How AI is Transforming Advertising and Marketing: A Q&A with IBM’s Jeremy Hlavacek

As artificial intelligence continues to improve, professionals in nearly every industry increasingly see AI as an opportunity to fundamentally help change the way they work and rethink how they engage with machines. This is especially true for advertiser and marketers—professions that are increasingly driven by technology.

Thanks to its reliance on large amounts of data, AI heralds a future full of exciting transformations for advertisers and marketers. AI can provide better campaign analytics, personalized experiences at scale, predictive audience segments, and more.

To bring this promise closer to reality, IBM recently announced a series of new AI tools and solutions for advertisers and marketers as part of Advertising Week New York, the industry’s major conference.

We sat down with Jeremy Hlavacek, Head of Revenue at IBM Watson Advertising, who spoke at the conference, to discuss what the latest announcements mean for the industry, IBM’s growing bet on ad-tech, and his vision of how AI is being used to help transform advertising and marketing.

How do you view AI's role in advertising and marketing?

Technology has already profoundly transformed the advertising and marketing industries. Advertising has always prided itself on being one of the most creative industries. However, from bid rate management to programmatic targeting and A/B optimization, and now AI, the scientific side of advertising is showing that it is equally important as the art.

With AI, we finally have the missing piece of technology that professionals can use to help them build campaigns that are more efficient and effective. It can improve audience targeting, not only helping brands identify, but also find new audiences to target, and it can help brands create personalized experiences at scale, which has, in the past, been a major challenge.

Personalization at scale is one of the things we aimed to tackle when we launched Watson Ads in 2016—the industry's first AI-powered interactive ad unit. The solution allowed consumers to interact directly with brands by having a personalized two-way conversation within an ad experience. For brands, AI-powered ads are akin to running a focus group at unprecedented scale: The more a consumer interacts with the ad, the more insights a brand can use to help improve future campaigns. For consumers, they get a superior customer experience with a brand. This increases the value of the ad for both the marketer and the consumer.     

How will AI impact advertising and marketing in the future?

AI and its related technologies will run parallel to nearly all advertising and marketing tactics in the future. We're only at the cusp of seeing what AI can do. And as the technology evolves, brands will continue to look to AI to learn more about their customers, rapidly access insights to help make decisions and create compelling, personalized customer experiences at scale.

Our vision is to equip advertisers with the AI tools they need to help unlock data; build smarter and more effective campaigns; develop deeper relationships with customers; and free up valuable time so they can focus on higher value tasks.

Ultimately, this will help today’s ad professionals retain the creative aspect that has historically been the defining feature of the advertising industry. One of the interesting new challenges for the modern advertising professional is: how do I get creative using the powerful AI tools that are available?

IBM just announced that companies like LEGO Systems and BEHR are using or plan to use IBM's latest AI-powered ads. What key industry challenges do AI-powered ads solve?

This week, we introduced Watson Ads Omni, which is a new extension to the popular Watson Ads. This means that LEGO Systems will have the freedom to deploy AI-powered ads on any digital site—not just The Weather Channel app and weather.com —but anywhere that's within the reach of their advertising ecosystems. LEGO Systems is the first brand to run a Watson Ads Omni campaign, which will be available just in time for Black Friday and throughout the holiday season, when the when the majority of annual toy retail sales take place.

Watson Ads, which was first announced in 2016, provides brands the ability to have meaningful one-to-one conversations at scale with consumers wherever they may be in their path to purchase. This technology is incredibly useful for explaining product features and capabilities and answering consumers’ questions.  BEHR Paint recently worked with us to create an AI-powered ad that aims to make the interior paint color selection process easier for individual consumers. Using a combination of Watson’s Natural Language Processing and Tone Analyzer capabilities, BEHR will be able to deliver personalized BEHR paint color recommendations based on the mood and feeling a consumer desires for their space. And the consumer gets the perfect colors and tones for their home!

What results have you seen with Watson Ads?

We have already begun to see that consumers are spending more time with these AI-powered ads than with other digital ads. We’ve seen time spent with Watson Ads exceed the interaction benchmark for digital rich media display creative by as much as 6x.

Consumers are engaging in the conversation feature, watching videos, asking for coupons, and exploring products in a product carousel, all at their own pace and in their own way. They seem to appreciate getting more detailed, useful and relevant information from a piece of advertising. But most importantly, brands are generating product and audience insights that they are using to inform their strategy.

This week, brands talked a lot about ways to reduce waste in advertising spend. Is this something AI can help with?

That's a prominent topic. On average, only about 50 cents of every ad dollar spent appears in front of the desired target audience. The proliferation of ad tech solutions in the advertising value chain has been helpful in some cases, but has also gone too far in other cases. I, along with a lot of others, strongly believe that infusing AI into programmatic can help optimize ad spend and reduce waste. AI, however, cannot realistically fix this on its own. I also think Blockchain and other technologies are part of the solution as well because they help provide transparency and build trust to what can be a ‘murky’ supply chain. This is what IBM and Mediaocean have recently teamed up to do.