When rich 17th Century patrons looked down the eyepiece of Antonie van Leeuwenhoek’s first working microscope they were astonished to see an entire new world of bugs and microbes; it had always existed under their noses but until that point had been undetectable by the human eye.
AI is proving to be the 21st Century equivalent; but instead of the physical world, it’s bringing into focus a virtual domain – the vast and expanding world of digital data which is available to anyone with the means to use it.
By exposing this data to machine learning and sophisticated AI algorithms, a whole new level of granularity can be revealed that allows greater real-time understanding of target audience behaviours, tastes and even emotional states. AI is revolutionizing ad targeting.
The importance of accurately targeted marketing
Targeted marketing means aiming at what you want to hit, rather than using a “blindfold and shotgun” approach, hoping you hit something. As Mailchimp puts it in its current advertising, targeted marketing turns “clustermers into customers”.
Put simply, targeting is about identifying and reaching out to a specific group of individuals with a need that you can satisfy.
Human needs are usually quite idiosyncratic – we all want different things. Markets are made up of maybe millions of individuals, so the more granular the picture of a desired audience, the more personalized ads can be made. When the right words and images reach the right person at the right time, conversion rates go up and ROI on advertising increases.
As is the case for most new technologies, AI is trickling down from tech giants and government bodies so that SMEs, possibly including your competitors, now have the means to improve their online ad targeting.
How does artificial intelligence work?
AI is a programming technology that enables a machine to perform tasks normally requiring human intelligence: recognising and responding to patterns; solving problems; selecting options (ie decision-making); and interacting with human beings at our own level. This is a generational leap from number-crunching computing.
We’re not likely to see full consciousness for a while as AI is based on algorithms, sets of mathematical, step-by-step instructions for completing a task. But they do allow a machine to improve its performance quickly via iterative repetition and with no need for human supervision. The more data it’s exposed to, the better AI can identify statistical trends and disregard outliers.
AI recently burst into public consciousness with ChatGPT after it was realized that language is also a massive data set with patterns and rules that can be “understood” and used by machine to interact with humans in real time.
AI in marketing
How long did it take for people to realise that website chatboxes didn’t have a call-centre operative at the other end? Automated chatboxes are just one manifestation of AI in marketing, improving customer experience.
However, advertisers are now using AI behind the scenes in the social media environment to improve ad targeting and make their campaigns more effective.
Segmenting audiences with social media ads
AI-based machines can analyse vast fields of the data being constantly generated by anyone who uses platforms such as Google, LinkedIn, Youtube or Facebook, as well as the billions of human interactions with smartphones, credit cards and computers that happen every hour of every day.
Human efforts at analysis have barely scraped the surface of this rich seam of consumer data due to our limitations in speed and accuracy compared to a machine.
Using this expanding historic data, marketers using AI can segment and profile audiences by preferred platform as well as by online habits, social interactions and the demographics relevant to their chosen platforms (eg job skills for LinkedIn, interests on Facebook, politics on Twitter), to identify potential consumers.
They can then tailor campaigns using their optimum platform, or mix of platforms – Google Ads, LinkedIn, Youtube etc to reach their targets in the most influential way. These ads will be personalized to the segmented audience, even to the individual, and placement will be optimized and integrated across social media platforms, building customer relations as well as brand loyalty and conversion rates.
Predicting the future
AI is capable of analysing masses of data separated by time and source that allows a system to make deductions leading to predictions of future behaviour.
For example, if you google makes of rum on a Monday and pictures of parrots on a Wednesday, linked to the upcoming birthday of a relative, a machine might deduce that you’re planning a pirate-themed party and use Google Ads to direct other suitable products towards you at the optimum time.
As for the future of AI itself, once invented, technology is here to stay. As advertising has become more online and automated, the use of AI in targeting consumers and generating ads will expand.
The key to effective ad targeting has always been consumer insight and new algorithms will offer ever deeper analysis of an expanding suite of characteristics. With the advent of facial recognition backed up by instant AI analytics, mood, wellbeing and emotional state gives AI another source of data on purchasing motivators which will make ads increasingly personal.
Ultimately, we could reach the state where marketing software knows what a consumer wants, even before they do.
However, revolutions are frightening and disruptive and AI raises many ethical questions for advertisers in the future. Are we being spied on? Are we being manipulated? Should a human be retained in the process to keep it ethical?AI