Artificial Intelligence — A Game-Changer for Paid Search?

AI can help search advertisers address challenges such as limited performance data, and automate decision-making to optimize their bids.

Artificial Intelligence — A Game-Changer for Paid Search?
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You know artificial intelligence is a game changer for the advertising industry when the acronym “AI” is actually dubbed “Marketing Word of the Year,” as it was last year by the Association of National Advertisers (ANA).

With 80 percent of marketing executives saying they think AI will transform the marketing industry by 2020, you’ll want to know how to make AI work for you and be part of that transformation. We’re already witnessing game changers in the field of search advertising.

AI technology is improving paid search by automating complex decisions utilizing vast amounts of data. This helps address challenges such as data complexity and data sparsity. It also means companies can gain better insights from intricate data relationships that are otherwise hard to see. This lets them improve the performance of their campaigns and optimize to more keywords that will generate revenue and provide the desired conversions. Advertisers are using AI to optimize their investments, and are boosting their advertising ROI as a result.

AI can sort through massive amounts of data and make the right trade-off decisions. It also can help by automating decisions that are too complex for humans, and, as a result, drive the best possible performance.

The typical search account has millions of keywords. If you layer on multiple search engines and campaign settings, and dimensional targeting data (like audience and device), you suddenly have billions of data points or decisions.  There’s too much data to analyze manually — billions of combinations and data points that include dimensional, geographical, device and audience data, match types, bid modifiers, and data from multiple inventory sources. While a human can’t sift through all that data in any reasonable amount of time, using AI allows you to automate the process and move forward with the best decision in real time.

AI helps solve three key challenges in paid search advertising:

  • Sparse conversion data. In some cases, as with long-tail keywords where you have a lower volume of searchers, there is limited performance data, and less data makes it more difficult to optimize your bids. AI solves this challenge by using other data points, such as site engagement activity, to drive better decision-making.
  • Fluid search campaigns and constantly evolving data. In a live campaign, you can modify bid amounts throughout the day. But it’s not efficient to spend your time watching ad performance all day long. Use AI to run simulations, make long-term forecasts, and automatically adjust your bids throughout the day, depending on keyword performance.
  • Intricate relationships between data and keywords. In situations where conversion data is sparse, you can apply what you learn from keywords that have lots of performance data to keywords with limited performance data. AI can help you make predictions on how to drive better performance by examining keywords with similar engagement rates or similar meanings.

How Crocs masters paid search, thanks to AI

AI has driven business results for several of our customers. Crocs, the casual footwear company, provides a compelling example of the benefits of AI with paid search. Crocs, which became a $1 billion business in less than 10 years, currently reaches more than one-third of the world’s population through its e-commerce sites globally.

With so much growth in so little time, initially Crocs was afforded the luxury of focusing their time and budget on lower-funnel marketing channels and relying on PR and word-of-mouth to drive brand awareness and feed the consumer funnel.  As Crocs matured as a brand they recognized the need to shift its marketing spend up the funnel, increasing consideration while continuing to drive efficient revenue growth. This ensures the long-term health of the organization by bringing new consumers to the brand while maximizing conversion in the short-term to meet revenue goals.  Considering that it can cost as much as 5 times more to acquire a consumer than to retain one, this is easier said than done.

Driving all of Crocs’ digital marketing decisions is the concept of 1:1 marketing through personalization, with the ultimate goal of showing the right message to the right person at the right time in the right medium for the right price.  In order to shift budgets up the funnel without significantly decreasing ROAS, direct response channels such as branded paid search must be as efficient as possible.

Billy Chambers, senior digital marketing manager at Crocs, shared at Adobe Summit how the company used AI to increase its conversion rates and improve performance without having to increase its marketing spend. Crocs used our integrated advertising stack, including Adobe Analytics, from which Adobe Sensei — the AI and machine-learning technology that supports many of our products — gets the data to inform its intelligent models.

It’s important to mention that it is key to have an account structure that matches as many queries to exact-match keywords as possible.  Not only does this decrease cost per click and increase conversion rates, but, maybe more importantly, it also improves the accuracy of Adobe Sensei’s models. And when accuracy is higher, Croc’s simulations and forecasts are more accurate and its bid optimizations are more successful.

Our products have helped customers like Crocs solve some of its biggest challenges with search advertising, including:

  • Overcoming sparse conversion data to drive ROI and more personalization. Adobe Advertising Cloud Search is natively integrated with Adobe Analytics, allowing Crocs to access over 2,000 engagement metrics, including return visits, number of page views and time on site, all of which are powerful data signals showing intent that Crocs can use to convert more customers in the future. Segments from Audience Manager and Adobe Analytics allow for optimization of the search bid and creative based on the audience and their interests, as opposed to just a keyword.
  • Better decision-making on marketing spend. AI helps Crocs make better decisions when it comes to day-of-week spend management for search advertising. Crocs is able to adjust its budget depending on the season, special promotions, and day of week to maximize its ROI for each of these time-based factors.  For planning, Crocs can run simulations to see the impact of different budget scenarios on predicted outcomes including clicks, conversions, and revenue before investing real marketing dollars.
  • Improved understanding of keyword relationships. Crocs uses AI to identify more revenue-driving keywords. AI analyzes relationships and borrows from keywords with similar semantic meaning or performance to make the best bid.

By using Adobe Sensei to optimize its paid search campaigns in Advertising Cloud, Crocs is realizing improved click-through and conversion rates, and driving more web traffic at a lower cost, allowing them to shift marketing spend up the funnel. Adobe’s unique data access via integrations with Adobe Analytics and Adobe Audience Manager gives fuel to Adobe Sensei performance optimization, performance forecasting, and spend recommendations.  The company uses Audience Manager and Adobe Analytics to better personalize the ad experience for their customers with automated Remarketing Lists for Search Ads (RLSA). The company is making better decisions, improving the customer experience, and increasing its brand awareness and consideration from customers — something we know AI can help do for many other brands.

Search advertisers who aren’t yet using AI are missing out on efficiencies that increase the value of their data and the overall effectiveness of having a data-driven campaign. AI and machine-learning capabilities in Adobe advertising solutions can help advertisers drive better results from their search campaigns. And as Crocs shows, all for the same — or even less — investment.

Adobe Advertising Cloud Search and Adobe Sensei reduce the amount of required manual setup and optimization so advertisers can focus more time on planning and strategy.  With Adobe’s unique access to data and audiences, Advertising Cloud Search and Adobe Sensei provide a combination for marketers that is unparalleled in the industry.

Read more stories from our artificial intelligence series and get more information about Adobe Sensei. You can also watch Pete’s Summit session about AI in Search at Summit Online.

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