Trending: Are AI and ChatGPT Changing PPC for the Better?

Any innovative San Diego PPC agency now includes artificial intelligence (AI), such as ChatGPT, in developing and running winning campaigns.

However, is it making this online marketing strategy better? This article delves deeper into that topic. You will learn the following:

• Different ways these breakthrough technologies improve PPC marketing.
• A theoretical example of PPC AI at work.
• The grave concerns, challenges, and downsides of overreliance on ChatGPT.

Explore the pros and cons of AI in PPC. Read the article below, Let’s go!

If you want to learn how Digital Authority Partners can increase your PPC effectiveness, watch this video!

AI Streamlines and Amplifies PPC Results

PPC is an advertising technique requiring precision in timing, audience, and ad content. Otherwise, it is a fruitless effort that drains your resources and puts you even further behind your competitors.

AI and machine learning boost their accuracy, relevance, and potential to supercharge conversions in three ways. They do the following:

• Quickly collect and analyze big data.
• Automatically optimize ads.
• Manage resources more efficiently by consistently learning and refining campaigns.

     1. Data Analysis

One of the most notable features of AI is its uncanny ability to collect and understand different types of big data, whether they are structured or unstructured. Consider the latest ChatGPT version (GPT-4). 

As a chatbot, it answers prompts, such as questions or instructions. It then uses your input to “learn” more about your queries or intent so that it can feed you more accurate or preferred answers next time. 

The new version can process a prompt of up to 25,000 words and respond with answers based on almost 600GB of internet data that it studied. That is equivalent to a whopping 300 billion words! 

In the context of PPC, an AI-driven data analytics tool draws from this vast reservoir of information to detect subtle patterns and nuances in user behavior, preferences, and search intent. Content can then be tailored with laser precision according to your target audience. 

AI is capable of also predicting future trends by analyzing past campaigns. It can forecast which keywords will be more effective in the upcoming season or which demographics might be more responsive, helping advertisers plan ahead.

     2. Automatic Ad Optimization

Many businesses, especially small ones, often find themselves in a catch-22 situation. While they must be flexible to react promptly to market changes, they need more resources to do so. This makes it challenging to go toe-to-toe with existing competitors and beat the big brands. 

AI helps resolve this issue by allowing growing enterprises to run effective campaigns even with minimal intervention. In particular, AI automatically:

• Creates ad variations by mixing and matching headlines, descriptions, and display paths. 
• Tests these combinations to find the most effective ones, enhancing the ad’s relevance and potential clickthrough rate (CTR).
• Adjusts bids in real time so advertisers get the best value for their ad spend.
• Segments audiences based on complex behavior patterns, not just demographics, and uses data to customize ad experiences based on these pieces of information.

Automatic ad optimization is also highly effective when localizing your PPC approach. It can: 

• Translate an ad copy. 
• Apply local cultural nuances, preferences, and trends for a more personalized ad approach.
• Identify high-performing local keywords that might differ from broader or generic terms, such as “holiday deals” for UK audiences and “vacation packages” for US travelers. 
• Perform advanced dayparting strategies.
• Study local competitors' PPC strategies to help you adopt these for yours.

     3. Efficient Resource Allocation through Continuous Learning and Refining Campaigns

The projected online marketing spending in 2024 is 10.9%. Although this is far from the pre-pandemic percentage, it is still slightly higher than the 2022 and 2023 growth. This data seems to suggest that businesses are willing to allocate more to outcompete you, even if they are more cautious about it. 

How can you caution against the effects of more intense competition? How do you stay relevant and relatable to your audience despite limited resources? One potential answer is AI, including ChatGPT. 

AI-based systems, such as PPC platforms and data analytics, continuously learn from the information fed to them. This learning is deep and intricate. It understands subtle patterns in user behavior, seasonality effects, and market shifts.

In the process, your business can:

• Set aside more budget for high-performing campaigns.
• Keep track of competitor performance and strategies and use the information to further differentiate your campaigns and branding. 
• Refine many aspects of the PPC plan based on a feedback loop, which involves analyzing every interaction and conversion. 

AI PPC at Work

Let us use a hypothetical example to better understand how all these AI benefits work on PPC. You are a boutique hotel named The Pacific Pearl in the Gaslamp Quarter. Because you are new in the market, your primary PPC objective is to raise brand awareness while targeting a local audience. 

AI might do the following:

• Analyze search data within San Diego for patterns. For example, searches for “historic hotels in the Gaslamp Quarter" or “unique stays in downtown San Diego” are popular from June to August and October to April. 
• Scan PPC campaigns of other similar accommodations in the area. If a competitor offers a “third night free” promotion and receives high engagement, yours can run a more attractive offer that says, “Book three nights and receive a complimentary dinner.”
• San Diego’s Gaslamp Quarter is bustling with events. If a jazz festival comes up, AI can recognize related search spikes and display a dynamic ad that says, “Stay at The Pacific Pearl for the Jazz Festival and receive a complimentary festival kit.”
• As a boutique hotel, you might have themed rooms. AI ads can match these units to user preferences or needs. For instance, if someone frequently looks for vintage clothing stores or retro bars in San Diego, they might want to see a copy of the hotel’s Roaring ’20s room.
• AI determines that ads promoting the hotel’s rooftop bar have a higher CTR during the summer months. You can then increase your budget by promoting this feature from June to August.
• Chatbots, which also use AI, reduce the barriers to conversion. For instance, the bot might tell your potential guest trying to book a room, “Our Art Deco suite is available for your selected dates. Did you know it features original tilework from the 1920s and offers a stunning view of the Gaslamp Quarter?” Doesn’t this information add more value?

The Biggest Issues with AI and ChatGPT

Despite the positive growth of AI and the huge advantages it offers to businesses in San Diego, it remains limited and problematic to a certain extent. 

One common problem is the overreliance on automation. It sometimes robs you of the ability to inject human insights and creativity into your ads so that they sound generic, unrelatable, and even tone-deaf. 

Automated-bid strategies on platforms such as Google Ads take control away from advertisers. Although it maximizes results based on the set objective, these bids might fail to align with the holistic strategy you want to pursue. Plus, automatically bidding on keywords sometimes increases CPC if not monitored. 

Other AI PPC problems include the following:

• Generative AI is also prone to both data bias and error. A recent Stanford and UC Berkeley study revealed that ChatGPT’s accuracy has been slipping. It was 97.6% accurate in March when it took a 500-question test but performed a shockingly dismal 2.4% only three months later. 
• Personalized ad targeting requires collecting and processing large amounts of user data. It can raise concerns about user privacy. If not handled correctly, this could lead to legal issues and erode trust.
• AI tools simplify tasks but may also introduce complexities, such as integrating them with other platforms or even legacy systems.

Summing Up

PPC AI is here, transforming almost all aspects of paid advertising, from keyword research to predictive analytics. However, relying solely on it when planning your strategy or making decisions is dangerous. The technology is new, limited, and prone to bias and legal risks. 

The best solution is not to ignore it but to know how to harness its power and potential to create and promote human-centric ads. As a leading San Diego PPC agency, Digital Authority Partners (DAP) combines creativity, innovation, and technical expertise to develop effective paid campaigns. 

Contact us to learn more about our strategies.