We live in a world that is becoming more personalized every day. Consumers have come to expect experiences that are tailored for them — especially when it comes to engaging with brands. When you open your Uber app, it now suggests your home address; online shopping is increasingly personalized, and, of course, so is advertising. You expect to see ads that reflect your interests and buying patterns and, in fact, are more likely to engage with those ads.We have artificial intelligence (AI) to thank for our increasingly personalized world. As the demand for personalization increases, so too does the buzz around AI.
First, let’s define it. AI is a term that is becoming ubiquitous — and potentially overused — as an umbrella term relating to any action a machine takes based on a set of rules in order to mimic human intelligence. This can be anything from the rudimentary applications, such as email filters, to complex uses, such as facial recognition or household robotics. AI can be defined as machines that mimic “cognitive” functions of humans, such as learning and problem-solving.
AI In Advertising
AI has come into the realm of advertising for a few simple reasons. First, the industry is ripe for data harvest, given the billions of ad impressions served across the world, creating a veritable gold mine of consumer behavior. Eyeballs are easier to find but harder to define, and sophisticated models are needed to pinpoint an audience through all the noise. Additionally, the investment dollars are there, with billions flowing to digital media: Salesforce reports that 51% of all marketers are using AI in some form and that current use, planned use and projected growth of use cases will more than double over the next two years.
It’s not just the machines that need to learn, either: 72% of digital agencies believe that data science and analysis will be the most-needed skill in the next two years. The incentives to have better algorithms than the competition are incredibly apparent (not to mention motivating): In the world of cost-per-click, improving an algorithm by just a few percentage points can bring a tremendous amount of value due to the volume of inventory and impressions.