Hai Mag, the cofounder and CEO of Eva, Profit Maximization Software and Agency Services for Amazon and all Marketplaces, delved into the rise of retail media and the role AI is playing in advertising strategies. Retail media has transformed the e-commerce landscape, offering brands new opportunities to reach their target audiences on platforms like Amazon. Some brands are exploring artificial intelligence to navigate the complexities of modern retail advertising, requiring a deep understanding of advertising metrics and strategic AI use.
To develop effective advertising strategies, key metrics such as advertising cost of sales, total advertising cost of sales, profit return on ad spend, and total profit return on ad spend should be utilized. These metrics provide insights into the effectiveness of campaigns and help make informed decisions to drive profitability. Integrating these metrics into advertising strategies can lead to deeper insights and informed decisions.
AI can be used in advertising strategies in various ways, such as campaign creation and bid optimization, inventory awareness, and monitoring impression share and profitability. Campaign creation can be automated, targeted, and adjusted in real-time based on performance data. Brands should consider profitability, inventory levels, and conversion strategies when approaching advertising. Monitoring impression share and adjusting bidding strategies can ensure ads are seen by the right customers at the right time.
Best practices for using AI in advertising include starting with one product at a time and expanding gradually. This allows brands to see the advantages and shortfalls of algorithms and adjust based on external factors like logistics crises or pandemics. While AI can handle many aspects of advertising automatically, the human element is essential for interpreting data, understanding customer behavior, and making strategic decisions that AI might overlook. Combining AI-driven insights with human expertise can lead to comprehensive strategies that drive long-term success.
In conclusion, using AI in retail media and advertising strategies can offer advantages, but the human touch remains vital in analyzing data, understanding customer journeys, and crafting competitive strategies. As retail media continues to evolve, balancing AI with human expertise will be key to success. Forbes Business Council, the foremost growth and networking organization for business owners and leaders, provides a platform for insightful discussions and collaboration in the dynamic world of e-commerce advertising.
