The question on everyone’s lips seems to be about how is AI transforming digital advertising.
Businesses face a new reality where AI redefines engagement strategies, setting a new benchmark for personalized marketing.
The Magna Media Trials study from July 2023 uncovered new benefits of pre-bid optimization for advertisers, evidencing an 18% reduction in cost per mille (CPM) for display ads – a clear win for advertisers aiming for efficiency.
Cathy Bergstrom, Head of Product at growth marketing platform AdRoll, tells us more about the integration, main benefits, and best use-case of AI in advertising.
Who Is Cathy Bergstrom?
Cathy is the Head of Product at AdRoll, where she leads product strategy, innovation, and growth, pushing the platform into a unique martech+adtech solution for DTC brands. With 20 years of experience, Cathy has a background in product and leadership across eCommerce, management & operations, as well as UI/UX.
Embracing AI empowers marketers with rapid, high-quality content creation and campaign execution, alongside perks like content optimization, enhanced creativity, and cost-effective production.
However, this technology doesn't come without flaws:
- It's struggling to maintain coherence
- Generating human-like language is still an issue
- Comprehending context is a hit-and-miss
As Cathy tells DesignRush: "When it comes to using generative AI in content production, I lean on the advice from my junior high math teacher – the calculator is never wrong, but your inputs might be, so check your work."
Main Benefits of Incorporating AI in Advertising
Including AI in your digital advertising strategies is a great idea, according to our interviewee.
"AI can help marketers with contextual targeting, enabling brands to be showcased alongside content their target audience is interested in."
"AI contributes to retargeting and brand awareness through demographic and interest targeting methods. It utilizes demographic details about a brand’s ideal customer, such as age, gender, and interests, to find new audiences with similar characteristics."
"AI can also assist with lookalike targeting."
But what exactly does this process look like?
"We leverage pixel data and audience segments from brands’ websites to pinpoint their most engaged shoppers and match them to our extensive data co-op consisting of 1.2 billion digital profiles," Cathy says.
"This helps us identify audiences that closely resemble a brand’s target audience across various web and social platforms, attracting high-quality new customers to their site."
The Evolution of AI Goes Into 3 Key Directions
The evolution of AI is steering marketing automation toward several different paths:
- Content creation & chatbots
- Predictive analytics
- Hyper-personalization
"By applying advanced algorithms to large amounts of data on previous consumer behavior, we can anticipate how customers respond to different actions," Cathy explains.
"Predictive analytics can help with lead & customer segmentation and scoring by determining where each lead is within the buying funnel."
"Accurate long-term sales projections can be aided by predictive analytics, which can calculate the proportion of those most likely to abandon the sales funnel or cancel subscriptions."
Retail companies are now using AI-driven brand awareness strategies by using data to better understand their customers.
For example, Nike has employed AI technology to scan customers’ feet within their app since 2019, providing personalized shoe recommendations based on the scan results.
Nike also used AI to create an ad campaign featuring Serena Williams in 2022, generating a younger version of herself throughout the commercial to emotionally resonate with the audience.
AI's Expansion into Advertising Comes with Challenges
Cathy highlights two things that advertisers must keep in mind while utilizing AI:
- Human-centric approach
- Stringent data privacy
"AI needs further development to foster the emotional intelligence and personal touch that human marketers have within themselves. This is crucial because emotion resonates most effectively with customers; it’s normal for humans to seek connection. I predict it will become more sophisticated in understanding and responding to human emotions over time, resulting in more empathy," Cathy notes.
"AI encounters the second challenge when it comes to data privacy. AI collects and processes extensive user data, creating the possibility of misuse of personal information, which remains an area where it still falls short. I expect increased regulations and advancements in privacy-forward technologies to address rising concerns and protect user data in the future."
Concluding our conversation, Cathy told DesignRush what tech breakthrough she hopes for the most in the upcoming years.
"I would like to see more usage of augmented reality (AR) in marketing because it holds the potential to change how brands interact with customers."
"Imagine a scenario where users can see virtual product placements or try out products virtually in their environment through AR-powered ads."
"By incorporating AR, marketers can craft more customized and immersive experiences that deeply resonate with customers, thereby boosting brand recognition and loyalty," she concludes.
Indeed, AR technology holds tremendous promise for transforming retargeting and brand awareness campaigns by offering immersive, interactive, and highly personalized advertising experiences that will captivate audiences in entirely new ways.
If you want to step up your marketing efforts in 2025, consider partnering with a top digital marketing agency that you can find in our agency directory.
