AI is transforming all sectors of the economy and creating new opportunities for growth and productivity. From healthcare to the construction industry, AI is revolutionizing product offerings, customer experiences and business efficiencies. This new technology is also driving change in marketing and advertising. But while marketers are quick to jump on the AI bandwagon, how can they be sure they are getting the most out of it?
Without doubt, AI offers huge value to marketers, bolstering their targeting, modelling and personalization strategies. In order to reach the right audience in the most effective way, AI allows marketers to build predictive models which optimize delivery by serving ads to the users most likely to generate a brand outcome – a visit to store, change in opinion or even a purchase. Driven by predictive factors such as browsing behavior, location history, time of day, and even weather forecasts, AI is crucial in delivering not only more relevant experiences for consumers, but also in delivering relevant data and learnings back to the advertisers in real-time. With all of the potential that AI brings, it’s no wonder that marketers are rushing to incorporate the tech.
We conducted a study that explored data handling practices, personalization and AI adoption, and found the average AI spend in the US is 19% of associated departmental budgets. 43% of businesses allocated AI investments to their marketing budget, while 22% allocated this spend to their digital budget, with a further one in five placing this spend within innovation budgets.
But advertisers need to be careful not to invest blindly. As budgets for 2019 are signed off, how can marketers be confident their AI investments are adding real value to the digital campaigns they power? It’s an important question, given the substantial investments brands are now making. We conducted a study that explored data handling practices, personalization and AI adoption, and found the average AI spend in the US is 19% of associated departmental budgets. 43% of businesses allocated AI investments to their marketing budget, while 22% allocated this spend to their digital budget, with a further one in five placing this spend within innovation budgets.
Whether marketing AI spend sits in innovation, marketing or digital is not problematic in itself. The issue revolves around why it is there. If an AI-driven marketing solution is not fully understood, and is allocated loosely as “digital” or “innovation” just because it’s something new, then marketing may not be maximizing the true value of this new technology.
The reality is that marketing AI investments should be tracked in much the same way as media spend is, and a strong attribution model will help achieve this. Only with a robust approach to measuring innovation can we get the most out of AI. According to our research, as many as one quarter of US respondents said they are unable to measure the impact of their AI investments.
In terms of evaluating digital campaign performance, any decent AI solution should compare a control group with an exposed group, showing uplift as a result of the AI’s optimization activities. AI becomes truly effective when it is attributable and when performance is carefully measured. If marketers aren’t properly assessing its performance, then it becomes extremely difficult to justify AI investment over time. Innovation for innovation’s sake won’t work: there has to be a tangible problem to overcome, which in turn drives brand outcomes.
Hand in hand with a precise attribution model, marketers need to have a clear picture of the strategic value that their AI solution is supporting. Are you looking to personalize ad experiences to drive brand recognition, purchase intent or sales? Is it feeding into the pilot phase of the campaign, or does it add most value for later stages of a campaign lower down the funnel? This wider strategy will inform your choice of metric, which in turn sets the baseline for your evaluation of – and future investments – in AI for marketing.
Now is the time of year to be clear on how your marketing budget has been allocated. With AI technology solutions increasingly at the fingertips of digital marketers, be sure that you are tracking any investments in this new tech just as you are tracking wider media spend. Attribution is key, and will help you set benchmark criteria for future investments.