How is AI used in paid media advertising?

A review of how AI has influenced paid media to date, & what comes next.

AI has already been responsible for the majority of improvements in paid media over the last few years, through the platforms’ machine learning algorithms, which impact everything from who sees which ads, to how your budget is allocated. Read on to better understand how it is currently being used, & what we can expect in the next few years.

The biggest impact AI has had to date on paid media is through smart bidding/campaign objectives. Across top advertising platforms (Google, DV360, Meta, etc.), we now have the ability to tell the platform what we’re trying to achieve (e.g. online sales, website traffic, post engagement), & the platforms can then use their AI capabilities to optimise our activity to achieve our goals.

They do this in many ways, with some listed below:

  • Choosing which search terms we show ads for in Google through Dynamic Search Ads
  • Choosing which ad copy is included in an ad in Google through Responsive Search Ads
  • Distributing budget between different ad groups, ad sets or line items based on which are achieving our goals
  • Deciding which Meta creative is shown to which user
  • Creating lookalike audiences from a source list in Meta, by matching similar users

Before AI, the most successful strategies involved hyper-granular account structures, giving us maximum control. Now that AI can make more informed real-time decisions on what will lead to success in the auctions than we can, the best advertisers are masters of finding the right balance between manual control, & giving AI the freedom to make decisions.

An example of this balance is in the current best practice for ad group structure in Google Ads. Where we used to have a single ad & keyword per ad group (SKAG) to allow maximum control, now we focus on having a theme per ad group (e.g. trousers, skirts, t-shirts). Here we are helping the AI by providing some categorisation of search terms & relevant ads, but then allowing it the freedom to optimise within these constraints.

As AI improves, we can expect our strategies to shift further towards giving it control, as it requires our help less & less. We have seen this happen in Meta over the last years, where detailed targeting audiences have become less effective than broad ‘catch all’ targeting, allowing AI to choose who sees our ads with only location & demographic restrictions.

In the last year, generative AI (e.g. ChatGPT) has also become of use to help with creating ad copy, keywords, & assisting with technical work e.g. writing scripts.

The platforms are also integrating new capabilities such as:

  • Creating suggested ad copy
  • Generating & enhancing images
  • Conversational campaign creation

Moving into the future, these tools will continue making getting the basics right easier, meaning top line marketing strategy, brand & creative (which AI can’t as easily produce) will be what gives an advertiser the edge.

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How is AI used in paid media advertising?

Oxford educated, Gwenno’s expertise now spans Paid Search, Social & Display, working on a mix of ecommerce, charity, event, education & B2B clients. In addition to tackling creative strategy, she is also the agency's tracking expert and oversees data & reporting projects.