Originally published on Forbes.
There has never been a better time to start a direct to consumer (D2C) brand. More than half a billion dollars have been raised to launch new D2C companies since the start of pandemic last year. However, for many brands in a digital-first world, growth remains a challenge. Businesses are constantly collecting data to boost stats for cost per mile, click through rates, and return on ad spend. Ratios such as customer lifetime value (LTV) to customer acquisition (CAC) can determine the future of these brands, and a lot of attention lies on optimizing direct response growth.
Social media ad spend overtook paid search ad spend for the first time this year, brands are adapting to more personalized and emotionally intelligent ad delivery. This is where artificial intelligence comes in.
We’ve all seen the pitch on our feed: “AI wrote this,” and realized we could barely tell. AI content generators are becoming more popular. They work pretty well, but there is a big difference between an AI-built platform that can generate coherent content, and one that can yield high-performing ads.
Machine learning (ML) marketing tools are gaining traction amongst larger brands, however, the focus has been on audience segmentation (e.g. predicting lifetime value, customer churn and others). It is only recently that technology advanced enough to start pushing the boundaries in content generation.
There is a lot of excitement around text generation using Open AI’s GPT 3. While these advancements are very encouraging, more transformative is the technology that is able to understand, evaluate and generate visual content. New platforms, leveraging deep neural network architectures, are emerging. They specifically facilitate access for marketers to the power of AI in visual storytelling.
There are three primary ways in which AI is changing the game in terms of online advertising.
Enhancing Marketers’ Productivity
Video is the fastest growing ad format, with platforms like Tik-tok reaching one billion monthly users. Video production is both time and cost intensive, and performance is not guaranteed.
Artificial intelligence can now make high performance video ads from ingredients such as images, video clips, text and sound. It can score each component and assemble thousands of ads, identifying the ones most likely to convert. AI-powered marketing productivity tools enable brands of any size to create and advertise with confidence.
One AI marketing platform, Genus Artificial Intelligence, is founded by Tadas Jucikas, who explains it this way: “We’re using artificial neural networks to build models that understand and predict visual asset performance in the social media advertising context. We enable brands of any size to become powerhouses of content creation for ad campaigns, generating and optimizing visual content, removing repetitive work and enabling marketers to accelerate their vision instead. This is opening up the next frontier of human creativity.”
What AI does best in any context is removes the guesswork from a complex creative process and helps brands predict ad engagement, CTR and decrease CPA. The Genus AI Growth Platform enables marketers to create highly optimized social media campaigns before companies plunk down thousands or millions on ad spend making these insights invaluable.
New tools illustrate just how extensive the possibilities are for using machine learning. Machine learning can predict how content will perform.
Artificial intelligence can help marketers save time and budget by building pre-optimized ad-sets. Content can be matched to select audiences, prioritizing performance and different visual styles for unique segments. The best ML model uses rebalancing and assembles ML representation design patterns. An outcome marketers can get excited about is the ability to predict how popular visual ad content will be on the selected social media channel.
Unlocking High-Performing Video Generation
In digital marketing, you can find no collateral type with greater potential than videos. Businesses are projected to spend more than $92 billion on video ads in 2021. Machine learning powered media relies on sophisticated technology and is capable of generating more high-quality ads at a fraction of the cost.
As the generations age and new social media channels emerge, the future is a world where each brand will have to be an expert in multiple ad management platforms. In such a world, AI powered performance platforms allow for having one centralized location integrated with multiple social channels allowing for content generation, winning content identification and audiences, content variants and easy way to use match the two according to a specific brand’s customer base.
Video generation software only requires uploaded, branded assets, after which AI systems can create a variety of ads for selection. As Marketing Researchers Joe Heyes and Steven Franz explain, AI and ML go further, if fed by the right data, and can predict which will be the highest performing video. Heres and Franz found that this unlocks virtually limitless potential, and dramatically shifts the timeline for developing and deploying video ad content.
The best data provides insights that can be applied in numerous contexts. Marketers live, eat, breathe, and sleep audience segmentation, and the data scientists at Genus AI have used their models to identify six communication archetypes, which are:
- Experimental fun seekers
- Organized social contributors
- Open simplicity seekers
- Reliable plan makers
- Traditional comfort seekers
- Reactive security seekers
Dr. Jucikas explains, “The Genus AI platform is designed to provide marketers with the ability to understand their customer communication archetypes and to match each archetype based audience with the ad visuals that are predicted to resonate with them the most.”
This predictive capacity is truly the holy grail of digital marketing, but it’s not just about acquiring customers.
Beyond Acquisition: Customer Loyalty and Retention
The value of acquiring a new customer pales in comparison to the value of retaining that customer. Any platform that can increase customer lifetime value and support customer loyalty is a boon to marketers. The best brands make meaningful connections and encourage repeat purchases, which is one reason behemoths like Apple continue to lead the way for loyalty. And it’s not only household names that found this approach beneficial. Individual brands such as Igor Montemor and major international brands Petroteq have shown marked benefits from this approach. Both Montemor and Petroteq saw impressive ROI from their investment in an AI-driven CLV approach.
AI is becoming one of the most important tools to increase customer loyalty. Marketers can use AI to analyze historical customer data and generate new insights. AI tools can generate emotionally intelligent insights, which are built around the latest advancements in neuroscience. Using this system, marketers can segment customers by the communication archetype developed by Genus AI and predict the behavior of each customer segment.
AI also lets marketers individualize visual communications across various channels. Once it’s clear which archetype is the most profitable, marketers can tailor communication to the needs of that segment, minimizing time and maximizing return.
Marketing is changing. Customer experience is more important than ever. AI-powered marketing productivity tools enable marketers to orchestrate strategic campaigns, mapping each stage of the customer journey and providing personalized meaningful experiences.
AI is continuously learning and adapting to new contexts, radical transformation is inevitable. Machine learning has the power to democratize the space of digital advertising, giving information previously available only to senior level data analysts, now accessible by any digital marketer with the ambition to do more.
It is no longer enough to have the highest ad spend. Marketers have to get smarter about delivering the right message at the right moment. In a world of endless noise and jam-packed social feeds, digital marketers who can predict how audiences will respond, will lead the pack.