Predictive advertising is increasingly becoming a crucial marketing tool that provides the opportunity to generate positive results in a cost effective way. Particularly for smaller businesses there are many benefits to investing in predictive advertising thanks to the efficiency, relevance and ROI that it can contribute to marketing campaigns. In fact, predictive advertising has the power to change the future of digital marketing in a number of key ways.

Increasing the conversion potential of content

The use of AI and cluster models provides opportunities for businesses to better segment audience so that the right content can be delivered to the right users at the right time. Amazon is a great example of this – the retail giant has already invested in predictive advertising to enable it to ensure ads are relevant and effective for the person seeing them and to help up sell and cross sell across its various ranges. Using predictive advertising, it’s possible to learn more about users via their browsing history and use this to better understand how consumers engage with content and which content they prefer.

A tool for expanding user base

Predictive advertising can be incredibly useful when it comes to audience building. By accessing customer data and third-party behavioural data (via tools such as Facebook Similar Audiences) visitor information can be compared with others who have similar behaviours and traits. Analysing this can be used to build lookalike models to help access a new audience, increase click-through rates and give profits a boost.

ROI on ad spend

Around a quarter of marketing budgets are wasted on investment in the wrong marketing channels or opting for incorrect marketing strategies. Thanks to nuanced targeting and bid adjustments this doesn’t have to be the case on an ongoing basis for those marketers using predictive advertising. There are a number of simple tools that enable ad spend to be optimised, including Google’s automated bid platform, which automatically adjusts bids using sources such as audience data. If your business is struggling to justify current marketing spend then investing in predictive advertising could turn the situation around.

Integrating micro-moments into your marketing

A micro-moment is when a user, motivated by intent, reaches for their device to buy, find, watch or learn something. The use of Dynamic Creative Optimisation (DCO) makes it possible for marketers to tap into these moments. DCO uses signals that are drawn from individual context – such as the time of day or audience segment that the user belongs in – to create personalised ads that are relevant to the user and the micro-moment at the time. Predictive advertising means that it’s possible for marketers to take aim at these micro-moments before they event happen and increase the potential for successful outcomes from consumer engagement.

Predictive advertising has a big role to play in the future of digital marketing but is also relevant now. From justifying ad spend to increasing user base there are already a number of key ways in which it can positively influence the outcome of campaigns.