Thanks to the emergence of platforms like ChatGPT, Bard and Midjourney, artificial intelligence (AI) has been thrust into the mainstream, forcing the world to take notice of the technology’s capabilities, writes Matt Nash, UK Managing Director at Scibids.

While AI has actually played a massive role in our everyday lives for years, the current craze surrounding the technology has given rise to the idea that we may be entering a ‘Golden Age’ of AI. Whether this is indeed the case in the wider world is perhaps up to some debate. Nevertheless, within the realm of digital marketing, it’s difficult to argue that the era isn’t in full swing.

Indeed, the use of AI-based technologies is already widespread across the digital advertising industry. In fact, a recent survey that Scibids conducted found that 94% of UK brands are applying the technology to at least one area of their digital marketing strategies.

At the broad level, AI-based technologies are freeing up digital marketers in operational roles and trading teams, helping them to be more strategic in their thinking through increasing automation of other processes. It is also crucially helping them to navigate the various obstacles facing the digital ecosystem right now, such as the decline in third-party data and the impact this is having on the future of effective targeting.

With the backing of ever-increasing computing power and better access to data science expertise, the use of AI is now very much within the reach of any and every brand looking to supercharge their marketing in the privacy-first world. Nevertheless, the prevalence of off-the-shelf AI solutions within digital marketing strategies doesn’t necessarily translate to the industry fully embracing the whole roster of capabilities available to them. For example, only half of brands are making full use of the customisation features made available by demand side platforms (DSPs). A task for which AI-based technologies are uniquely suited.

As a result, marketers are failing to capitalise on a host of benefits that AI can still deliver for them, particularly around campaign effectiveness.

Intelligence behind digital marketing

As the industry continues to work its way through a period of great change and disruption, and with marketing budgets increasingly under pressure to stretch even further, the need for truly effective and efficient campaigns has never been greater. In overcoming these challenges, AI has played a critical role.

For example, amongst the respondents, more than 60% are using AI to deliver effective marketing that is privacy-friendly and less damaging to the environment. In particular, advertisers are utilising AI to improve their digital targeting as well as optimised measurement. Reducing the instances of spray-and-pray campaigns, where little thought is given to who is being targeted and how likely they are to convert, this smarter use of AI is enabling the delivery of not only more sustainable advertising, but also more effective for return-on-investment.

Partly thanks to AI, digital marketers are looking confidently to the future. With UK digital ad spend having jumped to $26 billion in 2022, a figure that is expected to reach $32.3 billion in 2023, the majority of brands expect their programmatic investment will grow over the next 12 months. Nevertheless, digital marketers are by no means out of the woods. With the rate of inflation remaining a serious cause for concern, tools and technologies need to be explored that allow it to continue to thrive.

Most importantly, digital advertisers need to engage with all that AI is still able to give them, to ensure that their campaigns are as cost-effective as they can be, and continue to drive real business outcomes.

Opportunity in programmatic

Thankfully, there is still plenty of room for marketers to reap the rewards of implementing AI. In particular, in maximising their programmatic buying through AI-led optimisation of DSP custom bidding features, where less than a quarter are currently doing so.

Marketers are already aware of the benefits of incorporating technology to optimise their DSP functionality, with the majority well or fairly-well informed about the opportunities for customisation in their programmatic strategy. However, only half of respondents believed that they were harnessing the full potential of these DSP customisation options.

Historically, the volume of data, coupled with fragmentation of reporting, meant that media teams were unable to unpack the insights available to them within DSPs. Those failing to make full use of DSP customisation often cite a lack of budget , a lack of staff resources, and a lack of time as the biggest blockers to fully unleashing what DSPs have to offer.

AI technology can help here to overcome this challenge through its ability to crunch vast datasets in mere seconds, and ensure that campaign delivery is optimised. DSPs have made this possible by increasingly opening up their APIs to incorporate brand’s plug-in-and-play customisable algorithms, enabling marketers to input their own bespoke bidding rules. This means brands can optimise performance toward campaign-specific KPIs, such as return on ad spend (ROAS) as well as quality CPMs (Q-CPMs), such as those that are optimised toward user attention.

These algorithms automate the process to ensure that any programmatic buying strategy is being delivered based on the latest data available. This frees up teams to perform tasks that may be a more valuable application of their skills. Furthermore, these customisable algorithms only make use of non-identifiable semantic and contextual metadata, removing the need to use the ‘dirty fuel’ of third-party cookies and identifiers that have arguably put the industry in the difficult position it is in today.

The Golden Age is here

Brands have an explicit need to maximise their efficiency as they look to navigate the economic climate. Moreover, they need to be adaptive and granular to deliver campaigns at scale, with precision and without wastage. Customisable algorithms – and AI more broadly – offer a route to supercharging a digital marketing strategy and ensuring that ad spend is not being wasted on ineffective marketing.

Through customisable algorithms, effectiveness can be translated through the tailored outcomes that really matter to a business, unlocking real ROI across paid media. It will also help reduce instances of ad waste and ensure that the bad practices associated with user tracking are a thing of the past.

This new era has opened up so many possibilities to marketers, and will continue to do so. While it’s generally encouraging to see the widespread application of AI within digital marketing, nevertheless, as our report has found, there is still plenty of room for brands to unlock the true potential of AI. Those marketers that are most willing to explore the breadth of those possibilities will be those that find the most success in the privacy-first future. In particular, one avenue that should be explored sooner rather than later is customisable algorithms, which will be one of the ultimate keys to making digital marketing better for all stakeholders. Until then, marketers will be missing out on unlocking the true power of this Golden Age of AI.