Artificial intelligence in digital marketing is not a new phenomenon. In 2011, Google launched dynamic search ads. This is a format that allows you to take a list of organic pages and generate paid ads for relevant searches. Google's Smart Bidding algorithm was launched in 2018 (feeling old already?).
Fast forward to today, and AI-powered campaigns are commonplace for digital marketers, but at the same time, advances in bidding algorithms and breakthroughs in generative AI suggest it's just the beginning. I feel it.
Modern marketing campaigns are unknown black boxes, or, more optimistically, “plug and play,” depending on which side of the debate you sit on. Media giants like Google, Meta, and Amazon are investing billions of dollars in development. It's about leveraging AI and making it widely available to advertisers.
Meta already has a suite of AI-enabled tools, such as Advantage+ Creative, which automatically generates different versions of ads and customizes them for different users. Next year, this will expand and advertisers will be able to use his Gen AI to change background images and create new ad copy. This was unthinkable this time last year.
Paid AI technology is also becoming more accessible and cost-effective. Code Interpreter is a ChatGPT plugin that makes data analysis and visualization easy. Canva has started hosting Gen AI features. This means businesses can create new assets without any design experience. Midjourney has also experienced tremendous growth. All are easy to use and cost less than a Netflix subscription on average.
The accessibility and simplicity of AI creates many opportunities for businesses. Small businesses don't need a bloated marketing team or a deep understanding of bidding auctions to succeed with digital advertising.
Instead, the e-commerce platform, content creation technology, and marketing platform itself are seamlessly integrated. Allocate your budget and goals, and Google, Meta, and more will do the rest. In this sense, the playing field is becoming more level.
But what are the risks of these developments? As a social media user, I am increasingly frustrated by the lack of creativity in advertising. If you show strong intentions by visiting a particular girlfriend's website, you will be shown a large amount of advertisements for similar girlfriend websites. If all your ads feel the same, it can quickly become boring.
As a marketer, I find it difficult to surrender that much control. A plug-and-play mentality is great for companies testing the waters, but for companies with a deep understanding of their customer base and their users' journeys, black-box algorithms aren't always effective. AI cannot replace creativity and originality.
It will be interesting to see advertisers take back some of this control as media platforms release more AI-enabled campaign features. “We listened to your feedback,” exclaimed one media partner, who will not be named, during a presentation about the latest AI developments.
Users using Google's Demand Gen can again choose which users to target. Alternatively, with Meta's Advantage+ Shopping Campaigns, you can now guide the algorithm by telling it the value of various audience signals. Within this control and ability to leverage business intelligence, we will see more sophisticated advertisers begin to succeed. Here are three key areas where businesses can gain a competitive edge in the age of AI:
unleash your creativity
Rather than investing in Gen AI to reduce costs, smart companies will use AI to fuel creativity. Tools like Midjourney help with the initiation phase, freeing up time for creative testing and innovation. Ads that feel true to your brand can cut through the noise and capture your audience's attention. Gen AI also creates an agility not often seen in traditional enterprises, allowing companies to easily jump on cultural trends and adjust based on performance insights.
Bid on what matters
Smarter data activation allows businesses to make better use of their marketing budgets. Companies that optimize business outcomes have a competitive advantage. For e-commerce businesses, this means optimizing for profit over revenue, or leveraging inventory data to stop offering products that are low in stock or have high return rates.
For subscription businesses, this may mean optimizing for customer lifetime value or users who continue past a free trial period. This allows you to bid more competitively for the right users and ultimately beat out companies that only focus on short-term acquisition costs.
know your audience
Predictive modeling can inform marketing strategies to improve customer lifetime value, and there are many out-of-the-box solutions that allow companies to better understand their customer base in this way. But companies seeking a competitive advantage will need to go beyond stock solutions.
This means investing in data scientists to understand more subtle audience signals and microconversions. These insights should feed into other parts of your business, from creative development to content strategy to user journeys.
I'm excited about recent developments in AI and what's already happening. I support anything that lowers the barrier to entry. In this case, that means more brands can reach potential customers.
We also welcome more established advertisers to take on the challenge of standing out and testing new approaches to marketing. AI may level the playing field for advertisers, but only companies that leverage its power to innovate will succeed. Leverage AI not only to reduce costs, but also to create opportunities to differentiate yourself from your competitors.
Jess Dickenson, COO, Precis
