AI in advertising: what it is, how to use it and what’s next 

Why AI matters in modern advertising

Advertising in a hyper digital landscape is not what it once was. Between increasing competition, content fatigue, shorter attention span and rising costs, brands face the challenge of needing to stand out while keeping up with the fast paced space of media. 

In addition to this, automation and AI in advertising has changed the way brands communicate with their audience. Advertisers are turning to these tools to generate creative and copy, as well as campaign and budget optimisation. The use of AI in modern advertising is pervasive. In fact, 91 per cent of marketers see AI integration as a key driver of the industry’s future, according to our Future of Marketing 2025 report. The use of artificial intelligence in marketing is no longer an experimental resource, it is an integral part of advertising in a modern digital landscape. 

In this article, we’ll explore:

• The benefits of AI in advertising, from personalisation to predictive analytics.
• The challenges and risks marketers need to navigate.
• Best practices to unlock the full potential of AI-driven campaigns.

What is AI in advertising? 

AI is used in marketing across various points in campaign production. Instead of relying solely on manual research, advertisers are increasingly using AI-driven tools to analyse data, generate content and automate campaign decisions.

The core technologies powering this shift include:

• Machine learning (ML): Algorithms that identify patterns in massive datasets to predict campaign performance, refine bidding strategies and improve ad targeting.
• Natural language processing (NLP): Tools that understand and generate human language, enabling applications like automated copywriting, chatbots and sentiment analysis.
• Predictive analytics: Models that forecast consumer behaviour and campaign outcomes, helping advertisers allocate budget more effectively and anticipate future trends.

While the use of automation in marketing encompasses activities like customer journey mapping, lead scoring and email workflows, AI in advertising is more tightly focused on paid media campaigns, including programmatic advertising, ad placement, creative generation and performance optimisation.

Essentially, AI-driven campaigns bridge the gap between data and creativity to ensure ads reach audiences with precision and relevance, which is increasingly difficult to achieve without intelligent automation.

Can you really use AI in advertising?

While AI may seem like an expensive technology that’s only beneficial for large companies, there are many free AI tools used across both large and small businesses. AI tools for advertising are built directly into many of the platforms that businesses of all sizes already use, making it more accessible and affordable than ever before.

Here are some of the most common tools already available to marketers:

• Google Ads Smart Bidding: Uses machine learning to optimise bids for conversions or clicks.
• Meta Ads (Facebook and Instagram): Automatically improves audience targeting, creative delivery and placements.
• LinkedIn Ads: Applies predictive analytics to match campaigns with highly relevant professional audiences.
• Canva’s Magic Design and  Text-to-Image: Free AI features to generate ad visuals quickly.
• ChatGPT: Affordable tool for generating ad copy, headlines and creative ideas at scale.
• HubSpot’s AI marketing tools: Includes free versions for ad optimisation, lead scoring and email personalisation.
• Grammarly Business: Enhances ad copy for clarity and tone using AI.

For small and medium-sized enterprises, AI is hugely beneficial for ensuring campaigns reach the right audience without overspending. For example, a boutique e-commerce brand can use predictive analytics in Google or Meta Ads to show personalised product recommendations to shoppers who abandoned their cart, or a local café can tailor ads to reach people nearby during peak hours. 

AI-driven campaigns are now a necessity for any business that wants to stay competitive in a crowded marketplace. By levelling the playing field, AI ensures that smaller brands can compete, even on a budget.

How to use AI in advertising effectively

Personalisation at scale

Consumers expect ads to reflect their needs and interests. With recommendation engines, AI-driven campaigns allow brands to suggest products or services based on browsing history or purchase patterns. Dynamic ad creatives adjust headlines, images or calls to action in real time, ensuring that every user sees a version of the ad that resonates with them. This approach makes campaigns feel personal rather than generic, even when targeting thousands of individuals.

Predictive targeting

AI enables advertisers to move beyond demographic targeting by predicting behaviours. Predictive analytics uses past interactions, purchase data and intent signals to forecast which customers are most likely to convert. This helps businesses allocate budget more effectively, reduce wasted impressions and time campaigns for maximum impact.

Programmatic advertising

One of the most established uses of AI in advertising is programmatic advertising. Real-time bidding systems use algorithms to purchase ad space in real time, ensuring that ads reach the right person, on the right platform, at the right moment. This efficiency not only saves time, but also improves return on investment (ROI) by reducing the guesswork of manual bidding.

Creative assistance

AI is not replacing human creativity, but enhancing it. Tools like generative AI platforms can quickly produce ad copy variations, images and even short-form videos. Marketers can use these outputs for brainstorming, testing and scaling creative production, while still applying human oversight to ensure brand tone and originality.

Performance optimisation

AI-powered tools excel at campaign fine-tuning. Automated A/B testing can run multiple variations simultaneously, learning which versions deliver the best results. Algorithms can then shift budget towards the highest-performing ads in real time, improving efficiency and lowering cost-per-acquisition.

Practical steps for businesses

Getting started doesn’t require you to scrap your entire advertising strategy. Businesses can easily embed AI tools into their campaign strategy right now. Here’s how:

1. Choose the right tools: Start with built-in AI features in platforms like Google Ads or Meta.
2. Start small: Test AI with one campaign, such as automated bidding or dynamic creative.
3. Measure ROI: Track metrics like click-through rate, conversion rate and cost-per-lead.
4. Iterate and scale: Once results are clear, expand AI use across multiple campaigns.

By combining human creativity with AI efficiency, advertisers can unlock campaigns that are smarter, faster and more personalised.

Is AI replacing advertising or reinventing it?

One of the biggest concerns with the rise of AI in advertising is whether it will replace jobs. While AI excels at automating repetitive tasks, analysing vast amounts of data and optimising campaigns, it cannot replicate the insight, creativity and lived experience of creatives. Rather than replacing jobs, AI is reinventing the way advertisers work, enabling them to focus more on strategy and storytelling.

Over-automation can lead to campaigns that feel robotic, generic or out of touch with reality. Without human oversight, brands risk damaging trust and alienating customers. This highlights why skills such as strategic thinking, empathy, creativity and ethical judgment remain essential in the age of AI-driven campaigns.

The future of advertising is not “AI vs human creativity”. Instead, AI is used most effectively when it complements traditional advertising practices, creating smarter, more personalised and impactful campaigns.

Benefits of AI in advertising

AI in advertising brings many advantages for businesses of all sizes, helping them work smarter. Benefits include:

• Cost efficiency: AI tools optimise budget allocation by directing spend towards the highest-performing ads, audiences and channels. This minimises wasted impressions and ensures that every penny is working harder.
• Higher ROI through smarter targeting: With AI-powered predictive analytics, advertisers can identify and reach the audiences most likely to convert. By refining targeting based on behaviours, interests and intent signals, campaigns achieve stronger results and deliver a better ROI.
• Time savings via automation: Automation takes on repetitive, manual tasks such as bidding, ad placement and A/B testing, freeing up time for marketers to focus on strategy and creativity.
• Better customer experience with personalisation: AI enables personalised advertising at scale, from dynamic creative that adapts according to audiences preference to recommendation engines that promote relevant products. 

Challenges and limitations of AI in advertising

While the benefits of AI in advertising are significant, there are also challenges and risks that businesses must consider when using it in their marketing strategies. Limitations include:

• Data privacy and compliance: AI relies on large volumes of customer data, which raises concerns around privacy. Certain countries impose strict rules on how data can be collected, stored and used. Non-compliance can result in reputational damage and financial penalties.
• Algorithmic bias and ethical concerns: AI models learn from historical data, which may contain biases. This can lead to unfair targeting or stereotyping if not monitored carefully. 
• Dependence on quality data: AI tools are only as effective as the data they are trained on. Inaccurate, incomplete or low-quality data can lead to poor predictions and wasted spend. Ensuring clean, reliable datasets is critical to success.

Performing quality checks and closely monitoring content ensures AI-driven campaigns are created responsibly and effectively.

The future of AI in advertising

As AI advances, advertising is set to transform how brands engage with audiences. Beyond automation and optimisation, AI is opening into more immersive and creative territory.

One of the biggest shifts is the rise of generative AI in marketing, enabling brands to produce ad copy, visuals and even video content tailored to different segments at scale. This will reduce creative bottlenecks and give marketers the ability to test and adapt messaging.

Another trend we can expect to see is hyper-personalisation and micro-segmentation. With new AI technology, brands can deliver highly individualised campaigns, predicting what a single user wants to see at a specific moment. For advertisers, this means higher engagement and stronger loyalty.

Emerging technologies such as AR and VR will converge with AI as we’ll see more immersive ad experiences, from interactive 3D product demos to personalised virtual shopping environments.

AI is rapidly reshaping the industry, offering more immersive, personalised and creative experiences for consumers to engage with.

Actionable takeaways

AI has quickly become a widely used tool in advertising and brands need to adapt in order to stay ahead. Here are practical steps you can take right now:

• Start small: Experiment with AI features already built into platforms like Google Ads, Meta Ads or LinkedIn before investing in standalone tools.
• Focus on personalisation: Use AI to tailor messaging and creative to cater content to specific customer segments for better engagement.
• Leverage automation: Embed AI into your daily workflow to handle repetitive tasks like bidding, ad placement and testing, while you focus on strategy and creativity.
• Prioritise data quality: Ensure your customer data is accurate to get the most from AI insights.
• Balance AI with human creativity: Use AI for efficiency and optimisation, but rely on your team’s skills for storytelling, empathy and brand authenticity.
• Measure and refine: Conversion rates and customer response to see where AI delivers the most impact to increase ROI.

AI as a partner in growth

AI is not here to replace advertising, but to enhance it. By moving data-heavy tasks and optimisation to AI tools, your team can focus on creativity, strategy and impact. The result is AI-driven campaigns that combine speed and precision with empathy and creativity.

For businesses, the key is to start experimenting – adopt AI gradually, and refine along the way. Used thoughtfully, AI becomes a partner in driving smarter, more impactful advertising.