AI in Advertising: Everything you need to know how AI is shaping Ads in 2024

Advertising has been around for quite a while now, much longer than most of us can even imagine. Did you know the first newspaper ad in the US was published way back in 1704?

It has been 320 years since then; the advertising industry has undergone massive changes - the key among them being the rise of AI. Interestingly, the role of AI in advertising became instrumental during the late 1990s and early 2000s when eCommerce boomed. This was the time when AI opened up new avenues for marketers, particularly in the areas of data collection and analysis, which enabled them to engage customers in a more personalized way.

But how exactly is transforming the present advertising landscape? Let us find out.

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How AI is Transforming Ad Creation, and Why Do You Need It?

Take a look at this commercial… What is unique about it? Any guesses?

It was created by artificial intelligence. To be more precise, it was created by Stable Diffusion, a deep learning, text-to-image AI model. 

How about this one…

This was an ad campaign created by BMW where they projected AI generated artwork on their 8 series cars.

Businesses across the globe are using AI in different ways to create ads like these today. While the above ads stand out for their unique usage of AI, the vast majority of the brands use AI mainly to scale their ad generation process.

What used to take several days and thousands of dollars a few years ago is now achieved in a fraction of the time and money, all thanks to AI.

So, how exactly does AI help in scaling ad generation?

By facilitating the automation of content creation. Right from generating ad copies to designing visuals, it can take care of everything. For example, Eacel, a powerful ad creatives generator uses AI to create stunning ad visuals along with persuasive ad copies. All you need to do is input basic ad parameters and upload your brand elements, Eacel (and AI) takes care of the rest!

Such levels of automation can enhance the scalability and improve your team’s efficiency in the ad creation process.

Another key factor about these AI ad generation tools is their predictive capabilities. They have been trained on massive volumes of proprietary ad data which enables them to extract signals from successful campaigns and apply the learnings during new ad creation. This not only makes your content stand out in the crowded digital space but also eliminates guesswork you need to make on what ad elements will appeal most to your potential customers. 

On that note, here are 5 reasons why you need AI in ad creation:

• It lets you create personalized ads at scale
• It reduces the time and resources needed to develop campaigns
• Its audience segmentation capability ensures targeted content delivery. This maximizes engagement.
• AI-optimized ads increase conversion rates and optimize your ROAS
• It measures and analyzes ad engagement to generate data-driven insights. This lets you optimize your campaign and reduce your ad spending.

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Use cases of AI in advertising 

Now that you have an understanding of how AI is transforming the ad creation process, let us look at a few other applications of AI in advertising.

AI-Driven Targeting and Personalization 

AI’s profound impact on advertising can be attributed to its innate ability to understand the language of your audience and know what motivates them. It can generate and adjust your ads to reflect their aspirations and needs.

Similarly, AI tools can identify patterns and trends within your ad data by going beyond regular demographics. They can look into the interests, behaviors, and preferences of your target audience and create micro-segments within them. This allows you to tailor your messages to specific niche groups with precision. This improved understanding of your potential customers further helps in building lasting relationships with them.

For instance, imagine you have two customer segments, X and Y. Segment X responds to ads that focus on discounts and monetary benefits, while Segment Y responds better to humor and wittiness. An AI tool can actually identify these differences today and generate ads with tailored messaging and creatives like the one above to cater to both types of audiences.

While the ad on the left will resonate with segment X, the ad on the right will be preferred by segment Y.

Improving ROI with AI Analytics and Optimization

Ask a marketer - What is their biggest hurdle in advertising?

Believe us - a majority of them will say tracking and measuring ROI of their campaigns. This is quite understandable considering the fact that many of them do not have the right tools and technologies at their disposal to do this. 

But the marketers already using AI tools like SEMRush and Google Analytics are constantly gaining access to real-time data that is being used to measure engagement and predict future performance. It becomes easy for these marketers to see what’s working, what’s not, and how things are going to shape up in the future, making ROI measurement much easier.

Source: Google Analytics

But what about improving the actual ROI? Well, AI tools come in handy there, too. By analyzing your ad campaigns across multiple channels, they can:

• Pick trends by examining metrics such as click-through rates, conversion rates, and audience engagement. 
• Identify high-performing segments and channels, allowing you to allocate your budgets more effectively. 
• Highlight performance issues you didn't even know you had.
• Forecast future performance, enabling you to adjust your strategies proactively and capitalize on emerging opportunities.

All these activities help in driving higher returns on investment. 

Furthermore, AI tools enable you to conduct A/B tests to refine your advertising strategies continuously. AI algorithms can test different combinations to identify the most effective elements for each audience segment. Through iterative testing and optimization, you can fine-tune your campaigns in real-time, maximizing performance and minimizing wasted spend. Again, leading to better ROI.

Check Competitors’ Strategies Using AI

As an advertiser, you seldom operate in silo. Even if you have an awesome campaign in place, you are going to face stiff competition from the other advertisers. They will be constantly trying to outdo you by reaching your audience with unrelated offers or actively competing in the same space. AI can give you a leg up in such scenarios. 

There are many AI tools that enable you to spy on your competitor’s ad strategy. Spyfu, Adbeat, and Adplexity are classic examples. They can give you a complete picture of your competitors’ campaigns, including details like:

• Which ads are your competitors running? 
• Which platforms are they using?
• How much are they spending?
• What offers are they promoting?

Armed with this information, you will know exactly what your competitor is up to and easily come up with ways to outmaneuver them.

Dynamic Ad generation

A quick introduction - dynamic ads are those that change in real-time based on user behavior. These ads use product feed data to generate more personalized experiences for customers based on the stage of the funnel they are in. AI tools can be used to effortlessly create such dynamic ads for your target users. 

By automatically analyzing user data, such as browsing behavior, demographics, and past interactions, these tools can dynamically adjust campaign content that resonates with each viewer, maximizing engagement and conversion rates. In other words, AI can deliver highly contextualized advertising experiences. Whether it's showcasing relevant products, highlighting personalized offers, or adapting messaging based on user behavior, they ensure that each ad impression delivers maximum impact.

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The Future of AI in Advertising 

In the last few years, artificial intelligence has made a significant leap in the advertising space. The momentum is going to continue in the coming days as well. In fact, by 2028, the AI-based marketing space is expected to reach $107 billion. This stellar growth will be driven by AI’s ability to help brands go beyond traditional methods and serve hyper-personalized brands. This shift is also bringing in new avenues for creating more impactful advertising campaigns in the coming days. Here are some trends in AI-based advertising that we believe are going to rule the future:

• Chatbots like ChatGPT and Google Conversational AI are going to create a tectonic shift in the way ads are created and managed. We will be seeing more streamlined ad operations thanks to these platforms as they will allow users to edit and manage campaign creation via chat and prompts. 

• The ability to adapt ad campaigns to different locations and channels will become more common in the coming days. For instance, WPP, a popular ad agency, recently partnered with Nvidia to generate their AI model and generate large volumes of ad content without the need for costly on-location production. 

• We will see style guides with instructions that are specifically written for generative AI prompts. In other words, AI tools will automatically understand and follow your style guide while creating ads without your intervention.

• AI will help brands create targeted ads after the sunset of third-party cookies. With data privacy being a significant concern for a vast majority of the global population, the day is not very far when third-party cookies will disappear for good. They will be replaced by AI tools that will analyze large volumes of data and find more subtle patterns to generate targeted ads.

• Large Language Models (LLM), a subset of NLP, will make a significant stride in the coming days. This model offers a chat-like interface that will translate your questions into SQL queries and instantly retrieve an answer. It will break down the barriers presented by traditional data analysis methods. For instance, you can ask the model - “Show me the daily ad spend from Google over the past month,” instead of manually searching for the information. 

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Conclusion

As more and more marketers embrace AI capabilities, we can expect a shift in the way ads are created and managed in the coming decade. From campaign creation to targeting methodologies, AI’s transformative impact is going to improve the overall efficiency of your ad campaigns and raise the bar of expectations. And if you wish to be a part of this revolution and embrace AI in your ad creation process, start your journey by creating an account with Eacel. Generate unlimited ad creatives for your campaigns now!