Just Add AI: How to Use AI Advertising Tools and Tactics for Ecommerce Growth

If the keynote sessions at this year’s Amazon Accelerate event are any indicator, those who adapt and implement AI strategies quickly will gain a significant advantage in the ever-shifting ecommerce landscape. 

This post is one of a three-part series covering the topics and trends covered at Accelerate 2024. This post specifically focuses on AI and automation, including Amazon product updates and new generative AI tools designed to help Amazon sellers scale smarter, faster.

How Generative AI is Shaping the Future of Advertising

To dive deeper into how generative AI is transforming ecommerce advertising, we had the opportunity to hear from experts at Amazon Accelerate 2024. In the video below, Vanessa Hung (Community Engagement Director, Carbon6) sits with Tor Steiner (Head of Generative AI - Creative, Advertising, Amazon) to discuss Amazon's groundbreaking generative AI capabilities. 

They cover the latest tools for creating ad creatives with just one click, new features like AI-powered video generation, and how these advancements are unlocking opportunities for both small and large businesses.

As highlighted in the interview, generative AI is making it easier than ever for advertisers to create high-quality ad creatives and launch campaigns quickly. Now, let's explore some specific AI tools and tactics from Amazon that can help sellers leverage this technology for ecommerce growth.

AI and Advertising: Programmatic Ads Explained

AI advertising, also known as programmatic or machine learning-driven advertising, involves using AI to automate ad buying, targeting, creative development, and performance optimization. It leverages algorithms, big data, and predictive analytics to help advertisers make more informed decisions and increase campaign efficiency.

Amazon AI-Powered Advertising Innovations

Let’s explore the latest advancements that are transforming how sellers advertise and optimize their campaigns with AI.

AI-Powered Video Generator

Amazon's AI-powered video generator transforms a single product image into engaging video content for Sponsored Brands campaigns. This tool streamlines the ad creation process, offering high-quality videos that can significantly boost engagement and conversion rates.

AI for Listing and Detail Pages

AI-driven enhancements now assist with product listings, helping create compelling product titles, bullet points, and descriptions, and even allowing bulk listing creation. This capability is a powerful tool for improving product visibility and ad performance, ensuring your listings are optimized for search—essential for successful advertising.

Advanced Audience Segmentation and Tailored Promotions

Amazon has introduced advanced audience segmentation and customer journey analytics, allowing sellers to tailor promotions with more precision. These capabilities enable advertisers to create goal-based promotions that reach high-intent shoppers, whether they’re focused on acquiring new customers, retaining existing ones, or re-engaging previous buyers, maximizing ROI and reducing wasted ad spend.

Amazon’s DSP Enhancements

Amazon’s recent enhancements to its Demand-Side Platform (DSP) present a significant opportunity for multichannel merchants, particularly those participating in the Buy with Prime program.

Enhanced Targeting Capabilities

The core benefit of the DSP integration with Buy with Prime (BWP) is its ability to utilize Amazon’s rich dataset, which includes detailed insights into customer preferences, purchasing behavior, and shopping habits.

Suppose a merchant sells outdoor gear, they can target ads based on specific shopping signals such as previous purchases of camping equipment or searches for hiking supplies. This level of precision enables merchants to tailor their advertising strategies, reaching the right audience with relevant messaging.

Driving Traffic Outside of Amazon

By allowing merchants to advertise outside the Amazon ecosystem, DSP enables brands to create a cohesive marketing strategy across multiple channels. 

For example, a merchant could run targeted display ads on social media platforms or other websites, driving traffic to their own site where they offer exclusive deals or products that may not be available on Amazon. This not only boosts visibility but also encourages direct customer relationships, reducing dependency on Amazon for sales.

Overall, Amazon’s DSP for BWP program marks a pivotal shift for multichannel merchants looking to optimize their marketing efforts. Gaining access to Amazon’s first-party data allows them to refine their targeting, expand their reach beyond Amazon, and create more meaningful connections with customers.

Generative AI in Advertising

Amazon has introduced generative AI tools that create image and video assets for ads, making content creation more accessible for all brands, especially SMBs. These tools generate ad-ready lifestyle images and videos, significantly enhancing the quality and variety of ad creatives to keep campaigns fresh and engaging.

Project Amelia: AI Assistant for Sellers

Amazon’s Project Amelia serves as an AI-based selling expert that offers immediate assistance, recommendations, and tool guidance across various aspects of your Seller Central experience. While it isn’t strictly an advertising tool, Amelia can be a valuable sidekick for optimizing ad campaigns, providing suggestions on inventory demand, pricing, and more. It takes the guesswork out of critical decisions, giving you data-driven insights that save time and improve your overall Amazon selling experience.

AI for Solving Ecommerce Advertising Challenges

As ecommerce grows more complex, advertisers face challenges that can hinder their ability to reach the right audience, manage campaigns efficiently, and maximize ROI. AI offers the solution to these challenges, providing tools that can streamline processes, improve targeting, and enhance overall campaign performance. Here’s how AI addresses some of the most common advertising challenges.

Data Overload

With vast amounts of data available, understanding what's relevant can be overwhelming for sellers. AI tools can process large volumes of data, extracting meaningful insights and identifying patterns in ad performance automatically. For example, helping you identify ads with a high click-through rate and a low conversion rate that could indicate your ads are attracting the wrong audience.

Understanding Customer Journey

Mapping the customer journey can be complex, but AI-powered tools now analyze interactions across multiple touchpoints, offering a clearer picture of how ads and channels contribute to conversions—insights that were once accessible only to data scientists.

Using Attribution Models

Understanding which ads lead to conversions is essential, but pinpointing the most effective touchpoints can be difficult. However, AI-driven attribution models simplify this process by accurately measuring the impact of different marketing efforts, helping you allocate your ad spend more effectively.

Targeting the Right Audience

Precision is key to reaching the right audience, and AI’s predictive analytics and machine learning are great at analyzing consumer data to understand behavior and preferences with accuracy. In fact, a McKinsey study found that 71% of consumers expect personalized interactions from companies, making AI-driven targeting more important than ever.

Reducing Wasted Ad Spend

Inefficient targeting often means flushing money down the toilet. AI-driven algorithms prevent this by optimizing targeting, bidding strategies, and ad placement in real time, even adjusting for the most effective times of day. This ensures every dollar works harder, maximizing your campaign's impact.

Improving Shopper Insights and Feedback Loops

AI tools analyze customer reviews and social media sentiment, extracting actionable insights to guide future product and advertising strategies. This feedback loop allows you to continuously refine your product and campaign strategy.

Ad Copy and Creative Optimization

AI models like natural language processing (NLP) can generate ad copy that resonates with consumer preferences, ensuring your message hits the mark. For exemple: AI-driven platforms like Meta's Advantage+ use machine learning to optimize creative assets, testing variations and adjusting bids in real-time.

Reducing Cart Abandonment

Cart abandonment is a significant issue, with rates around 70% on Amazon and 80% on Shopify. AI-powered tools help by sending personalized follow-up emails, targeted discounts, and retargeting ads at optimal times, encouraging customers to return and complete their purchase.

Combating Ad Fatigue

Keeping ads fresh is vital to combatting ad fatigue by continually refreshing ad creatives, headlines, and targeting parameters. While the average seller might create a handful of variations, AI can generate endless options, with Amazon's AI-powered Dynamic Creative Optimization (DCO) tailoring ads based on viewer behavior to keep them engaging and effective.

Scaling Campaigns Efficiently

AI-powered platforms centralize campaign management by unifying audience targeting, creative assets, and budget allocation across multiple channels. This omnichannel approach allows you to seamlessly manage and optimize campaigns in one place, ensuring consistent messaging and efficient scaling without the hassle of juggling multiple platforms.