From under the hood to front and center—how AI is changing the ad experience

For more than a decade, advanced artificial intelligence (AI) and machine learning (ML), a subfield of AI that allows technology systems the ability to learn from experience without explicit programming, have been transforming the advertising industry. This technology has evolved everything from auctioning, to bidding, to the inventory of ads themselves. These advancements have made ad experiences today more tailored to our interests, preferences, and digital journeys than ever before. With the help of AI, advertising has become more responsive to consumer needs, creating more efficient and better experiences that serve both the end consumers and advertisers.

“At Amazon Ads, we have long been innovating, using state-of-the-art machine learning and AI models across our advertising programs. We use this technology for campaign recommendations—such as creatives, targeting, bids, and budgets—for advertisers,” said Jay Richman, vice president of creative tech at Amazon Ads. “The new generative AI technology, particularly as it’s being applied in the advertising industry, marks a significant shift from previous approaches. For advanced content creation, generative AI can produce a wide range of content, including text, images, and videos, that is highly customized and creative. Through the use of large language models and deep learning, generative AI can analyze vast amounts of information to understand what may be helpful for customers with unprecedented depth and accuracy.”

AI is continuing to rapidly revolutionize the advertising industry, from creating more efficient and tailored campaigns to scaling content and creative resources for expedited delivery, and even to real-time optimization for achieving better business outcomes.

Machine learning and AI are essential to analyzing signals that can enable advertisers to better understand, reach, and engage their customers. This ultra-fast analysis enables greater efficiency of campaign creation, creative development, campaign deployment, and budget optimization. AI enables near real-time agility in making advertising campaigns that are not only improved consumer experiences, but also can help achieve business goals faster.

“Within the Amazon Ads business, we use billions of parameters and real-time shopping and streaming signals to engage customers with relevant ads. And because of this, our ads work smarter,” said Kelly MacLean, vice president of Amazon DSP, Ads Technology. “While these millions of signals may seem overwhelming, they aren’t overwhelming for a machine. It’s the fuel that feeds learning and insights, and more is better.”

Evolving AI capabilities, like generative AI, which describes a branch of deep learning that uses expansive neural networks to create content in response to a prompt, can instantly produce a vast range of content. This content can take the form of text, images, and videos that are meticulously customized and creative. This ability allows for the creation of visually rich and more engaging ads, going beyond traditional advertising capabilities. The technology’s capacity to swiftly generate high-quality and varied content at scale can help reduce the time and resources needed for creative development, optimize campaign spend, and help enable brands to experiment and iterate with new creative ideas to see which perform best. Last October, Amazon Ads generative AI Image generator was launched to help remove creative obstacles and support brands in generating lifestyle imagery that can help improve their ads’ performance, and it leverages generative AI to automatically curate lifestyle images, based on product details, in seconds.

Like with all things, AI use in advertising is a journey, and one that requires constant iteration to become more valuable to advertisers. According to a recent survey from Advertiser Perceptions, advertisers look to AI tools mostly to solve for needs around enabling more efficiency (63%), more flexibility and agility for campaign changes (50%), faster creative asset development (46%), and cost savings (40%).¹ With these changing advertiser needs; AI can help unlock a multitude of opportunities for driving better business outcomes like through modeled audiences delivering optimized campaign results that can help increase the average return on ad spend.

“We’ve observed that when our modeled audiences reach across anonymous supply throughout the open web, we maintain excellent delivery and drive better engagement rates—up to 25% and more efficient spend with a 12% decrease in cost per click per impression in an internal analysis we conducted across U.S. campaigns,²” said MacLean, the Amazon Ads DSP vice president. “And to help extend the value to advertisers further, we’ve also helped increase the average return on ad spend across U.S. Amazon DSP campaigns by over a third, due to our breadth of buying, browsing, and streaming signals.”

Looking ahead, advancements in generative AI video creation (such as through natural language prompts) indicate video advertising as the next space for innovation in the industry. By leveraging generative AI for video, advertisers could have access to more low-cost and high-quality creative assets, while enhancing customer engagement by offering audiences more relevant and compelling storytelling.

Amazon Ads has been leveraging AI since the early days of the business, like with operational modeling, as well as audience modeling. Customer experience was at the core of the innovation when AI was first leveraged for ad tech capabilities, and it was customer obsession that drove its usage and application. This resulted in accelerating the relevancy of ads, to more efficient bidding that prevents advertisers from overpaying for mediocre ad bids, to getting the best bid price with maximized value and accuracy.

"When we’re buying ad inventory on third-party exchanges we use sophisticated ML models to secure the best ad inventory for our customers at the lowest possible cost, which improves their business overall,” said Ben Allison, director of applied science display at Amazon Ads. “The amount of information we use to find the best opportunities for our advertisers is vast: real-time signals about page content, media and creative, and our audiences, and how they engage with ads. AI helps us innovate: As we double down on AI and optimization, we are able to deliver ad experiences that are more delightful for viewers and shoppers, and more likely to grow our advertisers’ businesses over time."

That’s the marvel of advanced technology like AI; it helps allow for a deeper understanding of the customer journey. This in turn allows for a scaled and more strategic approach to campaign development and content creation, while optimizing spend and delivering more seamless experiences to customers.