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Future of advertising: Popular AI tools ad agencies are using to enhance impact

What difference are AI tools creating for advertising agencies? reached out to industry experts to know about AI-based tools that are being preferred by advertisers and the challenges associated with them

According to GroupM’s report, ‘The Next 10 – Reports on the technologies and behaviours that will shape advertising over the decade’, AI-enabled advertising will be a $1.3 trillion business by 2032.

By that time, there are chances that AI-enabled advertising will represent more than 90% of all advertising as channels like TV, Audio and Outdoor become more digital, addressable and programmatic, stated the report. reached out to some of the leading technology innovators to know about some of the popular AI-based tools that are being preferred by advertisers and the challenges associated with them.

With AI-based tools taking the front seat in the world of advertising, opportunities for open internet too are set to flourish. In fact, some of the big Indian advertisers are showing keen interest in exploring the open internet, a highly placed source informed

Amitt Sharma

Amitt Sharma, Founder and CEO, VDO.AI, while speaking about some of the popular AI-based tools in advertising, said, “Conversational AI ads are becoming increasingly popular with their ability to generate a higher degree of call-to-action. Furthermore, these ads also enable a predictive analysis of consumer behaviour and thereby enhance their overall experience. This in turn results in higher customer acquisition as well as retention.”

The road to AI is certainly not a cakewalk and advertisers are well aware of it. While some of the major challenges in the space are related to data management, dug deeper to find out more hitches that need to be addressed.

Coming out of walled gardens

Tabrez Alam

Tabrez Alam, Chief Data and Strategy Officer, Bobble AI, specified some of the major challenges. According to him, advertisers rely on data that are easily accessible on Google, Facebook and YouTube instead of the data that is specifically required to meet their business goals. What needs to be done is advertisers should invest in the right kind of data to scale, he said.  

Another highly placed source, who is currently working on the open internet confirmed the same to that advertisers must come out of the walled gardens because a lot of users are on the open internet. Big advertisers who are looking at investing in a few consumers that can actually convert rather than a bigger audience that might not be willing to spend have started considering the open internet.

Absence of in-house digital teams

The second major challenge, as per Alam, is the absence of an in-house digital team. With no in-house digital team, brands often fail to get desired results. Why? Because the in-house digital teams understand the nuances of consumer behaviour as well as the brand.

“The market research companies provide data based upon research that is done on specific sample size. That research is limited to their products and the results may differ from the actual situation because it is done on a sample. So, an AI model is there but there is no transparency at all,” he said.

“The more addressable issue here is, that data will not be able to solve the problem and that companies should consider having their own digital set-up and rely on first-party data,” he added.

When the cookie crumbles

In the world of AI, where the cookie-less world looks a little scary, brands are mulling over first-party data and the significance of hyper-personalised consumer journey.

Sharma, while elaborating on the importance of leveraging relevant data, said, “The lack of adequate or relevant data is another challenge that could be faced in leveraging AI to collect and interpret data. This is where programmatic advertising is superior to traditional methods, with its ability to collect and process data for appropriate analysis to gauge consumer preferences.”  

Further, speaking about cookie-less data solutions, he added, “Data privacy could also pose a challenge for advertisers working with third-party data. This has prompted advertisers to switch to cookie-less data solutions and first-party data collection with the audience’s consent. This also helps to create laser-targeted ads that are a direct match with consumer needs and preferences.”

While speaking about the future of first-party data, an industry expert mentioned two leading e-commerce platforms that use first-party data and added that soon with the increasing popularity of more personalised consumer journeys, more and more brands will switch to first-party data.

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