AI Should Take Advertising to a New Level of Granularity

In principle, artificial intelligence ought to be able to improve advertising precision, taking “personalization” to a new level. 

Consider Disney’s tool called “magic words” that uses AI to match ads with specific scenes in its movies and shows. The tool analyzes and tags scenes to identify content, brands, images, and mood, creating metadata for personalized advertising.

The advantage is better ad targeting, and might be seen as part of a broader move away from “demographics” to “psychographics” in advertising. 

Though audience demographics including attributes such as age, income, and location long have been used to “target” audiences, they paint what would arguably represent only a broad picture of a potential audience. 

Think of all one’s neighbors. Though broadly similar enough to categorize as a single demographic, interests, values and consumer behavior can vary wildly between homes that would appear to be the “same” demographic. Two households might be high consumers of “sports” content, but one household is interested in a variety of sports; the other only in the National Football League, or only one or two teams in the NFL. 

One home has snowboarders or skiers; the other does not. One home spends significant sums on airfares and hotels; the other spends more on recreational vehicles; cars and vehicular vacations. One home owns a boat; the other does not. 

By definition, “mass media” has to target large groups, producing generic ads. The whole point of digital advertising is its ability to target based on interests and relevance “right now.” 

Feature	Mass Media	Digital Advertising
Audience Reach	Broad	Targeted
Targeting	Limited (demographics, media type)	Highly granular (demographics, interests, behavior)
Personalization	Limited (broad messaging)	Highly personalized (individual preferences)
Timing to Potential Buying Behavior	Less immediate (multiple exposures)	More immediate (real-time behavior)
Data and Insights	Limited (individual responses, effectiveness measurement)	Rich (individual responses, campaign optimization)
Cost per Impression	Lower (economies of scale)	Varies (targeting, platform)
Flexibility & Adaptability	Limited (post-production changes)	High (real-time updates)
Creative Potential	Impactful, memorable (storytelling, emotion)	Interactive, engaging (immersive experiences, demos)

Psychographics are about audience values, interests, attitudes, and lifestyles, presumably indicating the motivating values for purchase behavior. In principle, psychographics mean ads can be tailored to resonate with specific needs and desires, making them more engaging and effective.

Psychographics, in principle,  allow for dynamic ad creation, adapting to individual preferences and behaviors in real-time.