The Risks and Benefits of Using Artificial Intelligence in Advertising in 2024

Do you ever wonder how sometimes ads on social media or any other platform pop up to offer the solution to the issue you’re thinking about at that moment? This is due to the massive amounts of research and data analysis carried out by advertising platforms. Now that it’s the era of AI, marketers are increasingly enthusiastic about using artificial intelligence in advertising. In this blog, we’ll discuss artificial intelligence in advertising and the marketing industry, whether it’s effective, and more.

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How Do Ads Find the Right People?

Platforms such as social media and search engines effectively track user behavior. They can do so by browsing results for specific keywords and monitoring website visitation statistics like bounce rate or connection duration per page viewed. Additionally, they keep track of likes, shares of particular posts among their followers, and the number of people who clicked on the links published by them.

Using this information, the platforms create elaborate user profiles. These profiles include demographics, interests, preferences, and recent online activities. And that’s how advertisers target their audiences through the process known as directed marketing. For example, if you have recently searched for a certain item or visited another website within the same category, then that platform may present ads about similar products and services to you.

In the next sections, we’ll understand whether artificial intelligence in advertising is helpful. If so, we’ll explore the advantages marketers receive by using AI in marketing and advertising.

Can AI Be Helpful in Marketing and Advertising?

According to the Statista Global AI Adoption Survey (2023), 87% of advertising and marketing professionals consider AI important for their future success, with 62% already using it in their campaigns. This stresses the advantageous side of artificial intelligence in advertising.

Accenture report titled “Unlocking the True Potential of Artificial Intelligence” is focussed on AI’s ability to process large amounts of data and identify hidden patterns. This ability of AI can help improve targeting, personalization, and optimization of marketing campaigns. Although the report does not openly highlight data analysis speed as the leading benefit, it acknowledges its role in enhancing these capabilities.

(Also read: AI For B2B Marketing And Sales: Easy Guide To Scale Your Business)

Exploring the advantages of artificial intelligence in advertising for improved marketing results

AI can increase efficiency in marketing, which can be very advantageous for companies providing advertising and marketing services. A study by Adobe revealed that brands using artificial intelligence in advertising, specifically targeting, saw a 5x increase in click-through rates and a 3x improvement in conversion rates.

SEO Toronto Experts suggest AI in advertising can automate repetitive tasks and streamline workflows. Here are some top advantages that AI in marketing and advertising can provide:

Prospect Scoring

Suppose you manage an e-commerce portal that receives hundreds of leads in a day from different channels. These leads come from web forms, social media, and email subscriptions. Given the magnitude of leads that are coming in, it is very crucial to set priorities to decide which ones should be pursued first because not all leads have an equal likelihood of turning into customers.

How does AI present a solution?

Using AI algorithms, marketers can analyze data on leads. This data includes demographics and behavior patterns based on their history of interactions with your company’s product. It is also possible to use information related to what type of website they have visited before. Based on this assessment, AI can evaluate each lead as to their potential for conversion.

Example: A lead who frequently visits the product pages of your website, adds items to their cart, and stays on it for long hours may get a higher score compared to someone only visiting once or twice without clicking anything.

The global beauty retailer Sephora is an excellent case of how AI-powered prospect scoring can be employed to personalize shopping and increase conversions. The brand is notified of a 20% lift in conversion rates and a 15% increase in the average order value after the usage of an AI-driven prospect scoring.

Customer Acquisition Routing

Following up with the e-commerce scenario leads that are scored need to be connected with respective sales representatives for further actions. Manually assigning leads to sales reps can be time-consuming and also may not always be done accurately.

How can AI help you here?

AI can help with the lead routing process by analyzing data on leads and the performance of sales reps. It can then distribute the leads to agents, depending on a lead’s past territory as well as other factors, including agent expertise and previous success rates.

Example: In case a lead wants to buy products from one category, AI could assign them to that sales rep who is specialized in this product area and, as a result, increase their chances of presenting him with a successful deal. Companies like Salesforce, HubSpot, and Zendesk are actively using AI for smarter lead routing.

Brand voice

Email marketing is one of the ways of brand voicing. Email marketing campaigns aim to integrate your leads by prompting them to buy. But, creating personalized, timely email campaigns for each lead can be laborious and challenging to handle manually.

Can AI help here?

Yes, definitely. AI-powered email marketing platforms can automate the process of generating, scheduling, and performing analysis for email campaigns. AI can create a segmented email list that considers the lead behavior and preferences. After that, send these emails at the best times of day or week for engagement. It is also possible to optimize future campaigns by analyzing metrics related to engagement.

Example: Vue.ai’s Cart Abandonment Solution reduces and recovers abandoned carts using AI-powered personalization. It uses the approach of segmenting the users and sending automated follow-up emails with personalized content, offering incentives. It also determines the optimal timing for sending the emails. Results have shown a 5% increase in customer retention rates and a 58% increase in email click-to-open rates through personalized campaigns.

Overall, this example showcases the effectiveness of AI in improving customer experiences and driving conversions.

Customer Service

Your website visitors may have questions regarding the services or products. Enabling immediate round-the-clock support for website visitors is not an easy task and can prove to be challenging.

AI’s role

AI-driven chatbots can be programmed to answer frequently asked questions and provide good suggestions on products while allowing customers to even conduct some simple transactions directly from their website. The best part is that these AI-powered chatbots can apply natural language processing for the analysis and answer user queries in real-time.

Example: Fandango’s chatbot helps moviegoers find showtimes, purchase tickets, and discover nearby theatres. It simplifies the ticket-buying process and enhances the overall experience of a user.

Artificial Intelligence Advertising Examples Shaping the Future

AI in marketing examples showcases innovative approaches to reaching and engaging target audiences effectively. Once considered a futuristic concept, AI in marketing examples actively shapes how brands engage with their customers.

Examples of artificial intelligence in advertising encompass a wide range, from hyper-personalized ad experiences to automated campaign optimization. All of this indicates a clear trend toward enhancing efficiency and impact. Overall, the examples provided above demonstrate the utility of AI in advertising and marketing.

Concerns About Using AI in Marketing

While AI promises efficiency in the field of marketing and advertising, there are several concerns about its implementation. Let’s take a look at them:

AI Might be Biased

AI algorithms lack transparency, raising concerns about fairness and potential bias in decision-making. It’s difficult to understand how the algorithm puts forth the recommendations. So, how can we be sure the algorithm isn’t biased against some groups? For instance, an assembled model based on the history of prejudiced data and information might target ads to select demographic groups unfairly.

Privacy at Risk

Marketing personalization requires a certain level of data gathering, but it is critical to find an appropriate balance between personalization and respect for people’s privacy. This involves being open about data practices, obtaining the informed consent of users to their information, and giving control over usage.

How Does Using AI in Marketing and Advertising Cause Data Dependencies?

Using artificial intelligence in advertising and marketing creates significant data dependencies. This dependency poses both opportunities and challenges, demanding careful consideration from marketers.

A 2023 MarTech report has uncovered that an incredible fifty-six percent of marketers have difficulties in gaining access to quality data over something they refer to as the challenge with dependency on data.

AI works on a continuous data stream mechanism, meaning it would recommend your products based on past purchases.

Let’s understand this with the help of an example:

Suppose you buy a new pair of running shoes online. An AI tool on the website then recommends other items like socks, sports bras, or energy drinks. The AI tool does not fulfill your demands; it merely analyzes and learns from data to come up with such recommendations. Now, the data may be your purchase history, the user behavior of other users, or general market trends. What is more, this data stream should be continuous. Without fresh data inputs, it becomes less effective. This means it could miss new trends and user preferences, potentially recommending outdated products.

In a Nutshell

While artificial intelligence in advertising presents a powerful tool for increased efficiency in marketing, it is important to use it responsibly and with ethical considerations in mind. You can research more and find relevant artificial intelligence advertising examples to inspire you strategically to maximize its benefits while mitigating risks.