Artificial Intelligence and Digital Advertising

Artificial Intelligence and Digital Advertising


The primary goal of every advertiser is to get more returns on ad spend by maximizing the value they get from every dollar amount.

Achieving this goal can be difficult in many cases. It requires targeting the right audience, creating the right (relevant) ads, and continuously conducting tests to improve performance.

The more data marketers have, the higher the prospects of improving returns on ad spend. With adequate and relevant data, they can target the right audience, allocate budget more efficiently, and optimize their campaigns.

It takes a tedious, time consuming, and costly process to analyze these data and learn from them.

However, with AI, marketers can get access to a larger pool of data and data analytics. AI provides rich data, analyzes the data, and offers insights that marketers can use. In some cases, AI can even execute the changes that the data requires.

AI and Ad Targeting

AI is influencing digital advertising in two ways – through the tools available on the digital ad platforms (Google, Facebook, etc.) and third-party platforms (see below)

If you speak to many marketers, a significant percentage of them will tell you that targeting the right audience is an essential part of the advertising process.

You can create the best ad copy in the world, but if you send it to the wrong audience, it will underperform. The task of every marketer is to create the right ads for the right audience.

AI can help marketers segment their audience. AI pulls relevant data about your target customers and segments them based on certain relevant factors. AI will help you analyze data from these various segments to identify the segment that will interact best with a particular ad campaign. Instead of guesswork, AI gives you data-driven insights to choose the right audience for your campaigns.

Similarly, AI can help you identify new audiences. It can do this by creating audiences that are similar to the ones that are currently performing well. It can also do this by identifying customer segments outside of your current target that will interact well with your ads based on their past behaviors.

Ad platforms like Facebook and Google use AI to deliver ads to the audience that will most likely interact with your ad campaigns.  By using AI to analyze data from their database, they can offer very useful targeting ideas.

Targeting the right audience is the first step in highly efficient ad campaigns. By selecting the right audience, creating audiences similar to the best performing ones, and exploring audiences beyond your current purview, AI can help marketers achieve great results with targeting.

digital advertising

AI and Ad Optimization

Every marketer knows you do not create an ad and go away. There is a need to monitor them and identify opportunities for optimization. Optimizing an ad involves reallocating the ad budget to the appropriate audience (based on performance), spending the right amount, achieving higher relevancy score, attaining a good balance between ad spend on different platforms (investing more money in the better performing platforms – Facebook or Google, LinkedIn or Quora).

There are AI-powered tools that will help you identify opportunities for optimization. By analyzing critical success factors, they can help you understand the problems with your ads and suggest opportunities for improvement. They help you manage ad performance and ad spend in a way that best achieves your goals. Ad platforms also have an AI-empowered feature that offers budgeting and ad spend suggestions as well as placing your ads on the platform where they have a higher chance of success.

Some of these tools can also automate ad optimization strategies. In that case, rather than suggest improvements, the tool executes the improvements.


AI and Ad Creation

AI’s impact on digital advertising is now going beyond optimization to creation. We already saw in this series how AI tools could create ad copy. However, they can do more than creating ad copy.

AI tools can create an entire ad by analyzing data from your CRM systems and marketing software to identify the kind of ad that will help you accomplish some desired ends. Some of the ad platforms will suggest ads you should run based on some links you are sharing.

Image recognition is another AI-empowered innovation where you can create an ad that shows up whenever people view a particular image online. If you sell snickers, for example, you can create ads that automatically shows up when someone sees an image of snicker online.

digital advertising

AI and Ad Testing

A/B testing takes time and effort, but it is necessary to get the best results from digital advertising.

AI tools make this process easy for marketers. Humans can only comb through as much data, but AI can analyze millions of datasets in no time, thereby providing insights that are important to the optimization process.

Some Helpful Tools

Here are some of the third-party AI tools that can help upscale your digital advertising.

Adext uses AI to optimize the performance of digital ads. It tests different audiences to identify the ones that will respond positively to your message. It also streamlines and adjusts your ad budget every hour as data pours in from your campaign platforms.

Albert plugs into a marketer’s existing tech stack to process and analyze data and, consequently, allocate, optimize, and evolve your digital ad campaigns. Albert works autonomously – it takes an ‘always-on-approach.’ It identifies opportunities for performance optimization and offers insights to the marketer.

IBM Watson provides AI-empowered tools that can help create ads or optimize them for better performance. They provide tools for a company’s entire marketing strategy.

Phrasee uses AI-powered algorithms to generate the best subject lines, contents, and CTAs. It uses machine learning to determine the messages to which an audience will respond. It is a useful tool for creating ad copy.

Wordstream is a cross-platform tool that helps marketers get better results from their Google Ads.

The platform uses AI to give you suggestions on how you can maximize conversions and minimize costs. Their demand-side platform also includes tools for optimizing TV campaigns.


Targeting, optimization, ad creation, and ad testing are four essential components of digital ads. AI is offering data-driven insights that can transform these four components and help marketers get a better return on their ad spend.

Check out any of the tools above and make maximum use of the AI-empowered features on your digital ad platforms.  If you have not been following this series of articles on AI and digital marketing, start here. Up next in the series, we consider how AI is transforming search.

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