provides insight into which consumer is likely to contribute to the conversions. You can also hire developers to design custom CRM tools. 

Such tools also help identify the type of product a client is likely to buy or what kind of message will have a positive impact. Thus, the sales manager gets a hint on where to focus the efforts.

Identifies ways to customer communication

AI also helps pinpoint the right channel amongst the various channels to communicate with a customer. It helps determine which communication and emails, push messages, calls, and mobile notifications are best for a given segment of customers.

The challenges of setting up AI-powered advertising

AI-powered advertising reaps a bundle of benefits if its challenges are overcome with precision. Here are some of the challenges of setting up AI-powered advertising:

Insufficient experience

Many companies fail the AI-driven advertising stack due to a lack of technical expertise in working in the field.

However, you can always hire quality engineers with AI expertise who can help.

Overly expensive

Another challenge of using AI-driven advertising is related to its cost. As compared to all other forms of advertising, AI advertising is pretty expensive. AI automation, segmentation, and other AI-driven techniques demand higher expertise, so the cost involved is more.

If you are to choose between AI advertising and non-AI advertising, for more advanced and concrete results, AI-driven advertising is preferred. It helps segment audiences well, assists in organizing ad campaigns, and sends personalized messages instantly.

The AI-powered tools are smart tools that determine if the purchased ad suits the brand's targeted audience. The programs also buy impressions on websites and channel them to the desired audience at the right time on behalf of the advertisers.

Iryna Bilyk

Iryna Bilyk is an expert content marketing manager at YouTeam - a marketplace for instant engineering team extension. She passionately discovers and writes about technology, innovation, and software solutions.

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