AI in Advertising: Enhancing Targeting, Creative Optimization, and Campaign Performance in Digital Media
DOI:
https://doi.org/10.63084/econova.v2i2.71Keywords:
Artificial Intelligence, Digital Advertising, Audience Targeting, Creative Optimization, Campaign Performance, Programmatic Advertising, Machine Learning, Real-Time Bidding, Personalization, Return on Ad Spend (ROAS)Abstract
Artificial intelligence (AI) has emerged as a transformative force in digital advertising, fundamentally reshaping how organizations design, deliver, and optimize marketing campaigns. This study examines the role of AI in enhancing advertising effectiveness across three critical dimensions: audience targeting, creative optimization, and campaign performance. The findings show that AI-driven advertising significantly outperforms traditional approaches across key performance metrics. Specifically, AI-driven campaigns increase click-through rate (CTR) from 2.4% to 5.3% (over 120% improvement), reduce cost per click (CPC) from $1.25 to $0.72 (approximately 42% reduction), and improve return on ad spend (ROAS) from 2.7 to 5.8 (more than double the efficiency). Methodologically, the study employs a comparative simulation of 1,000 advertising campaigns using probabilistic models (bounded normal distributions) calibrated with industry benchmarks to enable controlled evaluation of traditional and AI-driven systems. The results demonstrate that AI-driven targeting improves audience accuracy, AI-driven creative optimization enhances engagement, and automated campaign optimization enables continuous performance improvement over time. The study contributes an integrated framework linking AI capabilities to measurable advertising outcomes, with implications for marketing practice, platform design, and policy.
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