Ads are about to get way more personal thanks to AI

Why the ad industry is excited by AI
Why the ad industry is excited by AI   

The use of artificial intelligence (AI) in advertising is set to grow, a top marketing chief told CNBC, as brands look at new ways to target and engage consumers.

AI is in its infancy when it comes to advertising but a handful of companies are trialing the technology and are bullish on its potential.

"I think this is an exciting thing…what you can see is huge waves coming down which are going to really impact the way someone like myself engage with consumers," Keith Weed, the chief marketing officer at Unilever, said at a CNBC event in Davos last week.

Unilever owns a number of consumer brands from Dove soap to Lipton teas. Last year, the company experimented with AI advertising. Its Knorr food brand teamed up with a firm called DigitalGenius to create Chef Wendy, an AI system that allowed customers to send a text message and receive responses suggesting recipes or tips.

For example, if a user asked for a recipe using chicken for a party, Chef Wendy could process the request, and send back a response.

The experiment was aimed at emerging market customers where there is a high penetration of feature phones and SMS is the primary form of messaging via those devices.

Advertising firm M&C Saatchi also tried an AI campaign last year. The firm set up an "evolving" poster in London which used an algorithm to detect people's reactions and then adapt itself as a result. It had pictures and copy pre-installed, and the algorithm created different combinations. If the combination of words and images that create the poster is deemed successful, the ad would survive and be used again. The cameras around the poster can measure a person's engagement and reactions to see whether they are happy, sad or neutral. If the person is happy, then the ad is deemed successful. The idea is that the ads keep adapting to become more effective.

CNBC

"I think what's exciting about artificial intelligence is it's a way of engaging people… I think we're going to see more of that – tailored, targeted artificial intelligence driven content," Weed said.

Mobile a ‘challenge’

Weed also addressed mobile advertising which has recently become a big focus for marketers as companies from Google to Facebook looking to improve their product. Total U.S. mobile ad spending increased by 59 percent in 2015 to reach $30.45 billion, according to eMarketer.

But advertisers have found mobile hard to monetize. In a survey of 1,050 U.S. marketers conducted by AdRoll, major challenges of mobile advertising include the lack of analytics tool and the inability to convert users into paying customers via a handset.

Weed admitted that the industry had not got mobile advertising right, but if it does, it could be a big opportunity.

"That's one of the big focuses for the industry, is to get more engaging content on mobile," Weed told CNBC.

"Mobile could be the biggest, greatest opportunity for brand builders and advertisers, or it could in fact be one of our biggest challenges."