Hello, I am Kakeya, the representative of Scuti.
Our company provides services such as offshore development and lab-type development in Vietnam, specializing in generative AI, as well as generative AI consulting. Recently, we have been fortunate to receive numerous requests for system development integrated with generative AI.
Is your advertising management optimized? If you are not utilizing generative AI, you may be missing out on a significant opportunity. AI has the potential to dramatically improve advertising effectiveness by automating tasks such as creative generation, targeting, and budget allocation. In fact, large companies such as Meta and Coca-Cola have introduced AI, revolutionizing their advertising strategies. In this article, we will introduce specific cases of AI usage in the advertising industry and the results achieved through its implementation, while also explaining key points for effectively utilizing AI.
Innovations AI Brings to Advertising
AI is transforming advertising strategies
AI is revolutionizing traditional advertising norms and evolving how companies connect with their customers. By analyzing vast amounts of data—including not only basic demographic information like age, gender, and location but also web browsing history, purchase history, and social media activity—AI allows companies to understand and predict consumer behavior patterns and preferences more deeply.
Advertising is shifting from a one-way mass marketing approach to personalized One-to-One marketing tailored to each customer. By offering advertising experiences optimized for each customer’s needs and circumstances, companies can increase customer engagement, foster long-term relationships, and enhance brand loyalty.
Benefits of Utilizing AI
By utilizing AI, advertisers can enjoy many benefits that were not achievable with traditional advertising methods. First, AI’s data analysis capabilities drastically improve targeting accuracy. AI can process vast amounts of data that were difficult to analyze using conventional methods, quickly and accurately, enabling much more precise targeting than before. For example, AI can analyze customers’ past purchase histories, website browsing activities, and behavior on social media to predict which products they are interested in and which ad messages they are more likely to respond to.
Moreover, AI contributes to maximizing advertising effectiveness. AI-powered ad delivery platforms offer features that measure ad performance in real-time and automatically adjust budget allocations and bidding amounts. This enables optimal ad delivery that adapts to changing circumstances. As a result, advertisers can make the most of their limited budgets and achieve maximum results.
Additionally, AI significantly enhances the efficiency of creative production. By learning from past advertising data and customer data, AI can automatically generate effective ad copies and banner images. It also has functions that automate A/B testing and select the best creatives from a large pool. By utilizing AI, advertisers can create effective ad creatives while greatly reducing the time and effort involved.
Case Studies of AI in Advertising
1. HOLT CAT Accelerates Talent Acquisition
HOLT CAT, a heavy equipment company in the U.S., successfully resolved its growing workforce shortage by implementing the AI-powered ad platform “AiAdvertising.” The company faced challenges with traditional recruitment ads, such as a limited applicant pool and high recruitment costs.
By adopting the AI-driven ad platform “AiAdvertising,” HOLT CAT was able to deliver optimized ad messages based on employee data and AI analysis results. This allowed the company to reach a larger pool of potential applicants that traditional recruitment ads could not reach. As a result, they achieved both an increase in applicants and a reduction in recruitment costs, marking a significant success.
2. RedBalloon Reduces Customer Acquisition Cost
Australia’s gift sales site “RedBalloon” significantly improved its advertising cost-effectiveness by implementing the AI advertising tool “Albert.” Albert integrates with advertising platforms like Google Ads to automatically generate and test over 6,500 ad variations. Based on the results, it adjusts targeting and budget allocation in real time to maximize advertising cost-effectiveness.
By introducing Albert, RedBalloon succeeded in greatly reducing customer acquisition costs, contributing significantly to increased sales. This success story demonstrates that AI is an extremely effective tool for streamlining ad operations and maximizing cost-effectiveness.
3. Vanguard Increases Conversion Rate of Ads
Vanguard, one of the largest investment companies in the world, strengthened customer engagement and accelerated business growth by promoting personalized advertising using the AI language platform “Persado.”
Persado is a platform that uses vast marketing data and natural language processing technology to automatically generate ad copy with optimal expressions that appeal to the emotions of the target audience. By introducing Persado, Vanguard efficiently created ad copy aligned with its brand image, resulting in improved customer engagement and a 15% increase in ad conversion rate.
AI Utilization in Meta’s Advertising Business
Meta’s Struggles Due to Third-Party Cookie Regulation
Meta, which operates Facebook and Instagram, suffered a major blow to its advertising business in 2022 when third-party cookie regulations were strengthened from a privacy protection standpoint. Third-party cookies are technologies that track users’ website visit histories and allow ads to be delivered based on their interests. Meta had long grown its advertising business through targeting methods using third-party cookies, but with the tightening of regulations, these traditional targeting methods became difficult to implement, leading to a decline in ad revenue.
Strengthening Advertising Business with AI
To overcome the challenges posed by the third-party cookie regulations, Meta turned to AI-powered advertising tools. This led to the development of “Meta Advantage+.” Meta Advantage+ is a tool that leverages AI and machine learning to automate ad delivery, achieving higher targeting accuracy and improved ad effectiveness than before. Meta Advantage+ is designed to solve various challenges faced by advertisers, offering functions such as improved operational efficiency through automated ad delivery, maximized ad effectiveness through detailed targeting, and AI-powered creative generation and A/B testing.
Main Features of Meta Advantage+
Meta Advantage+ offers four main features. First, “Advantage+ Placement” is a function where AI automatically determines the optimal ad placement. By analyzing vast amounts of data, AI automatically selects and distributes ads in positions that best match the user’s attributes, interests, and behavior history, maximizing advertising effectiveness.
Next is “Advantage+ Detailed Targeting,” a feature that allows advertisers to reach potential customer segments that traditional targeting methods couldn’t reach. AI automatically extracts users with characteristics similar to the advertiser’s desired target audience from the massive user data on Facebook and Instagram, enabling more precise ad delivery. This allows advertisers to conduct highly accurate targeting and improve advertising effectiveness.
The third feature is “Advantage+ Shopping Campaign.” This is designed for e-commerce businesses, automatically delivering ads based on product catalogs and user interests. By analyzing users’ past purchase histories and browsing activities, AI automatically displays the most suitable product ads, allowing advertisers to reach users with high purchasing intent. As a result, advertisers can acquire customers more efficiently and increase sales.
Finally, “Advantage+ App Campaign” is a feature aimed at app developers. It automatically delivers ads to promote app installs and increase in-app events. By analyzing users’ attributes, interests, and behavior history, AI delivers ads at the optimal time, efficiently promoting app installs and usage. This feature helps advertisers make their apps more known to a wider audience and boost downloads.
Results of Implementing Meta Advantage+
By implementing Meta Advantage+, Meta was able to minimize the impact of third-party cookie regulations on its advertising business and, in fact, improve its advertising performance compared to before. The company saw increases in user numbers, video viewing time, and advertising revenue, demonstrating the success of AI-powered advertising. Compared to traditional advertising methods, AI-powered ad delivery not only achieves better results but also significantly improves operational efficiency, and it is expected that many companies will continue to adopt it in the future.
Key Points for Utilizing AI Advertising Tools
Avoid Over-reliance
AI-powered advertising tools are extremely powerful and can significantly improve ad operations and maximize advertising effectiveness. However, AI is just a tool, and overestimating its capabilities can be dangerous. The results produced by AI are not always optimal, and there is a possibility that ads inconsistent with the brand image might be delivered. It is important to maintain a stance where human checks and adjustments are always made, and the final decisions are left to humans.
Gradual Implementation
AI advertising tools come with numerous features, and trying to master all of them from the start can complicate operations and potentially lead to inefficiencies. It’s important to begin by using the basic features and gradually becoming familiar with them to maximize the effectiveness of the tools. Additionally, it’s essential to select the tool that best fits your company’s challenges and objectives before implementation.
Consideration for Privacy
Since AI uses large amounts of data for learning, it’s crucial to handle data with great care, particularly from the perspective of personal information protection. When using AI advertising tools, it is essential to comply with personal information protection laws and related regulations and to configure the settings appropriately so as not to infringe on user privacy.
The Role of Humans
As AI technology evolves, many tasks in ad operations are becoming automated, but that doesn’t mean the role of humans is disappearing. In fact, the role of humans is becoming more critical than ever for effectively utilizing AI. Humans are needed to analyze the results produced by AI, consider the next actions, and conduct final checks on ad content from an ethical perspective that AI cannot judge. In many cases, human wisdom and experience are indispensable.
Latest AI Advertising Tools
As AI technology continues to advance, many AI advertising tools have emerged to streamline ad operations and maximize effectiveness. Here are some recommended tools:
1. [Persado] AI Copywriting Tool That Moves Hearts with Words
Persado is a platform that uses AI to automatically generate ad copy and marketing messages. By leveraging vast marketing data from around the world and natural language processing technology, it generates ad copy with expressions that appeal to the emotions of target audiences. It also offers robust A/B testing features, allowing efficient evaluation of ad effectiveness.
2. [Emotiva] Visualizing Ad Effectiveness Through Facial Expression Analysis
Emotiva is a tool that uses AI-driven facial expression analysis technology to measure users’ emotions in real time while they view ads. By analyzing users’ unconscious reactions, which traditional surveys cannot capture, it enables more accurate ad effectiveness measurement.
3. [Pathmatics] Revise Your Strategy Through Competitor Analysis
Pathmatics is a tool that analyzes competitors’ advertising strategies. It uses AI to collect and analyze data on competitors’ ad placements and creatives, offering insights that can help improve your own ad strategy. For example, it can analyze which ad platforms competitors are using, what target audiences they are reaching, and what types of creatives they are employing.
4. [Omneky] Generating Ad Creatives for Multiple Platforms
Omneky is a tool that uses AI to automatically generate ad creatives for various platforms, such as Facebook, Instagram, and TikTok. It can produce a large volume of creatives in a short time, making A/B testing more efficient and maximizing ad effectiveness.
5. [Celtra] Optimizing Ad Creatives for Better Performance
Celtra is a tool that uses AI to optimize ad creatives. It automatically generates creatives in the optimal sizes, formats, and designs based on the platform, device, and target audience.
Creating the Future of Advertising with AI
AI is revolutionizing the advertising industry and transforming how companies connect with their customers. By utilizing AI, companies can expect improvements in targeting accuracy, ad effectiveness, creative production efficiency, and consumer engagement. However, AI is merely a tool, and for it to realize its full potential, proper human operation and management are essential. By staying informed about AI advancements and actively adopting them, the possibilities for advertising will continue to expand indefinitely.