Is AI Really Making Waves? Meta & P&O’s “Golden Child” Halves CPAs & Boosts ROAS By A Quarter

Artificial intelligence (or AI, to its friends) is the flavour of the month in advertising.

Every company in the value chain from brands to agencies large and small, independent or holding company-owned, tech platforms and solutions provider are busy telling everyone and anyone who will listen that they are the leaders in AI.

Meta announced its Advantage+ shopping campaigns (ASC) earlier this year as a new tool in its Advtange+ products which use machine learning and AI to boost campaign performance. Rather than creating manual shopping ads, ASC lets marketers create campaigns with varying targeting and creative setups based on a range of different parameters.

This might sound banal, and in the minds of people like Nick Law and Mark Ritson, it is. But, cruise company P&O feels very different. It put Meta’s AI tools to work and saw dramatic success over its peak shopping period.

“It’s their equivalent of Black Friday and Cyber Monday and P&O had some really aggressive sales targets,” said Melissa Hudson a client solutions manager at Meta and the cruise company’s account manager.

Hudson and the team recommended ASC to deliver more cruise bookings with less effort.

“We tested their ASC campaign alongside their existing BAU conversion activity. We found this to be really effective for them in achieving their business goals. ASC delivered a 28 per cent higher return on ad spend — which is huge. We also saw a 57 per cent lower cost per action”.

This success in booking more cruises for lower effort led to P&O expanding its work with ASC into New Zealand and other markets.

“We now affectionately refer to ASC as the ‘golden child’ within our automated suite of solutions because of its incredible ability to drive really meaningful outcomes for our partners,” she added.

ASC lets marketers upload creative assets and messaging, and then the machine learning models and AI streamline the campaign creation process across targeting, optimisation, creative and destination. To be clear, ASC is not AI-created adverts. In the mind of Henry Kelly, Meta’s head of ecommerce, the tool supports classic marketing rather than ripping up the rulebook.

“It’s about finding the right person with the right message at the right time. We’re using automation, AI and machine learning to make that happen. We’re really focusing on streamlining ad delivery optimisation,” he explained.

“Historically, we used to do a lot of setup around targeting and creative and placements and budgets. But what ASC is doing is allowing us to say to our clients ‘We can do a lot of that on your behalf’. They have the option of putting 150 different creatives in there and we’ll start to see what works best and move from there”.

With this new approach, P&O was able to find users on Facebook that fell outside of its traditional targeting without having to manually find them and make increasingly granular and less effective user segments. This did mean giving up an element of control. But, according to Joe Robinson, digital marketing manager for P&O Cruises & Cunard, Carnival Australia, this wasn’t a problem.

“We’ve used it in addition to our existing campaign structure. It underpins our business-as-usual strategy as a way of reaching an incremental audience that may fall out of our typical targeting segments, but clearly still relevant audiences based on performance,” he explained.

Should campaigns not convert, the AI simply moved on to another segment.

“Across the market, we’re seeing automated media buying tools deliver improved performance. I understand why brands or agencies would be hesitant to transition from traditional platforms that offer complete control when setting up campaigns.,” added.

“As third-party cookies become less reliable, conventional interest targeting segments value will decrease. This is where I think automated solutions are going to come into greater effect and ultimately where media buying is headed”.

The smart money seems to be putting a lot of stock in AI’s role in media buying. Sir Martin Sorrell asked the audience at Cannes in Cairns:

“If you were a client, who would you rather hire – a 25-year-old media planner or buyer or an algorithm and use an agency to check the results, test the result, test the research?”

Of course, disruption to business models on that scale requires a decently sized pair of kahunas. Robinson described the change from manual targeting, campaign oversight and evaluation as “a leap of faith”.

“We started small and scaled once we saw performance. Although I do welcome the introduction of geo-targeting and additional first-party targeting on the roadmap. Overall I think of it as an advantage, rather than a disadvantage. It demonstrates the power of automation, and not restricting yourself to rigid interest or demo targeting. By feeding the platform metrics of success and other intent signals it can deliver incremental audiences that business-as-usual strategies may have missed”.

In fact, P&O’s work with Meta found new audiences outside of the cruise company’s core segments — Hudson said that 95 per cent of the campaign delivery on ASC for P&O was to a new audience.

So is AI really making waves? In the case of Meta and P&O it certainly seems to be.