How AI-powered hyper-personalization is revolutionizing video ads industry

Authored by Neha Soman, Co- Founder and CBO, Hypergro.ai

In modern marketing, personalization is no longer optional. Recent studies have elucidated that over two-thirds of consumers expect businesses to deliver personalized advertisements and interactions. Consequently, for brands seeking to expand their reach while maintaining effectiveness, adopting AI tools has become imperative. This demand has spurred the growth of AI-powered marketing tools, with hyper-personalized video ads being the most notable recent innovation. These tools not only allow brands to create more relevant and engaging content but also enhance conversion rates. AI-driven hyper-personalization marks a significant shift in how brands connect with their audiences. This article will delve into how AI-powered hyper-personalized video ads are transforming the video advertising industry and their future potential.

A New Era in Consumer Engagement

Traditional video advertising has relied on targeting broad demographic groups, with ads appealing to large segments of the population. While this approach has had some success, it often fails to address the specific preferences and needs of individual consumers. This becomes evident in the growth of the Indian advertising market, which is expected to grow by 11.8% to ₹1,22,155 crore in 2024, with the traditional media ad revenue forecasted to grow by 8.4% while modern media marketing is anticipated to grow by nearly 16%.

It’s well understood that video ads tailored to each user’s preferences and behaviors can create content that resonates more deeply on an individual level. However, achieving this level of personalization has been a daunting, if not impossible, task. AI tools have revolutionized this approach, expediting the processes from creating taglines and ad copy to designing visuals and video creation.

AI-powered hyper-personalization pushes this further with segmentation that leverages real-time data, such as browsing history, social media activity, purchase behavior, and environmental factors, like time and location, to deliver highly customized content. Brands have benefited extensively through this tech, with companies like Klarna reporting saving $10 million annually by using GenAI, reducing reliance on external marketing partners.

The Working of AI-Powered Hyper-Personalization

The most cumbersome task of hyper-personalization is analyzing vast datasets to uncover patterns and trends in consumer behavior that are handled by AI algorithms, enabling brands to precisely segment audiences and target specific groups with customized messaging. Then, AI tools can generate multiple versions of a single video ad, each customized for different audience segments. This dynamic approach ensures that viewers are presented with the most relevant version of the ad. For example, a clothing brand can create video ads highlighting winter wear for colder regions and summer outfits for warmer areas.

Then, it also includes real-time optimization of video ads based on viewer interactions and feedback. If an ad is underperforming, AI can automatically adjust its content, targeting, or delivery strategy to improve results, ensuring continuous enhancement over time. It can further forecast future consumer behavior by analyzing historical data and current trends, allowing brands to anticipate and meet the evolving needs of their audience. A travel company, for instance, can predict when a viewer is likely to plan their next vacation and deliver timely ads with personalized travel deals.

This AI-powered approach to hyper-personalization can lead to significant reductions in marketing costs, with reports suggesting up to a 20% decrease in customer acquisition costs (CAC). Businesses using AI for personalization often see a substantial improvement in ROI while saving up to 90% of the time typically spent on manual customization. According to a recent McKinsey report, generative AI (GenAI) in marketing and sales could contribute up to $3.3 trillion annually in global productivity. However, quality control remains a challenge, as AI may produce content that is inaccurate, off-brand, or irrelevant. To mitigate such issues- human oversight is crucial, with professionals reviewing and refining AI-generated content to ensure brand consistency and accuracy.

Outlook of this Innovation

As AI technology advances, the future of hyper-personalized video advertising appears increasingly promising. Key trends and developments to monitor include:

• Immersive Media: We may start seeing more immersive experiences in ads, enabled by GenAI, where users can interact with products or services in a virtual space tailored for them by leveraging consumer data. Users might try on clothes or view furniture as an interactive ad that promotes greater engagement, leading to more personalized shopping experiences.
• Growth of Conversational AI: The evolution of video ads may involve greater use of conversational AI, allowing ads to engage viewers in real-time dialogues. This interactive approach will offer a higher level of personalization, enriching the overall ad experience.
• Wider Adoption Across Industries: Although hyper-personalized video ads are currently prevalent in sectors such as retail and entertainment, their use is expected to expand into industries like healthcare, finance, and education. AI-powered video advertising will become an essential tool for organizations aiming to deliver targeted and impactful messages to diverse audiences.

By seamlessly blending creativity with cutting-edge technology, these advancements will not only enhance the effectiveness of advertising campaigns but also foster deeper, more meaningful connections with audiences. Brands that embrace this innovation will be well-positioned to thrive in an increasingly competitive and dynamic market.

 DISCLAIMER: The views expressed are solely of the author and Adgully.com does not necessarily subscribe to it.

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