AI and Advertising: A Marketing Agency Perspective

When AI (or, more precisely, ChatGPT) burst onto the scene in late 2022, it caused a seismic shift in the advertising world that seeped into every step of marketing campaigns — from planning to execution and optimization.

At an agency level, having increased data analysis capabilities meant companies could now create incredibly personalized, impactful messages at scale. 

Here are some of the many ways that AI has already begun to reshape advertising as we know it and what could be on the horizon for marketing agencies, large and small. 

Key Takeaways

• Data-driven personalization, powered by AI is enabling advertising agencies to improve audience segmenting, serve personalized ads in real-time, and optimize ad spend budgets.
• AI is improving the media buying process and helping advertisers test iterations of ad campaigns to produce the best performing results.
• AI is enhancing efficiency in advertising agencies, freeing up time for advertisers as well as other marketing professionals such as content marketers and social media marketers.

Data-Driven Personalization Backed by Detailed Insights

First, and perhaps most importantly, AI can collect and process immense amounts of data. This enables advertising agencies to analyze and better understand their audience with laser-like accuracy and precision. 

AI algorithms can help advertisers identify the groups of users who are most likely to convert based on data. This aligns ads with search intent. 

With AI’s data insights, marketing agencies can:

• Improve audience segmenting. Marketers can customize targeted ‘micro-segments.’ For example, they can tailor messaging based on important details like:
  • Purchase history
  • Search history
  • Social media activity.

• Serve incredibly personalized ads in real time. For instance, Google Ads offers AI-powered search ads that aim to send users the most relevant ads. For example, imagine you’re browsing for the best walking shoes for women:
  • You’ve researched some options but haven’t made a purchase yet.
  • Specifically, you’re looking for better arch support. 
  • AI-powered advertising can incorporate the search intent you’ve established and recommend ads with shoes that feature arch support.

• Optimize ad spend budgets. AI also helps with budgeting. For example, Google Ads notes that its AI features can help you to make the most of your bids and ad budget.
  • In advertising agencies, these features can complement advertisers’ expertise to help them determine how much ad spend a client may need to reach their goals. This helps focus efforts on ads that are performing well while improving client return on investment (ROI) as a whole. 

These are just a few examples of the hyper-personalization that AI can offer advertising agencies. 

Creative and Media Buying Automation

According to a Forbes article, AI also makes media buying more efficient through programmatic advertising. 

This automates the bidding in terms of where and when ads are placed (such as the best time of day), so marketing agencies can maximize ROI for clients by getting ads placed in front of the right people at the right time and in the right place. 

Further programmatic advertising may also incorporate data on the device type (think mobile vs. desktop). This can help advertisers to show ads in the best format for the device.

Then, AI tools can also help media agencies quickly create and test media assets and elements like text, CTAs, and graphics in response to audience interaction.

This frees up time for media agencies to quickly iterate and test which versions of an ad resonate most with a target audience by generating a variety of combinations and testing them until they discover what works.

Greater Efficiency

One of AI’s greatest benefits is its ability to automate repetitive, time-consuming tasks. 

Everyday advertising agency tasks like data entry, keyword research, and content optimization can now be streamlined with AI. This saves time and frees up staff to work on high-level strategic and creative work. 

While the time-saving potential is an asset for campaign management in advertising agencies, this benefit also applies more broadly to different types of marketing agencies, such as content or social media marketing agencies.

What’s In Store for the Future? Final Thoughts

While there isn’t 100% certainty about what AI and advertising may hold for the future, judging by the current track, we have a lot to look forward to. 

For example, AI-powered predictive analytics is a forward-thinking marketing strategy based on data that aims to anticipate what consumers want before they search. As AI models advance, the potential of applying predictive analytics to increase organic and paid traffic may also improve.

Although it remains to be seen exactly how AI and advertising will continue to blend together, it’s likely that advertising will gradually become more intuitive as the AI-driven data analytics that hyper-personalizes ads will continue to advance.

Interested in learning about more of the ways that AI is shaping industries? Check out our top articles:

• The Rise of Artificial Intelligence — A Content Marketing Perspective
• The Impact of AI-Generated Articles on the Future of Journalism
• The Ethics Of AI-Generated Content: A Discussion