An introduction to cognitive advertising

By IBM Watson Advertising

Cognitive advertising is a form of marketing that relies on AI and consumer behavior to create a personalized relationship with the customer that can increase engagement and ROI. Through a series of interactions with an advertisement, aided by AI and deep learning capabilities, cognitive ad technology can better learn a consumer’s unique preferences and help ensure any brand interactions they’re having are positive ones. The outcome of these positive engagements with your target audience is that it makes consumers more likely to come back and turn these interactions into actual conversions that drive ROI. 

How does cognitive advertising work?

Cognitive advertising works due to great technological advancements in artificial intelligence and natural language processing. Let’s dive into what exactly these terms mean. 

Artificial intelligence (AI)

Artificial intelligence, or AI, collects a multitude of behavioral data to make predictions about human behavior and how someone will interact with a given ad. This enables advertisers to segment audiences and create messages that will resonate and turn into conversions. 

Natural language processing

Natural language processing (NLP) is a form of linguistics powered by AI that allows computers and technology to understand text and spoken words similar to how a human can. This technology helps these computers understand consumer intent and respond in a way that creates positive brand associations. 

Benefits of cognitive advertising

Advertisers are becoming increasingly interested in cognitive advertising due to its abundance of benefits. Here are just a few: 

Personalization

Consumers are increasingly looking for personalized ad experiences with 56% expecting all of their experiences with a brand to be personalized.1 Additionally, 59% of customers say tailored engagement based on past interactions with a brand is very important to winning their loyalty.2

Cognitive ads take personalization to the next level by using real-life consumer behavior and intricate data to understand audience behavior. The end result is audiences who can reap the benefits of personalized messaging, at the right time, and when they want to see it. 

Increased ROI

Greater ad personalization means users are less likely to be annoyed by unwanted ads and may appreciate the messaging put in front of them. Engagement opportunities can increase and move more swiftly down the sales funnel, which can mean greater ROI for your company long term. In fact, 60% of consumers say they will become repeat buyers after a personalized shopping experience with a retailer.3

Higher engagement

Cognitive ads are not just limited to desktops. They can be utilized on various touchpoints including kiosks and mobile apps. According to the recent State of Engagement report by Marketo, the most popular touchpoints to drive purchases are website (53%), email (49%), and chat (41%).1 The more touchpoints available, the higher engagement a business can expect, especially when it’s messaging that resonates with their audience’s beliefs and attitudes.

Greater brand loyalty 

When users are consistently presented with positive messaging that resonates, brand loyalty can increase. Cognitive ads are all about building a deeper relationship with their target audience. When a consumer can feel that connection, they’re more inclined to come back.

Cookieless targeting

Privacy matters to modern consumers. Sixty-nine percent of those surveyed in Twilio Segment’s State of Personalization Report 2021,3 say they appreciate personalized experiences based on the caveat that they’ve freely shared this information with the organization before. Privacy has also been at the forefront of advertisers’ minds. With the emergence of stricter regulations and loss of cookies, brands need to find new solutions to target audiences without seeming invasive.

Cookieless targeting enables advertisers to create personalized experiences without the reliance on third-party cookies. This kind of targeting has and will continue to become increasingly important to consumers and regulators alike who are concerned about privacy and meeting compliance standards in their industry. 

More relevant context

There is still a great discrepancy between what businesses think they are delivering in terms of personalized experiences and what consumers are perceiving. While 85% of businesses say they are providing personalized experiences to consumers, only 60% of consumers think so.3 

Contextual advertising can be a beneficial way to deliver a personalized experience, without relying on cookies. AI can deliver relevant messaging to target audiences by analyzing the content of the correlating page. For example: If a future bride is investigating wedding dresses, ads for other wedding necessities would be appropriate. Contextual ads take the ability to place advertisements appropriately and deliver this at scale, creating more personalized web experiences. 

Leverage weather insights

Weather-based advertising can also give your brand a competitive edge because the forecast can have a profound effect on behavior. Weather ads can determine if your team should highlight rain boots or shorts. However, weather can also influence whether people will shop at a mall or online on their couch. Additionally, if weather forecasting data is combined with location data, your team will get a better sense of how changes in climate can affect different areas. For example: A Bostonian may wear short sleeves in 60-degree weather, while someone in Florida may put on a coat.

Examples of cognitive advertising

Below are some examples of AI advertising in action.

Toyota Prius uses cognitive ads to increase interaction time 3x benchmark

Toyota Prius came to IBM Watson Advertising looking to reach and engage auto-intenders through cognitive advertising. IBM Watson Advertising and Toyota collaborated on the first-ever cognitive ads in the auto industry with Conversations to enable 1:1 dialogue with users about Toyota’s product information and vehicle FAQs. 

Through the Conversations solution, Toyota Prius was able to engage with their target audience in a brand new way across dynamic ads, The Weather Channel app, and website. The results included: 

  • 3x Google Rich Media Interaction Time Benchmark
  • 6,000 total User Conversations
  • 3 interactions per Session for Big Web
  • 20% increase in Purchase Consideration among M35-49
  • 37% higher engagement with audience-based location targeting than other audience-based campaign targeting used

Learn more about this case study here.

The Weather Channel uses an AI-powered chatbot for COVID-19 Q&A

The Weather Channel came to IBM Watson Advertising with the realization that it was challenging for its users to know which COVID-19 related information they could trust and how they could find reliable information. They used IBM Watson Advertising Conversations technology to develop a COVID-19 Q&A to help consumers get answers to their most pressing COVID-19 questions.

The COVID-19 Q&A with the IBM Watson-powered chatbot is a conversational marketing solution that is trained on 87 topics and has the ability to respond to questions like “How can I protect myself from COVID-19?”, “What are signs and symptoms?” and “How can I safely run errands?”. All questions were backed up by up-to-date information from The Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO). Results from this campaign included: 

  • more than 400,000 conversions a month
  • 2.6 million+ total user inputs
  • A 1-minute average engaged with the chatbot

Learn more about this case study here.  

Final thoughts 

IBM Watson Advertising offers a suite of cognitive advertising solutions that are designed to create personalized and engaging experiences with consumers while optimizing employees’ time with the help of AI and cookieless targeting. Get started with one of our cognitive ad solutions.

  • Conversations: IBM Watson Advertising Conversations is an award-winning AI-powered solution that enables brands to have personalized 1:1 conversations with consumers. It is a cookieless AI solution backed up by IBM Watson Natural Language Understanding that can be used on various platforms. 
  • Accelerator: IBM Watson Advertising Accelerator uses dynamic creative optimization (DCO) for digital display, video and OTT to help exceed your campaign goals and reveal robust creative insights. It uses machine learning to understand real-time consumer engagements to predict the best creative for each user. 
  • Predictive Audiences: Through AI, advertisers can better predict who is more receptive to specific messaging to deliver the right ad to the right client at the right time. The ads that get in front of consumers have information they typically want to see, which can lead to more clicks and conversions. 
  • Weather Targeting: IBM Watson Advertising Weather Targeting combines the power of weather’s ability to drive emotion and action with IBM’s AI capabilities to model and train algorithms. 

Ready to learn more about the benefits of cognitive advertisements? Request a demo today!

 

 

1 State of Engagement report, Marketo https://www.marketo.com/analyst-and-other-reports/the-state-of-engagement/

2 State of the Connected Customer report, third edition; Salesforce Research, conducted April 2019

https://www.salesforce.com/form/conf/state-of-the-connected-customer-3rd-edition/?leadcreated=true&redirect=true&d=cta-body-promo-54&nc=7013y000002lO7sAAE 

3 The State of Personalization report 2021, Twilio Segment https://learn.segment.com/state-of-personalization-2021

4 The performance data and client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions.