AI-powered ad buying and planning are reshaping digital campaigns
By Ralph Tathagata
To automate nearly every step in digital advertising campaigns, and also help developers sell advertising more effectively to small and midsize businesses, tech giants have continued to launch new artificial intelligence-powered tools for advertisers. The new AI tools work by asking buyers for parameters for campaigns, such as budget limits and sales goals, then allow algorithms to decide where ads will run, who they target and, in some cases, how ads appear.
According to the developers, which include Google, Meta, TikTok, Amazon and Pinterest, the AI tools can make a campaign more efficient. However, buyers often can’t find out exactly what decisions the artificial intelligence implements, but they can essentially press a button for campaigns to run on their own.
Meta recently updated its artificial intelligence tools for advertisers, focusing heavily on AI products. Meanwhile, Meta’s Advantage+ places ads only within Meta apps such as Instagram and Facebook, while Google’s Performance Max campaigns run on Google properties and elsewhere.
According to Ben Hovaness, chief media officer at ad buying firm OMD, part of ad giant Omnicom Group, AI buying agents are going to be directing upwards of 80% of digital media buys by 2030.”
The media boss, however, noted that some OMD clients have shied away from AI buying altogether due to a lack of control over audiences and inventory. He stated that marketers considering AI-driven campaigns aren’t confident that ads for restricted products such as alcohol will appear only in appropriate places. “Other brands can’t accept not being able to select where their ads may run online,” he added.
While some advertisers now spend 20% to 30% of their Meta ad budget on AI tools, for many, however, the lack of control is worrisome.
For Nicole Fisch, senior vice president of marketing at baby products brand Lalo, which uses Google’s AI-fueled Performance Max campaigns to run ads online, “It’s almost like a necessary evil. You see the numbers and it does drive sales, but…at what cost?”
Reports from Google sometimes show higher returns for Performance Max campaigns than non-AI efforts. But Lalo’s team can’t tell if their ads reached the company’s core audience of design-focused parents, nor can they actively target specific websites and apps those people may frequently visit, according to Fisch.
For many years, marketers have responded to the proliferation of platforms and media formats by demanding greater control and transparency in allocating budgets. But the tech giants calling the shots in digital advertising are obviously headed in a different direction.
With the new AI products, depending on the platform, advertisers may not be able to control key factors such as the consumers they’re targeting, the platforms and webpages that run their ads, and whether the final ads look like they want. In many cases, marketers may have limited visibility into how well specific campaigns performed, and why. Put simply, marketers have to relinquish control and trust the algorithm.
Despite the lack of control, many marketers have embraced the new AI-powered tools as they deliver higher traffic numbers than traditional search ad buys, which is more important for advertisers than transparency.
Many marketers, however, would prefer to choose where ads run rather than where they won’t, because even a list of 20,000 sites, pages and apps accounts for only a fraction of the billions of places where digital ads may appear.
In a recent report, Susan Li, Meta’s Chief Financial Officer, said that adoption of its Advantage+ shopping tool, which automates ad campaigns tied to online sales, increased 70% year-over-year. she also said the product could bring in $20 billion annually.
On his part, Philipp Schindler, chief business officer and senior vice president at Google parent Alphabet, said Google will continue to develop AI tools for creating and buying ads.
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