AI will soon dominate ad buying, whether marketers like it or not

Subscribe to enjoy similar stories. Advertisers are grappling with trade-offs of AI-powered ad planning and buying tools for automating nearly every step in digital ad campaigns. The tools work by asking buyers for parameters for campaigns, such as budget limits and sales goals, then allow algorithms to decide where ads will run, who they target and, in some cases, how ads appear.

Buyers often can’t find out exactly what decisions the artificial intelligence implements, but they can essentially press a button for campaigns to run on their own. AI tools can make a campaign more efficient, according to their developers, which include pioneers Google and Meta Platforms. TikTok, Amazon and Pinterest have also released their own such tools over the past year.

The tools can also help developers sell advertising more effectively to small and midsize businesses that provide a majority of their ad revenue and that can’t develop complex campaigns on their own, said Karsten Weide, an advertising technology consultant. Underwear brand Saxx now spends 20% to 30% of its Meta ad budget on the company’s AI tools. For many advertisers, however, the lack of control is disconcerting.

“It’s almost like a necessary evil," said Nicole Fisch, senior vice president of marketing at baby products brand Lalo, which uses Google’s AI-fueled Performance Max campaigns to run ads online. “You see the numbers and it does drive sales, but…at what cost?" Reports from Google sometimes show higher returns for Performance Max campaigns than non-AI efforts. But Lalo’s team can’t tell if their ads reached the company’s core audience of design-focused parents, nor can they actively target specific websites and apps those people may frequently visit, according