Appeasing the advertising algorithms on social media and Google has always been a mix of art and science – but there are plenty of rewards, not only in terms of active engagement but also in terms of lowered ad costs.
So far, AI tools have proved useful as an algorithm-cracker for the biggest digital marketing and ad agencies.
The problem is that small businesses and boutique agencies are still working to find the entry point with AI to pinpoint the recipe for ad success – from creation, targeting, testing, and reporting. This raises some thorny questions:
- What are the key AI tools marketers should be using?
- How can they be used between creative, ad deployment, and measurement?
- How much should a business plan to invest in AI tools?
- Is this more or less expensive than traditional advertising strategies?
I recently interviewed Logan Welbaum, an ex-Google and Meta employee who worked directly with the ad platforms at both companies.
Today, he is the founder and CEO of Plai, a Y Combinator-backed platform focused on advertising automation.
Welbaum has a precise understanding of social media ad algorithms and, specifically, how AI can be used to optimize ad strategies in line with them.
Image from Logan Welbaum, April 2024Below is a lightly edited transcript of my questions and Logan Welbaum’s answers.
How Google And Meta Leverage User Interaction Data
Greg Jarboe: “From your experience at Google and Meta, how were large companies utilizing AI for ad optimization? What key functionalities did these solutions offer?”
Logan Welbaum: “Platforms such as Google and Facebook leverage user interaction data to optimize their ad serving. Their AI technologies offer advertisers the highest level of performance for their advertising campaigns.
Their approach is different from that of ad agencies and Plai, which own inventory data and optimize campaign creation. They offer features that allow for the uploading of additional data and the targeting of more specific audiences, because the inclusion of more data and signals enhances the performance of their AI systems.”
How Can Small Businesses Leverage AI-powered Solutions?
Jarboe: “How can smaller businesses, without the resources of large corporations, leverage similar AI-powered solutions for their advertising needs? Are there affordable, accessible options available?”
Welbaum: “Understanding ad metrics and following changes in social media ad algorithms requires experience. Plai trains our AI model to learn our experience in digital marketing and observation from our existing campaigns, so that it can assist small businesses.”
Jarboe: “Beyond basic automation, what unique functionalities can AI offer smaller businesses in ad creation, targeting, and measurement that traditional methods lack?”
Welbaum: “Ultimately, AI can save small businesses and agencies time and money. AI allows them to generate and analyze ad content in a much shorter amount of time and with fewer people than it would normally take. AI can build detailed plans and lists for targeting and help track the success of a campaign.
With Plai, small businesses can use our tools to launch things like video or Facebook ads in seconds and keep track of each ad’s progress all the way through its lifecycle. Our tech is a text-to-advertising approach, so a small business can just plug in their criteria and Plai will generate an ad with relevant keywords and images or videos.”
Jarboe: “Can you elaborate on how your platform specifically uses AI to address the needs of smaller businesses in ad creation, deployment, and measurement?”
Welbaum: “Taking Google Ads as an example, Google Ad Manager gives customers full control over a campaign but requires experience and knowledge to create a performing campaign. On the other hand, they have a product like Smart campaigns for those with little experience in digital marketing, but it lacks control and transparency.
Plai utilizes AI to guide small businesses to create a performing campaign. This allows advertisers to save time and reduce mistakes, but also gives control if they want to update AI’s recommendations.
Similarly, in terms of measurement, Google Ad Manager offers a comprehensive view of a campaign through an extensive array of metrics, whereas Smart campaign provides a more limited set of metrics. Our AI analyzes all available metrics, interprets them, and then delivers actionable insights in language that doesn’t require any digital marketing expertise.”
What Are The Challenges For Small Businesses Arising From Social Media Ad Algorithms?
Jarboe: “What are the key challenges small businesses face when navigating social media ad algorithms? How does Plai utilize AI to help them overcome these challenges?”
Welbaum: “SMBs want to grow revenue and run their businesses. Ads that are relevant and creative perform better and win and SMBs a cheaper ad cost because of it.”
Jarboe: “Can you provide concrete examples of how smaller businesses have achieved success using Plai’s AI-powered advertising solutions? What metrics demonstrate the effectiveness of this approach?”
Welbaum: “Plai customers have seen 90% decrease in ad-cost as well as 105% higher click-through rates than the industry standard. Not only do Plai customers spend less on ads and see better click-through results, but the platform also allows them to generate ads more quickly and effectively, reaching their desired target audience ultimately generating more business.”
How Will AI-Powered Advertising Tools Evolve In The Next Few Years?
Jarboe: “In your opinion, how will the landscape of AI-powered advertising tools evolve in the coming years? What new functionalities can we expect?”
Welbaum: “Ad creative will improve dramatically for brands of any size with any budget.”
Jarboe: “While AI offers significant advantages, are there any potential drawbacks or limitations smaller businesses should be aware of when employing AI for advertising?”
Welbaum: “We automate everything from a single prompt, but we still provide features and options for customers to take over and control or make edits. Still having that control is essential.”
How Can Small Businesses Prepare To Integrate AI Into Marketing Strategies?
Jarboe: “Looking ahead, how can smaller businesses best prepare to fully integrate AI into their overall marketing strategies?”
Welbaum: “Small businesses can prepare to implement AI into their marketing strategies through the creative process and general optimizations – these two elements of advertising will naturally be a first step for AI to fit within SMBs.”
Jarboe: “ChatGPT, while impressive, represents just one facet of AI. Can you elaborate on other AI applications beyond language models that can be beneficial for smaller businesses in advertising?”
Welbaum: “Recommendation algorithms, such as Amazon’s ‘customers also bought’ feature, serve as one example. Plai has a wide range of clients. This enables our model to identify successful strategies among a subset of customers and then recommend those insights across our entire customer base.”
Jarboe: “How important is it for smaller businesses to possess a basic understanding of social media ad algorithms to effectively utilize AI-powered advertising tools?”
Welbaum: “SMBs want to grow revenue and run their businesses. Ads that are relevant and creative perform better and win and SMBs a cheaper ad cost because of it.”
AI Is Leveling The Playing Field In Advertising
When it comes to advertising, AI offers significant advantages – and it’s not just for big businesses.
With advertising platforms leaning into AI technology, incorporating it into your process can help you navigate their algorithms. Automated campaigns are just part of the equation. AI can power more efficient analysis and unlock new customer insights. As the technology improves and more platforms and service providers lean in, it will become more accessible.
Incorporating AI into your marketing approach can help you stay competitive as a small business.
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