How AI is transforming the personalised ads industry

Artificial Intelligence (AI) has fundamentally changed the personalisation of paid ads. Gone are the days of traditional spray-and-pray advertising methods. Now, with AI, advertisers can deliver tailored content to individual users, boosting engagement and ultimately, conversion rates.

How does AI help make ads more personalised?

AI-driven personalisation in paid ads uses data analysis and machine learning to create targeted, relevant ads. Put simply, AI learns from user data and previous ad performance and then shows appropriate ad content to users.

When users see ads that feel personal to them, it makes it more likely for those users to take action. This improves the user experience, enhances ad performance for advertisers, and boosts overall customer satisfaction for advertising platforms. It’s a win-win-win.

OK, but how do AI personalised ads work, technically speaking?

Behind AI-personalisation lies a sophisticated web of technical mechanisms. The platforms where ads are delivered—Google, Meta, TikTok et al—typically have AI built into their systems. The in-built AI works to:

1. Get information: AI looks at what people do online - their web browsing, social media, shopping, and basic details. This helps the AI form a picture of what they like.
2. Make predictions: AI tries to guess what people might want next, so it can show them helpful ads.
3. Deliver custom ads: AI changes the pictures and messages in ads to match what people care about. It can even change these while ads are running.
4. Make smart buying decisions: AI quickly decides how much to spend on showing ads to different people, making sure money is spent wisely.

How do advertisers benefit from AI-personalised ads?

• Better reach: AI enables precise audience segmentation, allowing advertisers to reach users most likely to engage with their products or services.
• Optimised ad spend: By focusing on high-potential users, AI helps in allocating budgets more efficiently, reducing wastage on less relevant audiences.
• Improved performance metrics: Personalised ads often lead to higher click-through rates (CTR) and conversion rates, enhancing overall campaign effectiveness.

And users?

• Relevant content: Users see ads that relate to their personal interests, making ads more engaging and not as intrusive.
• A better experience: Personalised ads can give users info about products or services they’re genuinely interested in, which may help with decision-making processes.

So if I was interested in taking advantage, what can I do / how do I get started?

The exact approach you take will differ by platform. But here’s a general step-by-step guide to get you started using AI to personalise your ads:

1. Identify your objectives: As with all paid ads, start by defining what you aim to achieve. This might be increasing brand awareness, boosting sales, or expanding your customer base.

2. Choose the right platform:‍
Usually, you want to run ads wherever your ideal customer hangs out. Examples include:‍

• ‍Google Ads: Offers AI-driven tools for creating and managing ads across search and display networks.‍
• Meta Ads (Facebook and Instagram): Utilises AI to target ads based on user behaviour and interests.‍
• TikTok Ads: Provides AI-powered video creation tools for engaging content.
• Others, like LinkedIn, X, Pinterest, Reddit and Quora.

3. Define your target audience: Use the platform's AI capabilities to segment your audience based on demographics, interests, and behaviours.

4. Create personalised ad content: Develop ad creatives that resonate with your target audience. Use AI tools to generate compelling copy and visuals. For instance, platforms like Anyword offer AI-driven copywriting services.

5. Set your budget and bidding strategy: Determine your advertising budget and choose an appropriate bidding strategy. Built-in AI can help optimise bids to maximise return on investment.

6. Launch and monitor your campaign: Deploy your ads and continuously monitor their performance. Use the platform's analytics to assess metrics like click-through rates and conversions.

7. Optimise based on insights: Use integrated AI analytics to gain insights into campaign performance. Adjust your strategies accordingly to improve outcomes.

How does ad creation work with AI-personalised ads? How does the AI show different ad content to users?

There’s a common misconception that as an advertiser, you need to create loads of different ads for the AI to choose from in real time. But you don't need to manually create numerous ad variations for different audience segments.

Instead, you simply take advantage of Dynamic Creative Optimisation (DCO) technology that is built into major ad platforms and automates this process.

How DCO works:

1. Create ad components: You develop individual elements of your ad, like headlines, images, calls-to-action, and product descriptions. These components are stored separately.
2. Data analysis: The AI system analyses user data, including demographics, browsing behaviour, and past interactions, to understand individual preferences.
3. Real-time assembly: Based on the analysed data, the AI dynamically assembles the most relevant ad components in real time as the ad is served to each user. This ensures that the ad content is tailored to the specific interests and characteristics of the viewer.
4. Learning and iteration: The AI will learn what combinations work best for what segments or user types, and will continue to improve its delivery over time.

By leveraging DCO, you can deliver customised advertising experiences to your audience without the burden of creating multiple ad versions manually.

Wrapping it up

AI has made advertising better and easier than ever before. It's changing how ads work by making them more personal and effective. As AI gets better at this, ads are becoming more helpful for both businesses and the people who see them.

If you're a business owner thinking about using AI ads, start small. Pick one advertising platform and see how it works for you. Focus on making good ads, and let AI help you show them to the right people.

The bottom line is simple: good advertising today isn't just about making great ads - it's about using AI to show those ads to the right people at the right time. This is making advertising smarter, more personal, and more effective than ever.