Issue #37: AI for online advertising (strategy, tips, tech)

Good morning.

Everytime you turn around there’s another product that leverages AI.

A lot of it is pure hype.

(i.e. more AI writing tools built on top of ChatGPT without any real innovation).

As with any cutting-edge technology, there’s a gold rush, and AI is no different.

Just a bunch of here-today-gone-tomorrow startups leveraging someone else’s innovation to make the cash grab.

But there’s one area of marketing where I do believe AI technology has made (and will continue to make) a seismic shift—and its advertising.

This issue is dedicated to getting you up-to-speed, optimizing and maximizing your online advertising.

—Sam

IN TODAY’S ISSUE 👨‍🚀 

• AI has already changed online advertising.

• How AI can fix and improve ad and media buying.

• 3 ways AI improves your ads and strategy.

• The present & future of AI and advertising.

Let’s dive in.

How AI has already changed advertising

AI has fundamentally reshaped the way that we approach media buying and campaign optimization. 

Gone are the days where you dump millions of dollars in budget and then cross your fingers that your ad sticks. 

Today, if you don’t use the power of AI to target the right eyeballs, at the right moment, with the right hooks—then you’ve already fallen behind. 

Attention is our most precious commodity. AI helps media buyers become surgical in their targeting, relentless in their optimization, and more adaptive and prolific with their creative. 

We’re talking hyper-personalization at a granular level, dynamic ad creation that adapts to individual viewers, and optimization that never sleeps. 

It’s the inevitable destination that we’re hurtling towards, and the question isn’t IF we’ll get there – we’re there.  

Most of you already leverage AI in some way, whether you realize it or not. 

It’s already embedded into the MarTech and AdTech platforms you use daily. 

But here’s the catch: 

Success won’t come just because you use these powerful tools and platforms.

It will come from mastering them, using them to their full potential, and wielding them with your own unique blend of strategy, insight, and creativity.  

AI has already changed advertising, and what marketers can do to be successful in the age of media + AI. 

This transformation is driven by the interplay of three key factors: 

• The relentless march of digitization

• The ever-evolving needs and preferences of consumers

• The breakneck speed of new and emerging technologies 

Back in the day, a clever tagline and a catchy jingle were all you needed to make your mark. 

And, don’t get me wrong, I’ll wax-poetic about the Mad Men days of advertising with the best of them. 

There’s nostalgia drummed up in the heart of every marketer when they think of smoke-filled rooms of creatives hammering away until 3am to polish the perfect campaign. 

Only to emerge bleary-eyed and victorious with the perfect concept, hook, and tagline. 

And what to do with that brilliant creative for women’s pantyhose? 

Run it in a popular women’s magazine, do a couple TV spots during primetime, and put your shoulder behind that budget.

And boom, you’ve got a successful ad campaign. 

But those days are over. 

And as programmatic advertising increasingly becomes the standard, the playing field is a whole lot bigger, and the rules more complex. 

Today, we’re able to reach consumers across literally hundreds of platforms. 

And marketers must navigate a complex and ever-changing ecosystem of platforms, data points, and consumer behaviors that require constant adaptation and innovation. 

A point echoed by other marketers: 

You can read the full thread here. 

The biggest problem?

We’ve got more visibility into how our media performs than we’ve ever had before. 

But we (humans) are drowning in that sea of information. 

We’ve got all the information we could ever need to make really smart decisions. 

But, at scale, we are ill-equipped to manage these daily functions the way that AI can in a matter of seconds. 

As humans, we simply can’t analyze – and more importantly ACT – on all of the data available to us. 

It’s impossible for us to manage and test hundreds or even thousands of campaigns with dozens of variables to optimize ROAS. 

Not at the speed that AI can. 

We’re limited by the computational power of our own minds.

It’s too many optimizations, too much data, too fast – it’s mind numbing

As humans we can’t do this. It’s impossible. 

But AI can. 

AI never sleeps. 

Which means it's always running in the background – collecting, interpreting, and acting on data with maximum efficiency. 

AI-powered ad platforms give marketers the ability to deploy thousands of hyper-targeted ad variations to micro-segmented audiences, all in a matter of minutes.

Let’s take a deeper look. 

How AI can fix and improve media buying right now

For many years brands have grappled with increasing market pressure, shrinking budgets, and scattered audiences. 

Media buyers who resist the opportunity to innovate with AI are at a serious disadvantage compared to their peers. 

It’s like attempting to hit a bullseye while riding a unicycle blindfolded – you’re flying blind when everyone else has cracked the data wide open. 

And smart marketers agree:  

A lot of marketers have embraced AI already. And it’s not going to stop.

Take the folks over at Adsmurai for example: 

This is just one example of many ad agencies that have fully embraced AI. 

While their competition navel-gazes and pontificates about the “good ol’ days”, these marketers cement their position as those who will do well in the next few years. 

In the battle for market share in the advertising, there will be the haves and the have-nots. 

Here’s what the “haves” with AI will do much faster, and cheaper than the “have-nots”: 

• Make data-driven decisions with confidence.

• Optimize campaigns on the fly.

• Stretch budgets further.

• Reach the right audience across multiple segments and platforms.

• Boost ROAS at historically high rates.

It no longer makes sense to imagine advertising without AI—they are inextricably linked. 

And this is a good thing, for great marketers. 

Why? 

AI frees up time and resources for what really matters: the human creativity that turns campaigns into blockbusters. 

With AI handling the often monotonous heavy lifting, agencies can focus on what they do best – the big, conceptual ideas that win awards, make us laugh, and keep people talking about your ads for years to come. 

And, if industry bragging rights, or a shiny new Clio or Webby isn’t your bag, then AI in the very least can make your job exponentially easier. 

3 ways AI improves your ads and strategy

1. Ad Creation and Media Planning

In the past, creating effective ad materials and placing campaigns on the right media outlets was a challenge, due to limited and potentially inaccurate data. 

There was a lot of “let’s see if this works”. 

And if you wagered your ad spend and your hunch was wrong? 

Your entire budget was lost. 

So much for the golden age, eh? 

That’s not the case anymore with AI – especially with programmatic advertising. 

Here’s how: 

• AI tools can analyze vast amounts of data and provide a solid foundation for ad creation and media planning.

• Machine learning algos can identify patterns and trends that human analysts might miss, leading to more effective ad creating and placement strategies.

• Predictive analysis can help advertisers anticipate consumer behavior and optimize their campaigns accordingly. 

And perhaps the most beneficial use of AI in advertising right now: audience targeting and segmentation. 

Media planning is a complex beast that requires a deep understanding of audience context, cultural trends, and media cycles. 

But with AI we can trash the “best guess” approach. 

AI is always on, it’s always watching –  interpreting patterns, and manages real-time bidding and programmatic buys like a boss. 

It’s a 24/7 optimization machine that never takes a break. 

And as I said before, there are marketers out there that are already doing this: 

And speaking of success, you can use AI to help you figure out if your campaigns are even working in the first place. 

2. Performance Measurement

Measuring the effectiveness of any campaign is critical, but many marketers still rely on outdated metrics like click-through rates. 

Here’s where AI wins: 

I recommend giving the article a read, as it dives deep into ad performance metrics specifically. 

Not only can marketers gain better insight into how their campaigns perform, they can actually predict with relative accuracy how a campaign will do before they even run it. 

Thanks to predictive analytics—another wonder of AI. 

Predictive analytics is like having a crystal ball into your marketing campaigns. 

It’s a powerhouse combo of data, algorithms, and machine learning. 

It takes into account all of the details of your campaigns like audience behavior, market trends, and media costs. 

Predictive analytics can help: 

• Plan your campaign strategy based on data-drive insights

• Navigate shifts in consumer behavior and market conditions

• Reach your campaign goals faster and more efficiently

Pattern recognition, and the ability to make real-time optimizations based on data is really the X factor for AI. 

Let’s see how this plays out for testing. 

3. Fast, dynamic testing at scale

Perhaps one of the most exciting things AI brings to the table – and the thing that warms my copywriter heart – is the ability to create, test, and optimize your ad creative on the fly. 

And I’m not talking about minor tweaks here and there. 

I’m talking about game-changing, revenue-boosting optimizations that would take humans weeks, if not months, to accomplish. 

Let’s break it down. 

Optimizing creative: 

AI can generate hundreds of variations of your ads, tweaking everything from button colors to call to action text, imagery, and headlines. 

It can then analyze the performance of each variation and determine the winning combination that drives the most clicks and conversions. 

No more guesswork, just data-driven perfection. 

Optimizing distribution: 

AI doesn’t stop at ad creative. It can also test and refine your distribution variables like device type, ad placement, frequency, and more. 

This means your ads are always shown to the right people, at the right time, in the right place. 

Are you doing the math here on how long this kind of output would take for a human? 

I hope so. 

Optimizing conversion: 

Here’s where AI really flexes its muscles. It can adapt your creative and targeting based on specific contexts, all while maintaining personalization at scale. 

So if a purple “Learn More” button works best for media buyers reading a blog post, but CMOs on LinkedIn prefer a blue “Contact Us Now” button, AI can make those adjustments automatically. 

Are you paying attention?

This is the kind of stuff that conversion copywriters have spent their entire decades-long careers attempting to get right. 

The bottom line is this: AI is no longer a nice-to-have in advertising. 

It’s a necessity. 

And if you want to stay ahead of the curve you need to start harnessing its power now. 

Disregard this at your peril, because media buying is the one area where I truly believe that AI WILL take your job if you’re not paying attention. 

Let’s take a look at where the market is headed.

The present & future of AI and advertising

I’ve always been bullish on the outlook for the advertising landscape with AI. 

But I’ve also been vocal that the mediocre will simply not be able to compete. 

Mediocre writers, media buyers, designers, coders – your ability to DO the thing will no longer be your differentiator. 

AI can do all of it. 

Faster. 

Cheaper. 

Not too long ago, I wrote a couple of issues about predictions and trends in AI marketing. Here’s what I had to say about media: 

Here’s what a few others who aren’t me have to say about it: 

The Drum: 

Hearts-Science: 

This article from Campaign has an interesting outlook on AI’s place for CTV ads: 

Do I think that the outlook for middle-of-the-pack media buyers will shrink instantly? 

No. 

AI’s capabilities in digital advertising still require a great deal of human oversight to be implemented ethically and effectively. 

These solutions are not a silver bullet. 

Critics of AI AdTech platforms have raised several concerns. 

To name a few: 

• The “black box” problem: inner works of how these systems process data, generate predictions, and make decisions are still largely an anomaly – which creates transparency issues. 

• Training bias: AI tools are only as good as the training data they’re given. Biased on insufficient data can create a narrow, skewed view of an ad’s target audience. AI tools can also be trained to have inherent biases towards the agency or other third parties’ objectives. 

• Data privacy concerns: these tools collect and process large amounts of data, including personal information at times. Brands and agencies must ensure robust security measure to protect information. 

What does all of this mean for advertisers?

There’s a gap in the market right now. 

Which means you’ve got an excellent opportunity to capitalize on this technology’s relative shortcomings and grow your skill set alongside AI. 

If you’ve been phoning it in as a media buyer for some time now, it’s time to get a little cagey about your career outlook. 

It’s time to create your competitive edge. 

It’s time to use AI as part of a holistic approach—combine it with your own creativity, your own brand of mastery. 

And then layer it with other strategies, tests, and tools in your arsenal to mitigate risks and maximize rewards. 

Relentless curiosity, a commitment to great work, and the ability to think outside of the box. 

That is how you will win in the age of AI.

Talk again soon,
Sam Woods
The Editor