The State of AI in Video Advertising: What's New, What's Working, and Why You Should Care

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Cory Treffiletti
April 5, 2024
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Blog Author Icon
Cory Treffiletti
CMO, Rembrand
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As a marketing leader at a Fortune 1000 company, staying ahead of the curve is crucial. I’ve personally been on both sides of the conversation, leading teams for the disruptive start-ups as well as leading the big brands and evaluating the start-ups and vendors looking to work with us.  From my point of view, you need to know what's new, what's working, and most importantly, why you should care. Then you’re informed enough to make a decision on what to do.  When it comes to the state of AI in video advertising, there are some significant developments you can't afford to ignore. The biggest driver of these advancements is that we are not listening to the clear signal from our viewers - that they skip the ads we show them at an alarming rate.  The rapid advancements in AI technology are reshaping the video advertising landscape, offering new opportunities for brands to connect with their target audiences in more meaningful and effective ways.  In doing so we are uncovering new ways to reach the audience in a format that is more appropriate for the context of the day. 

What's New?

  1. The Growth of Shoppable Video Ads on Connected TV (CTV): The rise of Connected TV has opened up a whole new world of possibilities for video advertising. With more consumers shifting their viewing habits to ad-supported content on CTV platforms like Hulu and Roku, brands now have access to a massive and highly engaged audience. What sets CTV apart is the ability to deliver shoppable video ads that seamlessly blend content and commerce. The idea of these ads are not new, but the technology to enable them is.  These interactive ads feature clickable elements, such as links or QR codes, that allow viewers to explore products or add them directly to their cart without interrupting their viewing experience. These elements are beginning to be dynamically targeted to the audience who sees them.  What’s more, these solutions are able to work across platform as more viewers are consuming this content on mobile and connected TV’s than they are on a desktop.  This changes the way the audience interacts with the content dramatically.  In the past month alone, major CTV platforms have significantly expanded their shoppable ad formats, introducing game-changing features like in-ad product carousels and advanced targeting options based on rich viewer data. For Fortune 1000 brands focused on driving measurable results and bridging the gap between brand exposure and direct action, shoppable CTV ads are a must-have in their video advertising arsenal.

  2. The Emphasis on Performance-Based Video Advertising: In today's data-driven world, accountability and demonstrable ROI are non-negotiable for Fortune 1000 companies. Every advertising dollar spent must be justified, and that's where performance-based video advertising comes into play. Traditionally, video was exempt from the halo of short-term performance, but that expectation has changed.  This approach shifts the focus away from vanity metrics like impressions and towards driving specific, measurable outcomes that directly impact the bottom line. Performance-based campaigns are structured around clear, action-oriented goals such as conversions, app installs, website traffic, or any other tangible business objective and video can absolutely deliver these metrics when enabled properly. Advertisers pay based on the results achieved, whether it's cost-per-click, cost-per-acquisition, or any other performance metric that aligns with their goals. AI and machine learning play a pivotal role in this process, continuously analyzing campaign data and automatically optimizing ad delivery to maximize the desired outcomes. The platforms where advertisers spend their video advertising dollars are constantly working to improve these features and enable more targeted delivery and attribution.  The past month has seen the emergence of new performance-based video ad formats and sophisticated measurement tools that enable brands to track and attribute results across multiple platforms and channels. By tying advertising spend directly to business results, performance-based video advertising provides Fortune 1000 brands with the transparency and accountability they need to make informed decisions and ensure their budgets are being utilized effectively.

  3. AI-Powered Brand Placement in Video: Picture this: your brand seamlessly integrated into the content people love, without disrupting their viewing experience. That's the magic of AI-powered brand placement. Innovative solutions like Generative Fusion™ (from Rembrand) enable branded objects, such as logos, products, or even virtual billboards, to be inserted into video content during the post-production process. This means brands can achieve prominent visibility within the content itself, without the need for traditional ad breaks. These models were expensive or required long lead times in the past, but the emergence and expansion of AI tools allows advertisers to execute these insertions easily and quickly while maintaining a very natural feel to them.  This creates a non-intrusive and immersive advertising experience. This approach offers a win-win-win scenario. Creators can focus on crafting compelling content without worrying about explicit brand integrations that can appear non-authentic or impede the development of their content. Advertisers can select the most suitable creators and content that align with their brand values and target audience, even after the content has been produced and execute in a shorter window. Viewers can enjoy their favorite content uninterrupted, while still being exposed to brand messages in a subtle and organic way.  This has proven effective at traditional metrics like awareness and recall, but also in brand favorability by aligning the brands with the content and creators that audiences love. The power of AI-powered brand placement lies in its ability to generate positive brand associations, drive engagement, and leave a lasting impact on the audience. Full disclosure: I'm the CMO at Rembrand, a company at the forefront of this exciting technology. If you'd like to explore how AI-powered brand placement can elevate your video advertising strategy, I'd be delighted to hop on a call and show you more. Feel free to grab a slot on my Calendly, which I'll drop in the first comment below.

What's Working?

  1. Hyper-Targeted Audience Segmentation: One of the biggest advantages of AI in video advertising is its ability to analyze vast amounts of data and identify highly specific audience segments. Gone are the days of broad demographic targeting, replaced with a fine tooth, hand-to-hand combat approach that is enabled by technology. With AI-powered segmentation, Fortune 1000 brands can now target their ads based on a wide range of parameters, including niche interests, behavioral patterns, purchase history, and even predicted future actions. Plus, they can do so quickly and easily by allowing the algorithms to hypothesize and implement rather than crunching the data themselves.  By leveraging machine learning algorithms, brands can uncover hidden audience insights and create highly personalized ad experiences that resonate with each individual viewer. This level of hyper-targeting ensures ads reach the people who are most likely to engage and convert, maximizing the effectiveness of every advertising dollar spent. AI-powered segmentation also enables brands to adapt their targeting in real-time based on audience feedback and campaign performance, continuously refining their approach to drive better results.

  2. Dynamic Creative Optimization (DCO): Crafting the perfect video ad is both an art and a science. Dynamic Creative Optimization (DCO) is an AI-powered approach that takes the guesswork out of ad creative by automatically generating and testing multiple variations of a video ad. DCO has been around in some form for many years, primarily as advanced A/B testing with machine learning alongside it, but in recent years we see more generative AI solutions creeping into this arena to generate and place ads based on the audience behaviors more directly.  DCO platforms use machine learning algorithms to analyze various ad elements, such as headlines, visuals, calls-to-action, and even audio, to determine which combinations resonate best with different audience segments. They can even forecast which ads will work better and steer you towards the best combinations.  The AI then continuously optimizes the ad delivery, ensuring the best-performing variants are shown to the right people at the right time. This dynamic approach to ad creative has proven to be highly effective in boosting campaign performance, as it allows brands to deliver highly relevant and personalized ad experiences at scale. With DCO, marketers no longer have to create dozens of individual ads to cater to different audiences. Instead, they can focus on developing a strong creative concept and let the AI handle the optimization process, saving time and resources while driving better results.

  3. Performance Prediction: Imagine having a crystal ball that could predict the success of your video ads before they even go live. That's essentially what AI-powered performance prediction tools can do (as previously mentioned, but outlined in more detail here). By analyzing historical campaign data, audience insights, and market trends, these advanced AI models can forecast the potential performance of new video ads with impressive accuracy. This predictive capability allows Fortune 1000 brands to make data-driven decisions and optimize their ad creative, targeting, and budgeting strategies before launching a campaign. By simulating various scenarios and testing different ad elements, brands can identify potential issues and make proactive adjustments to maximize campaign ROI. Performance prediction also helps brands allocate their advertising budgets more effectively, focusing on the channels and tactics that are most likely to deliver the desired results. With the power of AI, brands can take the guesswork out of video advertising and make informed decisions that drive measurable business impact.

Why Should You Care?

  1. Increased Efficiency and ROI: In the fast-paced world of video advertising, efficiency is key. AI-powered solutions automate many of the tedious and time-consuming tasks involved in campaign planning, execution, and optimization. From audience targeting and ad creative generation to bid management and performance tracking, AI streamlines the entire video advertising workflow, saving marketers valuable time and resources. But efficiency isn't just about doing things faster; it's also about doing things smarter. AI algorithms continuously learn from campaign data, identifying patterns and insights that humans might overlook. This enables brands to make data-driven decisions and optimize their strategies in real-time, resulting in higher campaign performance and a stronger return on investment. One more thing - these new models ensure your ad is actually seen and not skipped.  The signal has been clear that viewers do not like being interrupted, and yet we choose to ignore that signal to the detriment of our brands.  This has to end, and using AI to help eliminate that problem completely.  By leveraging AI, Fortune 1000 brands can achieve more with less, allocating their budgets more effectively and driving meaningful business results.

  2. Unmatched Personalization at Scale: In today's crowded digital landscape, personalization is no longer a nice-to-have; it's a must-have. Consumers expect brands to understand their unique needs and preferences and deliver tailored experiences across every touchpoint. However, achieving true personalization at scale is a daunting task, especially for Fortune 1000 brands with massive audiences. That's where AI comes in. AI-powered video advertising solutions enable brands to deliver highly customized ad experiences to millions of viewers simultaneously. By analyzing vast amounts of data on individual viewer behavior, preferences, and context, AI algorithms can dynamically adapt ad content, messaging, and targeting to resonate with each viewer on a personal level. This level of granular personalization not only captures attention but also drives deeper engagement, higher conversion rates, and long-term brand loyalty. With AI, Fortune 1000 brands can deliver the right message to the right person at the right time, at a scale that would be impossible through manual efforts alone.

  3. The Competitive Edge: The AI revolution in video advertising is no longer a distant future; it's happening right now. As more and more brands recognize the transformative power of AI, adoption rates are skyrocketing. According to recent industry reports, the majority of Fortune 1000 companies are already investing in AI-powered advertising solutions, and those investments are expected to grow exponentially in the coming years. It certainly checks a box in your strategy document, but it also allows you to do more with less.  AI doesn’t replace people, but it does replace responsibilities and mundane tasks, freeing people up to do more.  In this rapidly evolving landscape, brands that embrace AI and integrate it into their video advertising strategies gain a significant competitive advantage. By leveraging AI-powered tools and techniques, these brands can stay ahead of the curve, deliver cutting-edge ad experiences, and drive superior campaign performance. On the flip side, brands that lag behind in AI adoption risk falling behind their more innovative competitors. As consumer expectations continue to rise and the video advertising landscape becomes increasingly crowded, relying on traditional, manual approaches will no longer suffice. To stay relevant and competitive, Fortune 1000 brands must embrace AI and make it a core component of their video advertising strategy.

The world of video advertising is undergoing a profound transformation, and AI is at the forefront of this revolution. From shoppable CTV ads and performance-based advertising to AI-powered brand placement and hyper-targeted audience segmentation, the possibilities are endless. As a marketing leader at a Fortune 1000 company, it's crucial to stay informed about these developments and adapt your strategies accordingly. By leveraging AI-powered solutions, you can drive unparalleled efficiency, personalization, and campaign performance, all while staying ahead of the competition.

But the AI revolution in video advertising is not just about technology; it's about creating meaningful connections with your audience. By harnessing the power of AI, you can deliver ad experiences that resonate on a deeper level, forging strong emotional bonds between your brand and your customers. AI enables you to be there for your audience in the moments that matter, with the right message and the right creative, fostering long-term brand loyalty and advocacy.

As you navigate this exciting new landscape, remember that AI is not a replacement for human creativity and strategic thinking. It's a powerful tool that augments and enhances your abilities, allowing you to focus on what truly matters: crafting compelling brand stories and building lasting relationships with your customers.

So, what's your take on the state of AI in video advertising? How are you incorporating these cutting-edge technologies into your marketing mix? Are you ready to embrace the AI revolution and take your video advertising to the next level?