By Matt Nash, UK MD of Scibids
With the festive shopping season in full swing, brands are having to come to terms with shoppers cutting back on their spending in the face of the cost-of-living crisis. In the so-called ‘golden quarter’ for retail, 60% of consumers are reducing their spending on non-essential items, and it’s likely that retailer revenues are going to feel the pinch.
Many retail brands will be hoping for things to improve in 2023 but, unfortunately, with inflation only going to continue at high rates, it’s safe to assume that consumers will be tightening their purse strings for a while longer. And it’s likely that brands will be looking to emulate this by lowering their digital media spend.
As consumers become more frugal, and brands seek ways they can lower their own expenditure, there will be less data available for retail marketers to optimise their media campaigns. As a result, marketers need to ensure their campaigns are working as efficiently as possible – and that’s where artificial intelligence (AI)-powered technologies have a significant role to play in every digital marketing strategy.
High-quality tailored intelligence
Retail brands need to find ways to make their spend work harder than ever to maintain conversions and deliver return-on-investment (ROI). Brands can do this by using AI, utilising the advanced feature sets developed by DSPs that enable brands to customise their media buying approach and create a competitive advantage.
For instance, AI-powered customisable algorithms can ingest and combine media and sales data in real-time, enabling retailers to limit media waste and drive conversions by identifying patterns of success based on highly-specific definitions of what quality user engagement looks like. Using this data, brands are able to inform the design of future campaigns and ensure that more robust ad decisioning is being made.
One way this is able to happen is by the AI analysing ad impressions of a campaign against a set of KPIs, and then this being used to produce insights on which part of the campaign achieved the best results in relation to those weighted objectives.
In the past, this would’ve been an incredibly tedious task undertaken manually, and it would’ve been nigh-on impossible to truly deliver the best results at scale. However, with customisable AI technology, more calculations can be run in seconds than a human could process in their entire lifetime, thus increasing the efficiency and effectiveness of optimising campaigns.
This ability to train algorithms to dynamically optimise against specific business outcomes can be done in real-time, and provide retail brands with the opportunity to achieve the maximum possible scale in the most efficient manner.
A solution for now and beyond
The ability to ingest and combine media and sales data in real-time means that these AI-powered custom bidding algorithms are able to limit media waste, boost conversions, and help brands to maintain their competitiveness, even beyond the difficult economic climate. But it also future-proofs a brand’s strategy in terms of the privacy-first world.
The customisable algorithms rely on the context of the advertising, rather than using any personal data. As such, retail advertisers can easily move away from any reliance on third-party data, making it the perfect solution for a world without third-party cookies, and fewer trackers and identifiers.
The coming year is possibly set to be even more turbulent than recent times for retail brands, with a combination of inflationary pressure within the ad market and lower consumer spending leading to increased caution. AI can provide the solution to clearing any hurdles that brands may face – both in 2023 and beyond.
Custom bidding algorithms are able to overcome the availability of less online consumer engagement data, and ensure that media waste is reduced and viewable reach is increased by only delivering ads to the people most likely to buy products or services.
Even through these difficult times, retail brands have an opportunity to stand out from the competition, deliver ROI, and continue to drive conversions. And AI technology, which is critical to the modern ad stack, is the driving force to make this a reality.
*Scibids is a client of Bluestripe Communications, owned by Bluestripe Group, owner of ECA