Artificial intelligence (AI) and machine learning (ML) are revolutionizing the way businesses and agencies can approach digital advertising. These cutting-edge technologies are helping us as agencies and businesses to better understand target audiences, optimize their advertising campaigns, and ultimately drive more conversions and revenue. At MDigital we were one of the first Australian companies to utilise cutting edge AI tech from USA to benefit Australian businesses. We first started in this space in 2021 with our adoption of Trapica, the system we believe to be best of breed. In the time that we’ve been utilising Trapica we’ve learned a lot. In this blog post, we will explore the opportunities and also the challenges of using Artificial Intelligence in digital advertising on a high level. In subsequent blogs we will delve into the detail of the system, if you have specific questions in the meantime please reach out.
One of the biggest opportunities of using AI and ML in digital advertising is the ability to better understand and target specific audiences. By analysing data on consumer behaviour, demographics, and browsing history, AI algorithms can identify patterns and insights that we might (and frequently do) miss. This allows businesses to create highly targeted and personalized advertising campaigns that are more likely to resonate with their target audience.
To give you a specific example of this in action with Trapica, we utilised the system with a well known Australian fashion brand. One of the benefits of using Trapica over time is that the AI comes to know our target market really well and it will suggest new audience groups to target with our Facebook and Instagram advertising that we’ve never thought of. One such suggestion was to target the new audience segment Art Jewellery – as an agency we were not even aware of this segment, we haven’t worked with a major jewellery business before and didn’t know there was such a segment as ART jewellery. We have come to really trust the data we get from Trapica so we tried it out and sure enough it not only went well but we saw an increase in conversions of over 30% and a decrease in cost per conversion of 15%.
Another major opportunity of AI and ML in digital advertising is the ability to optimize advertising campaigns in real-time. By constantly analyzing data on consumer behavior, AI algorithms can adjust advertising strategies on the fly to maximize conversions and revenue. For example, if an AI system detects that a particular ad is not performing well, it can automatically adjust the targeting, messaging, or placement of the ad to improve its performance. As an agency this has been particularly useful as we are not always able to monitor ad performance 100% of the time. It’s also been particularly useful when it comes to creatives for ad campaigns. If a particular creative isn’t going so well Trapica will simply not show that creative as much – the AI has access to far more data than we have, it is better placed to make these decisions rather than us as individuals with our subjective bias.
Another major opportunity of using AI in digital marketing is the ability to automate repetitive and time-consuming tasks. For example, AI algorithms can be used to automatically optimize ad bids, identify and block fraudulent traffic, or even create ad copy and images. This can really help businesses save time and resources, and allows them to focus on more strategic tasks. As an agency this is invaluable.
However, there are also challenges to using Artificial Intelligence and ML in digital advertising. One of the main challenges is the need for high-quality data to train and optimize the algorithms. Without accurate and comprehensive data, the AI systems won’t be able to make accurate predictions or decisions. This can be a significant obstacle for businesses that do not have the resources or expertise to collect and process large amounts of data. Additionally, if the data is not representative of the entire population, the AI systems may make decisions that are discriminatory or unfair. To combat this challenge at MDigital we ensure that we are using both targeted audience groupings when using Trapica for our Facebook and Instagram marketing, in addition to utilising Trapica on really large population based audiences via Advantage + Shopping Campaigns. More on this in a later blog.
Another significant challenge for businesses is the cost of implementing AI and ML systems. The technology can bring significant benefits, but it can also be quite expensive, especially for small and medium-sized businesses. That’s why we encourage other digital marketing agencies to implement a system like Trapica. We are able to pool our clients onto the one Trapica account and this has been fantastic for our smaller clients who normally wouldn’t have the opportunity of taking advantage of technology such as this.
In conclusion, while AI and ML can greatly benefit businesses in the digital advertising industry, it is important to keep in mind the challenges that come with it, specifically the need for high-quality data and the cost of implementing and maintaining the systems. If you’re interested in implementing Artificial Intelligence into your online marketing efforts why not give us a call at MDigital, we can share our learnings and advise you of the best way forward.