Can AI be used for targeted advertising? And how?
AI technologies can be used to target advertising online. They do this by using data about people’s online content and behaviour – for example how people interact with online adverts – to target and personalise adverts.
AI tools can be programmed to learn about consumers’ interactions with online adverts. These tools use data about factors such as when the advert was displayed and clicked on, how people got to the page (for example, via search) and what device was used, as well as people’s personal data, such as their gender, age or political preferences. This information helps advertisers make inferences about people’s habits, preferences and interests.
AI-driven advertising can be beneficial for companies and consumers. Companies use AI to help them reach more customers, personalise messages and images, and spend their advertising budget effectively. Companies have an interest in more people seeing their adverts, so they want to improve how adverts ‘perform’. This is often measured through ‘conversions’ or the number of ‘click throughs’ to a particular product or service.
Consumers can benefit through discovering new products, seeing more relevant adverts, and having a more streamlined customer journey. Research has found that people are more comfortable with targeted adverts if they have control over the data they are sharing, trust the advertiser, and if there is a justification or explanation about why the personal data is being used.
However, there are also downsides to targeted advertisements. Issues include discrimination and polarisation around advert personalisation and repetition of hate speech. There can also be problems with informed consent, with big tech companies such as Meta recently being fined over $400 million for its approach to personalised advertising and how it processes personal data.