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How AI can help ecommerce brands boost conversions

by Louisa Jones: Sales director at Scibids.
Digital advertising continues to be dominated by walled gardens, with around 80% of spend heading in the direction of Alphabet, Meta, and Amazon. This creates a significant challenge for brands, as user data is concentrated amongst just a few dominant players. And this is all despite consumers spending half of their time online on the open internet, away from these environments.

The major advantage of walled gardens is that they have a huge amount of user data available to them, even outside of the data that those users have willingly provided to them. With the changes to cookies, and other third-party data sources, this data advantage is disappearing, and there’s an opportunity for brands to excel on the open internet.

Creating intelligent advertising

Brands can explore this opportunity by using technology to level the playing field, particularly through the adoption of artificial intelligence (AI) to analyse different metrics and signals, and enable brands to enjoy the same benefits on the open internet.

Ecommerce brands are able to use AI to optimise custom metrics by taking highly-specific definitions of quality engagement into account to execute scalable media buying strategies. AI can find patterns that can open up consumer-friendly avenues for achieving ROI which, in turn, makes it a far better option than using data based on any cookies.

As a result, AI offers advertisers an alternative targeting method to the use of privacy-infringing third-party cookie data, and helps to maintain the open internet – all while boosting conversions for brands online.

These customisable AI algorithms are capable of adapting to a brand’s unique business needs. In particular, brands can develop algorithms trained to maximise their objectives, leading to a boost in conversion rates. And this powerful ad decisioning works without the need for user-specific targeting signals, shifting advertisers away from user tracking, profiling, and a reliance on third-party cookies.

Luxury beauty brand Charlotte Tilbury, for example, recently tested a custom AI integration and, over the course of two months, was able to reduce its average cost per acquisition by 29%.

Custom bidding algorithms, deployed via Google’s DV360 DSP, were designed to take upper funnel data into account, including site visits, clicks, and ad viewability. This enabled the brand to optimise toward multiple KPI scenarios at scale.

As a result, Charlotte Tilbury has seen a 60% increase in the conversion rate of its acquisition campaigns.

Walled gardens cannot provide all the answers

Of course, brands may still be tempted to take the “easy way out”, and continue to let big tech do all the heavy lifting. However, there are several benefits of using AI on the open internet, and moving away from walled gardens, beyond just addressing the reliance on third-party data.

There’s a brand safety element, because walled gardens cannot guarantee a safe environment. To ensure brand safety, advertisers need to be fully aware of where their campaigns are, and be able to refine the definition of what is acceptable based on this.

Furthermore, marketers need to be able to see granular insights from their campaigns in order to optimise them to their full potential. Walled gardens are increasingly removing granular reporting, making it difficult for advertisers to measure their campaigns, and draw the insights necessary to power their entire advertising strategy.

Walled gardens also won’t necessarily put advertiser objectives above, or on par with, their own. AI algorithms trained to maximise advertiser objectives are always going to put the goals of the brand first. AI can score impressions and select only those predicted to deliver the required budget with the best possible results against an advertiser’s unique KPIs and business outcomes. This increases the available volume of impression opportunities that AI is able to buy, and means it is able to be more selective with the impressions it actually purchases.

Modern AI is capable of running more calculations in a single minute than a human could in several lifetimes. This ability to analyse data at incredible scale provides brands with the opportunity to optimise results far beyond the capabilities of any manual analysis, and adapt strategies in real-time as things evolve.

As a result, ecommerce brands can supercharge their conversion rates. And this is all done without infringing on the privacy of any users, making it the perfect solution for the post-cookie, privacy-focused world.

Originally published on InternetRetailing
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