In today's competitive online landscape, personalization is key to standing out and connecting with your target audience. Generic, untargeted ads simply won't cut it anymore. That's where Artificial Intelligence (AI) comes into play.
By using AI, you can create personalized, targeted ads that resonate with your audience and drive better results. In this article, we'll explore 12 strategies to help you personalize and optimize your advertising efforts using AI.
- Using AI to create highly personalized and targeted ads is the way of the advertising future.
- By creating AI-powered ads, you’ll be able to increase your performance, revenue, and new customer acquisition.
- When creating an AI advertising strategy, you should implement AI that aligns with your goals and makes the process easier.
Creating an AI Marketing Strategy
By implementing AI targeting systems and tools, you'll gain valuable customer insights to inform your campaigns and optimize their performance. To start, let's dive into the process of developing a comprehensive AI marketing strategy. We'll guide you through defining:
- Your goals
- Target audience
- Messaging
- Budget
When developing an AI marketing strategy, it’s important to consider how the technology will improve your business. There are several ways AI can help you create personalized ads:
- Boosting ad performance by delivering highly relevant ads that resonate with customers
- Generating more revenue from existing customers by engaging them more frequently and effectively
- Increasing acquisition rates by targeting new audiences based on what they like, where they live
How do Personalized Ads work?
In the digital world, targeted advertising is the key to reaching the right audience and driving conversions. To effectively personalize your ads, it's important to understand the mechanics behind them.
Customer data plays a crucial role in tailoring ad experiences. By utilizing customer data, such as browsing behavior and purchase history, you can create ads that speak directly to your audience's interests and needs.
Once you've identified your target audience and created a personalized ad experience, you can start reaching out to them. For example, if you know that a user is interested in basketball shoes and is shopping for new ones, then they are more likely to take advantage of your discount code or special offer.
AI targeting can automate these processes, enabling you to target specific customer segments, deliver personalized ads, and continuously optimize your campaigns for better results.
The result? Increased conversions, higher return on ad spend, and more efficient advertising efforts.
12 Strategies for AI Targeted Advertising
Each strategy below focuses on a specific aspect of ad personalization. We'll guide you through the benefits and steps for each strategy, ensuring that you can maximize your ad personalization efforts with AI.
1. Customer Segmentation
Use AI to segment your customer base into groups, enabling you to target each segment with personalized ads for maximum impact.
Understanding your target audience and segmenting them based on their characteristics and preferences is crucial for effective targeted advertising. AI can help you segment your customer base by analyzing data such as:
- Demographics
- Purchase history
- Browsing behavior
- What kind of device they’re using
- Geographic location
You can then further segment these groups based on how likely they are to make a purchase or what value potential they have. Using AI for this task will save you time and budget, while also providing more accurate segmentation than doing it manually.
HubSpot has released an AI tool called ChatSpot which can help you segment your customers, and is free for anyone to use.
By using AI-powered customer segmentation tools, you can create highly targeted ad campaigns for each customer segment, delivering personalized messages and offers that resonate with their needs and interests.
2. Optimize for the buyer and customer journey
In order for AI to be an effective part of your strategy, it should stay in-line with tried and true marketing principles. Your targeted AI ads can move buyers through the purchasing funnel in a natural way when set up correctly.
Image courtesy of Hubspot
Build advertising sequences that follow each stage of the buyer’s journey.
Awareness
The buyer realizes a need or problem they have and begins to research and gather information. Create ads tailored to this stage by showing up for these types of searches.
Consideration
The buyer has defined their problem and is now looking for possible solutions or products. They are evaluating different options, comparing features, pricing, and reviews. For ads targeting this stage, you should focus on how your product will help solve the buyer’s problem.
Decision
The buyer is ready to make a purchase and chooses a specific product or service. They have done their research, compared options, and are now deciding which option is the best fit for them.
3. Retargeting
Retargeting is a powerful tool that allows you to reach customers after they’ve left your website or interacted with you in some way. It makes it easy for people who’ve already shown interest in your product or service to come back and convert into paying customers.
AI retargeting gives you the ability to build and maintain a more targeted audience by analyzing user behavior, browsing history, and other data points. This allows you to deliver personalized ads that are most likely to convert. It’s important that this is done in a way that aligns with your brand and doesn’t come off as spammy or invasive.
In a real life example, Carrefour Taiwan used Appier’s AI retargeting solution to increase its website conversion rate by 20%. One of the tactics used was strategically offering coupons based on what the user was looking for previously, moving them from the consideration to the buyer stage.
You can take advantage of AI’s machine learning and ability to process large amounts of data to send perfectly-timed emails, paid ads, and coupons to shoppers who have shown interest in your products.
4. Email Marketing
To make your paid campaigns successful, you need to create compelling copy that grabs the reader's attention. You can use your email campaigns to gather information about what content resonates with your audience and what doesn’t.
Use AI to analyze open rates and clicks within your emails to get data on what phrasing, content, or images generates the most actions. You can then use this information to create ad copy and visuals for paid ads. You can even conduct A/B testing to get as specific as possible.
SendGrid uses AI to provide you with detailed analytics from your email campaigns.
By using AI-driven insights like these, you can optimize your advertising efforts by improving click-through rates and ultimately increasing conversions.
5. Social listening
Use AI to track mentions of your company and industry on social media and other online platforms. This strategy is similar to reading reviews to gain a better sense of how customers actually talk about your company and your competitors.
Difference between social listening and social monitoring
Social listening differs from social monitoring in that with monitoring you are only tracking specific mentions of your company with the goal of responding to them. With social listening, you are getting the big picture of how people are talking about your brand in addition to the industry as a whole, specific product categories, and even what audiences you want to target. You then have the goal of using this information to make long-term plans for your company.
How to use the data gained from social listening
The data you get from social listening will give you valuable insights into how users are connecting with your product. It will also let you know where they’re talking about you.
Another benefit of this strategy is having a real idea of how consumers perceive your brand. If you’re wanting to target younger audiences like Gen Z for example, then this can be especially useful as they tend to prefer brands that are “self-aware” and authentic. You can use the information you find to your advantage with your advertising campaigns.
You can also use social listening to find influencers who already align with your brand and create campaigns that are personalized for their followers.
Tools like AI social listening by Brand24 allow you to track mentions of your brand all across the internet.
6. Predictive Analytics
Use predictive analytics to forecast customer behavior and create AI-powered ads based on these insights.
The ability to predict customer behavior and preferences is invaluable when it comes to targeted advertising. AI predictive analytics can analyze vast amounts of data, such as past purchase behavior, browsing history, and demographic information, to forecast future customer actions.
By using these insights, you can personalize your targeted online ads to align with customer preferences, increasing the chances of engagement and conversion.
You can use Google Analytics predictive metrics to combine your data with Google’s machine learning to optimize the personalization of your targeted ads. The three metrics you can track are:
- Purchase probability
- Churn probability
- Predicted revenue
The data from these metrics will then allow you to create predictive audiences that can be used across all of your products, for remarketing, and to re-engage users.
Some examples of audiences you can build using predictive analytics are:
- Customers likely to churn soon
- Customers who are likely to make a purchase soon
- Users who are likely to become first-time buyers soon
- Users who are likely to spend the most money
You can then take these groups and personalize the ads you show to them based on what actions they’re most likely to take next.
Combining generative AI with predictive analytics
Predictive analytics can help you make advertising decisions like which products should be advertised to which users. Combining these products with ad copy and images made with generative AI can create an opportunity to serve hyper-personalized ads.
7. AI-Powered Website Tailoring
Your website is the face of your brand, and personalizing it can have a significant impact on user experience and conversions.
AI website tailoring tools can analyze user behavior, preferences, and past interactions to dynamically personalize your homepages and landing pages.
Benefits of using AI to tailor your website include:
- Presenting visitors with relevant products, offers, and recommendations
- Increase engagement
- Reducing bounce rates
- Drive more conversions
It would be impossible to manually tailor your website’s content for each visitor, but with generative AI you can. Generative AI allows you to give prompts to AI systems and then it creates images or copy for you, saving you time.
Omnichannel presence
You’ll also be able to create a cohesive omnichannel experience for your customers and prospects, from the ads they see all the way to the content and language they find on your website. This can send a consistent message to the shopper and solidify your brand in their mind, leading to conversions.
8. Leveraging Google's AI for paid ads
Explore the dynamic ads and new AI features offered by Google to personalize your targeted ads and increase their effectiveness.
Google has been at the forefront of AI innovation, and their tools and features can supercharge your targeted advertising efforts. Dynamic Ads, powered by Google's AI, automatically generate personalized ads based on user behavior and preferences.
Additionally, Google's AI features can optimize bidding strategies and provide actionable insights to improve your advertising performance.
PMax Campaigns
Google launched PMax campaigns that advertises across all of Google’s networks. It utilizes machine learning with the goal of increasing advertiser’s presence and conversions. Smart Bidding is used and ads are shown in the format most likely to perform best for each placement.
With PMax campaigns, you're able to serve ads that are tailored to your audience’s search intent, increasing the chances of them making a conversion.
Product Studio
Google has a generative AI studio for product images called Product Studio. With it, you’re able to create fresh product images by removing and adding new backgrounds and improving the overall quality of your images.
This allows you to easily create custom images personalized to the tastes of your target audience.
Google Generative Experience
The Google Generative Experience provides an immersive search experience for users, similar to Bing’s AI-driven search results. It combines personalized answers to queries along with product suggestions that help with whatever the queriant is looking for.
Optimizing your ads for this new direction of internet searches will help your products stand out from your competitors. Let’s say someone is searching for a new town bike to buy. Google will provide bikes in their price range along with information like what to look out for when making a purchase.
Because of this, you can optimize your ads to speak to shoppers’ needs and desires in addition to providing the practical data about your products.
New AI video campaigns
Google has two new campaign types called Demand Gen and Video View. Because they are built on AI, they inherently create personalized ads for your audience.
Demand Gen will take your top performing content, allow you to customize the ad creatives, and then show it to new audiences who are similar to your existing ones. Video View will use a single campaign to show your ads on YouTube in all video formats (while users are streaming videos, in their video feeds, and in Shorts).
9. Leveraging Meta's AI for personalized ads
Meta, parent company of Facebook and Instagram, offers a wide range of AI-powered advertising tools that can help you personalize your ads and reach the right audience. They are continuing to innovate and offer more AI tools to their users.
Use the following Meta features to create highly personalized and targeted ads.
Automated Ads
These ads streamline the ad creation process. You’ll tell Meta what the goals are for your advertising campaigns, and it will offer personalized ads to help you reach those goals.
Here are some of the questions you will answer:
- Do you have a website?
- Do people buy products on your website?
- Do you get leads through your website?
- Where is your audience located?
- What are some topics your audience might like?
The more you use Automated Ads, the more it learns what is most likely to work for you, and will provide you with additional improvements to your ads along with suggestions.
You’ll also be able to:
- Generate up to 6 ad versions and then Meta will show you the best performing one over time.
- Get audience suggestions that are tailored to you and become more and more specific.
- Get budget recommendations that are most likely to bring you the best results.
- Receive real time updates about how your ads are doing and what changes you can make to bring more success.
Audience network
Extends your reach across various platforms. According to a study done by Meta, people were 8 times more likely to make a conversion if they saw ads across Facebook, Instagram, and Audience Network, rather than just seeing the ads on Facebook.
You can use Audience Network targeting to reach goals like increasing traffic and conversions through image, video, and carousel ads.
Lookalike audiences
Lookalike audiences is a machine learning tool that discovers new customers who share similarities with your existing ones.
AI Sandbox
As Meta continues to develop their AI offerings, more tools are becoming available:
- Background Generation: Creates background images from text inputs, enabling advertisers to quickly try various backgrounds and diversify creative assets.
- Image Outcropping: Adjusts creative assets to fit different aspect ratios across multiple surfaces (Stories, Reels), reducing the need for repurposing assets.
- Text Variation: Generates multiple versions of text to highlight important points in advertiser's copy, allowing for different messages for specific audiences.
10. Implement dynamic pricing
Dynamic pricing is a strategy that allows businesses to adjust prices based on market demand and other variables. When combined with artificial intelligence, dynamic pricing can be used to personalize online ads.
Where can you use dynamic pricing?
You can use dynamic pricing anywhere you advertise, like on Google networks, Facebook, and Instagram. Just make sure that the ads you’re showing match the prices on your website.
This means you’ll need an easy way of updating your product feeds to avoid errors. For example with Google ads, if your landing page prices don’t match your advertised prices then your product will get disapproved.
How does dynamic pricing with AI work?
By analyzing consumer behavior and purchase history, AI algorithms can suggest dynamic prices unique to each consumer, creating personalized deals and offers.
Dynamic pricing and personalized ads can be used together to create a more personalized experience for consumers. For example, a dynamic pricing algorithm could offer a promotion or discount on a product the customer has previously shown interest in. A corresponding personalized ad could be displayed to the customer promoting the same product or related products.
However, marketers must use dynamic pricing with transparency, ensuring they don't dominate customer trust by continuously fluctuating prices.
11. Continuously Optimizing with AI
The world of advertising is constantly evolving, and it's crucial to continuously optimize your campaigns for maximum performance.
AI can automate the optimization process by analyzing vast amounts of data, monitoring campaign performance, and making real-time adjustments to create more personalized experiences for consumers.
AI targeting systems can use real-time data to recommend products that consumers’ browsing and purchase history indicates they may be interested in. This can create a personalized and relevant ad experience that resonates with individual consumers, leading to higher engagement rates and conversions
For example, high fashion retailer LUISAVIAROMA (LVR) used AI recommendation system Dynamic Yield to increase their ARPU by 15% by adding personalized recommendations to the check-out page.
12. Avoiding Biased Data
Discover how to listen to your customers and avoid biased data when utilizing AI for personalized advertising.
While AI can provide valuable insights and automate processes, it's essential to remain aware of potential biases in the data and algorithms. Biased data can lead to unfair targeting and ineffective ad campaigns. By listening to customer feedback and remaining vigilant, you can avoid biases and ensure that your AI-driven advertising efforts are fair and effective.
Bias in AI systems is a growing concern because the algorithms used to train AI can reflect or even reinforce existing biases. To avoid bias in your AI-generated ads, you need to understand how your data is being used and what it may be failing to include. In other words, you need to know what your data is leaving out — or even worse, what it's including.
Best practices for creating personalized targeted ads with AI
-
Follow data privacy guidelines
Comply with privacy regulations, such as obtaining proper consent and protecting user data. Be transparent with users about how their data is being used and give them control over their privacy preferences. -
Define clear goals and campaign objectives
Before utilizing AI to optimize your ad campaigns, it is crucial to define your goals. This will help you choose the right AI tools and algorithms to achieve the desired outcomes. -
Use quality data
The success of any AI ad optimization strategy heavily relies on the quality of data used. Ensure that your data is clean, organized, and accurate to effectively use AI for personalized targeting. -
Segment your audience
AI can help you analyze large sets of data to identify different audience segments and their preferences. By understanding the different customer segments, you can create personalized ads that are highly relevant to each target group. -
Keep testing your ads and AI marketing strategy
With AI, you have the ability to test different variations of ads and analyze their performance in real-time. Continuously monitor the results and use AI algorithms to optimize ad elements such as copy, visuals, and calls to action to maximize effectiveness.
Conclusion
Personalization in AI targeted advertising is the secret ingredient to success. By using AI to your advantage, you can take your targeted advertising efforts to new heights. Use the 11 strategies outlined in this article to personalize your ads, capture your audience's attention, and drive superior results.
Don't miss out on the opportunity to optimize your campaigns with AI. Implement these strategies today and start reaping the benefits of personalized targeted ads. Wan to learn more about using AI in the digital advertising world? Check out our article All-in-one Guide to Using AI in Digital Marketing next.
