How AI Has (Already) Become The Foundation Of Digital Advertising

Generative artificial intelligence is quickly becoming the foundation of the digital advertising landscape.

That might sound like a bold statement—after all, generative artificial intelligence only hit the mainstream two years ago. But while many industries are just beginning to explore the potential of generative artificial intelligence, advertisers have been using artificial intelligence and machine learning for years.

Moreover, with the advent of generative AI, we have moved beyond simple automation into a new era where AI can generate fresh, dynamic content tailored to individual users that evolves in real-time.

In this new era, generative AI will rapidly make advertising more effective, creative and inclusive, as the democratization of advanced AI tools empowers businesses of all sizes to connect with audiences in more meaningful ways.

Why generative artificial intelligence lives up to the hype in advertising

If ad tech leaders have been using AI for years, why is generative AI such a transformational change?

First, the massive increase in data and computing power has led to the development of highly precise artificial intelligence algorithms. These next-generation AI algorithms can now analyze massive data sets and signals in real-time with incredible precision. This allows us to understand customer needs and preferences like never before.

Second, we are no longer limited to optimizing existing campaigns. Generative AI now enables us to create completely new content – ​​from text and images to video – personalized for specific audiences. This is a game changer for teams with limited internal resources, allowing them to run more dynamic and diverse campaigns.

Finally, generative artificial intelligence is now truly mainstream – or rather, the technology is no longer limited to data scientists. User-friendly tools empower marketers of all skill levels to take advantage of these powerful algorithms.

Why these tools are so crucial to the advertising industry

This democratization of generative artificial intelligence is unleashing a great deal of value in the advertising industry, helping advertisers elevate their campaigns in several key ways.

Generative AI uses large-scale language models (LLM) and deep learning to analyze vast amounts of information to understand what can be helpful to users. Advertisers will see their ability to create dynamic, relevant content multiply – meaning they can create more ads that are better targeted to customers’ current needs and interests.

LLMs can also draw insights from customer reviews to get thematic inspiration for future marketing opportunities.

What’s more, AI can optimize campaigns using real-time signals, freeing up advertisers’ time to focus on product development and storytelling.

Connecting advertisers with their target customers

At Amazon Ads, we’ve been leading the way in AI-powered advertising for years, using AI across our technology stack to improve product discovery and drive sales for advertisers.

Our AI models leverage our billions of first-party data signals to help with everything from bid optimization to ad placement and targeting, automating those key decisions to put time and money back in advertisers’ pockets.

For example, in Sponsored Products, we use deep learning and LLM to discover relevant keywords and offer suggestions, using historical purchase patterns and extensive information in Amazon’s catalog. These models are constantly updated to identify trends and ensure that ads match customer intent. Similarly, while serving ads, Amazon Ads uses AI to match relevant ads with customer intent and rank them based on parameters such as estimated click-through rate and conversion rate.

We have just entered the era of generative artificial intelligence

We are already witnessing the incredible impacts of generative AI tools across the entire advertising landscape. Small businesses without large resources now have access to tools that help them create content faster and in greater volume, while larger ones can test, experiment and innovate with them.

But we’ve only scratched the surface of what generative AI will do for advertisers in the coming years. As technology continues to evolve, we can expect even more revolutionary capabilities to emerge, further transforming the way we connect with audiences and optimize campaigns.

Empowerment of creativity and innovation

For leading innovators in the world of digital ads, a key theme in developing generative AI tools is fostering creativity. This innovation is aimed at giving advertisers unprecedented flexibility and control over the content creation process.

In the coming years – if not the coming months – a new generation of generative AI tools will reshape the paradigms for advertisers:

• Content creation will be easy: Advertisers will easily generate high-quality ads in a variety of formats, from text and images to videos, with just a few clicks.
• Inspiration will be readily available: Generative AI tools will provide plenty of inspiration, suggesting different themes, designs and formats to stimulate creativity.
• Customization will be unlimited: Advertisers will transform simple product images into stunning visuals, tailoring them to specific audiences and platforms.
• Experimentation will become standard: Ease of content creation will allow for greater experimentation, allowing advertisers to easily and cost-effectively test different variants and optimize their campaigns for maximum impact.

Better storytelling for better consumer connections

It is already clear that generative artificial intelligence will profoundly reshape the world of digital advertising. Of course, it can be easy to get lost in the technical details of use cases and applications. But when we look back at this revolutionary moment, we won’t talk in terms of ROAS or CPC. Instead, we will recognize that generative artificial intelligence has opened up a future in which all advertisers – big and small – have the tools they need to tell better stories that build more meaningful connections with their audiences.