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How AI Enhances Personalized Advertising Experiences for Retailers

, , , , , | October 12, 2022 | By

In the new era of all-digital advertising, every company must develop a strategy for generating customer growth, loyalty, and retention. But many companies become so fixated on churning out new advertising that they never bother to assess how well their campaigns are actually working. Today’s consumers will click away from an ad in a fraction of a second if it’s not relevant to them. And if they see it again, it may actually undermine your product. 

Artificial intelligence (AI) is here to help. AI advertising ensures customers get personalized advertising that speaks to their needs—never annoying content that serves only to build brand animus. Your AI advertising must be built on at least four pillars. 

1. SKU-Driven Content

Retailers are increasingly adopting a “modern creative” approach that showcases SKU-driven content. Stock-keeping units (SKUs) come from a catalog data feed, which allows customization across many dimensions: sale prices, categorization clustering, collaborative filtering, and much more.

Recommendations have numerous components, such as:

  • Retargeting: Did you shop for that specific pair of shoes? 

  • Computed interest: Are you generally interested in shoes? 

  • General merchandising priorities: We don’t know if you want shoes, but here are some shoes we want to sell now.

  • Recency: We’ve shown you shoes for a while, and you haven’t responded, so here are some socks.

  • Profile: We saw that you shopped for multiple family members, so we’re going to add shoes from outside of your category.

2. Promotion Support

The most effective promotions build upon SKU-specific information. For example, your company is running a promotion on running shoes. From there, an AI digital advertising strategy might involve assessing whether a user is interested in a specific running shoe, then target that shoe for the promotion. 

Creative would then overlay its text and imagery on top of the rest of the ad. Importantly, this is subject to ongoing testing to determine the best layout or creative variation to attract consumer interest

3. Retail Support/Store-Driven Support

Retailers often have physical and digital presences. Digital ads that bring customers into the store also bring in more revenue. These ads require advanced logic and a data feed with store locations, knowing where the user is and which store is closest. This system also includes a default creative if the user’s location is not within a set number of miles. 

In addition, the feed will have to take into account any other targeting variables, such as in-stock availability, retail price, promotional price, and maybe even specific scheduling to support the store during business hours.

4. Event-Specific Badging

Most businesses have a sales schedule. These sales or events can occur in quick succession and need to be rotated out quickly. Standardized ads can have various “skins” or “badges” that quickly and easily apply sales event messaging on top of all other current messaging.

AI advertising is building an entirely new breed of marketing creative. Get it right and you’ll attract new customers, engage long-standing customers, and avoid alienating your audience. An innovative marketing strategy makes advertising fun, encouraging consumers to meaningfully engage with your brand and build a strong brand affinity that can drive years of purchases. But intrude upon consumers’ browsing habits with meaningless videos or annoying pop-ups, and you can alienate them forever. 

Want to learn more about generating, testing, and refining personalized ads? Download our white paper, Beyond Basic Ad Testing: A Proven Framework for Perpetual Digital Creative Optimization, today

Infographic: 4 Solutions for Overcoming Your CX Challenges