Journal of Advertising

ISSN: 0091-3367 (Print) 1557-7805 (Online) Journal homepage: https://www.tandfonline.com/loi/ujoa20

Special Section Introduction: Artificial Intelligence

and Advertising

Hairong Li

To cite this article: Hairong Li (2019): Special Section Introduction: Artificial Intelligence and
Advertising, Journal of Advertising, DOI: 10.1080/00913367.2019.1654947

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Published online: 04 Sep 2019.

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Journal of Advertising, 0: 1–5
Copyright # 2019, American Academy of Advertising
ISSN: 0091-3367 print / 1557-7805 online
DOI: 10.1080/00913367.2019.1654947
Special Section Introduction: Artificial Intelligence and Advertising
Hairong Li
Michigan State University, East Lansing, Michigan, USA
The International Conference on Intelligence Science
and Advertising Development was held in Shanghai,
China, on November 17 and 18, 2018. More than 40
scholars and experts presented on the latest advances and
emerging issues in the use of artificial intelligence (AI) in
advertising. The conference represented one of the first
efforts to understand a fast-growing area of digital adver-
tising. To share the best outcomes from this conference,
the Journal of Advertising decided to publish a special sec-
tion on AI and advertising. After two rounds of blind
reviews, four manuscripts were accepted as research notes
for this special section in the hopes that these articles may
stimulate further research on intelligent advertising. We
define intelligent advertising as consumer-centered, data-
driven, and algorithm-mediated brand communication.
The meaning of this intelligent advertising definition is
manifested and enriched by these special section articles.
Qin and Jiang (2019) investigate the use and impact of
AI in the advertising process, which consists of consumer
insight discovery, ad creation, media planning and buy-
ing, and ad impact evaluation. They review past cases
and further explore how AI technologies are or can be
used in each of the four steps. In consumer insight discov-
ery, for example, a special and temporal app usage pat-
tern mining algorithm can be used to understand users’
behavioral patterns. In targeted ad creation, the consum-
er’s ad preferences can be estimated using in-depth
semantic analysis and real-time user interactions to pre-
dict the probability that a consumer will accept a creative
Address correspondence to Hairong Li, Department of
Advertising and Public Relations, Michigan State University,
404 Wilson Road, Room 309, East Lansing, MI 48824, USA.
E-mail: hairong@msu.edu
Hairong Li (PhD, Michigan State University) is a professor
of advertising in the Department of Advertising and Public
Relations, Michigan State University.
1
idea in the foreseeable future. In media planning and buy-
ing, a user’s touch points can be classified and simulated
on the basis of behavioral trajectory across news media,
social media, and shopping media to deliver personalized
ads. And in advertising impact evaluation, data can be
collected in real-time monitoring of audience response;
with the help of machine learning, real-time optimization
can be made to achieve the consistency between the
advertising impact and brand impact. Qin and Jiang’s
investigation shows that AI is being integrated in the
advertising process with various levels of impact, and
more research is necessary to advance our understanding
of such use and influence.
Chen, Wang, and Xie (2019) focus their analysis on
how AI enhances programmatic creative. Programmatic
advertising started with media buying via real-time bid-
ding (RTB) and gradually expanded into programmatic
creative. Programmatic creative has evolved from select-
ive delivery of premade digital ads, to the assembly of
premade digital assets in real time to generate personal-
ized ads, to the generation of digital assets from stock
photos or videos to assemble them into personalized ads
based on data about the user, their groups, contexts, and
more. The authors examine three key elements of
AI—data, algorithms, and computing power—and their
potential in facilitating programmatic creative. An
interesting issue is whether human intervention is still
necessary to ensure the suitability of intelligent ads.
Wang et al. (2019) develop an AI system to generate
intelligent ads and conduct an experiment to test the
effect of these intelligent ads. The smart generation sys-
tem of personalized advertising copy (SGS-PAC) is able
to automatically generate personalized ad copy to meet
the needs of consumers in a given context. The system
comprises four key components: personalized user tag
classification, advertising words sentiment analysis, adver-
tising copy template generation, and template matching.
2 H. LI
For each consumer, the system can produce specific ad
copy that aims at the characteristics of the current con-
sumer and is connected with the scene in which the con-
sumer is situated at the moment. The authors detail the
technical aspects of the system in the article. In addition,
they test the intelligent ads for three products in a retail
platform and conclude that personalized ad copies gener-
ated by SGS-PAC are effective in promoting various
products to diverse consumers.
Malthouse et al. (2019) propose a multiobjective, mul-
tistakeholder recommender system (MRS) as a solution
to maximizing the value of a two-sided platform that
serves both consumers and advertisers. Online retailers
have long used recommender systems to sell their prod-
ucts to consumers, but some online retailers are opening
a new revenue stream by recommending advertisers’
products. Thus, striking a balance between sponsored and
nonsponsored recommendations is a challenge to many
online retailers. MRS is devised specifically for sponsored
recommendations; as a platform it must decide which per-
sonalized set of providers to recommend to each user. To
these authors, product or service recommendations are a
new type of digital advertising: intelligent advertising.
They reveal the components of the MRS before conduct-
ing a simulation study to verify the effectiveness of the
new recommender system.
These four articles not only exemplify the connotation
of our definition of intelligent advertising, which is con-
sumer-centered, data-driven, algorithm-mediated brand
communication, but also demonstrate broader uses of
intelligent advertising in practice, such as in the advertis-
ing process, for advertising creativity with diverse con-
sumers, and as sponsored recommendations on two-sided
retail platforms. As AI is penetrating more sectors and
practices of the advertising industry, new research is
needed to develop the theory of intelligent advertising.
INTELLIGENT ADVERTISING AS A NEW PHASE OF
DIGITAL ADVERTISING
Since the debut of the first banner in October 1994,
digital advertising has evolved dramatically to transform
the entire advertising industry and nurture a new field of
academic research over the past 25 years. If we can say
that interactive advertising is the first phase of digital
advertising and programmatic advertising is the second
phase, then intelligent advertising will be the third phase
of digital advertising. It is imperative to note that a newer
phase of digital advertising always retains the valuable
attributes of a previous phase of digital advertising while
adding innovative attributes. For example, digital adver-
tising in its nascent years was often referred to as inter-
active advertising because of its interactive nature, which
distinguished it from conventional advertising, which was
largely one-way communication between advertisers and
consumers. The key attribute of interactivity was so
prominent and intriguing that it resulted in the inaugur-
ation of the Journal of Interactive Advertising in
September 2000 (Leckenby and Li 2000), the renaming of
the Internet Advertising Bureau that was established in
1996 to the Interactive Advertising Bureau in April 2001
(IAB 2001), and numerous studies of interactivity (e.g.,
Ha and James 1998; Heeter 2000; Liu and Shrum 2002;
McMillan and Hwang 2002). Programmatic advertising
represents a new phase, where digital advertising can be
sold and bought automatically using software, data, and
algorithms (IAB 2014). In other words, the key attributes
of programmatic advertising are interactivity and auto-
mation (Li 2019). In the same vein, intelligent advertising
preserves interactivity and automation while adding new
inventive attributes to digital advertising. What makes
these inventive attributes calls for new studies now and in
the future.
Our initial analysis of some popular AI-powered apps
is suggestive of new attributes of intelligent advertising.
For example, Google Assistant, released in 2016, can pull
data from all of the Google apps a user uses with a single
login, including Gmail, Search, Maps, Shopping, Photos,
Calendar, Contacts, and more; and then uses AI technol-
ogies such as natural language processing and machine
learning to carry out various tasks in response to the
user’s voice request or keyboard input. Single-source data
are essential for Google Assistant to work. Our second
example is TikTok, a short video platform that was
released in 2017, which uses AI technologies to assess
users’ preferences through their interactions with the con-
tent and provide a personalized content feed to each user
(Jennings 2019). As TikTok’s parent company ByteDance
(2019) states on its website, there is no need to input indi-
vidual preferences or identify topics of interest when
using any ByteDance content platform. By using large-
scale machine learning and deep learning algorithms, its
platforms learn about each user’s interests and preferen-
ces through interactions with the content, including taps,
swipes, time spent on each article, time of day content is
consumed, pauses, comments, dislikes, favorites, and so
forth. This results in a personalized content feed custom-
ized specifically for each user. Our third example is
Alibaba’s Hema supermarket app, which allows users to
order either with the app or in the store, consume
instantly prepared seafood, or get free home delivery in
30 minutes for users residing within 1.9 miles (3 kilo-
meters) of the store (Doctoroff 2018). Hema general man-
ager Zhang Guohong stated in a TV interview (TVBS
2017) that Hema users shop once every three days, and
about 70% of orders are placed with the app. Massive
 SPECIAL SECTION INTRODUCTION
data on shopping preferences are tracked individually for
mining, which enables personalized promotion offers that
are well received by most shoppers.
NEW ATTRIBUTES OF INTELLIGENT ADVERTISING
Several new attributes of intelligent advertising are evi-
dent from the analysis of these AI-powered apps.
Intelligent ads should be personalized in prescription of the
user’s needs and wants. That is, going beyond merely pre-
dicting the user’s interests, intelligent ads can accurately
anticipate the user’s needs and wants in various contexts
and certain time frames and can recommend specific offers
to the user. Such prescription power comes from the pri-
mary use of the user’s first-party data with the user’s
informed consent. Just as patients share physical condi-
tions with their physicians, users allow a trusted app to col-
lect their data and, in return, the app uses the data to better
serve the users. Trust is the cornerstone of the use of first-
party data in intelligent advertising. More importantly,
intelligent ads should be voluntarily exposed to the user,
not through forced exposure. While in-feed and in-article
ads may remain, most intelligent ads will reside on an app
or will be on call in a voice assistant for the user to access,
instead of randomly popping up on the user’s screen, thus
dramatically reducing the level of perceived intrusiveness
of digital advertising (Li, Edwards, and Lee 2002). As user
interactions cumulate, more personal data will facilitate
intelligent ads to optimize and better serve the user,
thereby building a long-term brand relationship.
These new attributes may morph into an imaginative
intelligent ad in the near future. For example, when a
user remembers that tomorrow is her son’s or daughter’s
birthday, her favorite AI-powered app may have already
recommended a few trendy birthday gifts based on all of
the data the app has about her and her family—including
her son or daughter—waiting for her to view, select, and
order by clicking on a tag or by using a voice command.
These gifts may be in virtual reality or augmented reality,
which allows them to be experienced virtually (Li,
Daugherty, and Biocca 2003). Exposure to any of the rec-
ommended gifts is voluntary, so the user does not have a
sense of ad intrusion; instead, the user experiences a feel-
ing of being taken care of or helped by the app. In this
sense, intelligent ads will serve users whenever and wher-
ever they need something, either currently or potentially.
FUTURE RESEARCH TOPICS
As the goal of the special section is to stimulate further
research on intelligent advertising, we suggest several
research topics for interested researchers to consider.
These topics are supplementary to the research questions
3
proposed in each of the special section articles. They are
by no means comprehensive and are intended only to be
inspirational.
Factors Driving the Adoption of AI in Advertising
As the rise of interactive advertising and programmatic
advertising was attributable to many technological, eco-
nomic, and social factors, the emergence of intelligent adver-
tising is seemingly driven by big data, algorithms, and cloud
computing. However, its further growth may depend on a
wide range of factors, such as investment in AI technologies,
industry innovation, government regulation, and business
and end-user acceptance. A systematic view of these factors
will certainly help us better understand where intelligent
advertising is going in the United States and beyond.
The Impact of AI on the Advertising Industry
Although the impact of AI on the advertising process
has primarily increased efficiency, as Qin and Jiang (2019)
argue, the impact of AI on the structure of the advertising
industry remains an open question. The rise of program-
matic advertising has resulted in some changes in the rela-
tionships between clients and advertising agencies, in that
some consulting firms help clients establish in-house capa-
bilities to carry out certain tasks, such as media buying and
campaign analysis. Such structural changes may accelerate
as more clients adopt AI technologies in ad creation, fur-
ther deteriorating the agency business.
New Models in Which AI Works for Branding
and Selling
Branding refers to the delayed effect of advertising,
which is typically cognitive in nature and measured with
a set of soft metrics or minor conversions, such as ad
views, unique visits, comments, and shares, whereas sell-
ing refers to the immediate effect of advertising, which is
typically behavioral in nature and measured with a set of
hard metrics and major conversions such as app down-
loads, sign ups, and purchases. As we can see in Wang
et al. (2019) and Malthouse et al. (2019), hard metrics
and macro conversions are relatively easy to track in AI-
powered analytics, as opposed to soft metrics and minor
conversions. One challenge is that we need new models to
better measure the effects of intelligent ads in both brand-
ing and selling, either separately or synergistically.
The Ways AI Predicts the Individual’s Needs and Wants
Consumers’ needs and wants, interests and preferences,
and habits and tastes have become the foundation of
4 H. LI
intelligent advertising. These traits and states of consum-
ers can be analyzed in real time or otherwise from large
volumes of multisensory data cumulated on multiple
touch points, especially ubiquitous virtual assistants, to
generate consumer insights. Wang et al. (2019) have
explored this issue in their SGS-PAC system. Speech rec-
ognition, natural language processing, and computer
vision are among the AI technologies that are especially
useful—along with the processes and systems that inte-
grate these AI technologies—in understanding consumer
insights in digital advertising (Kietzmann, Paschen, and
Treen 2018).
The Logics of AI in Creating Brand Messages
All four articles have explored some aspects of creating
ad copies and product recommendations using big data
and AI technologies. The logics that may be applied
across different platforms need more investigation,
including major phases of a creation process, types of
data input needed to initiate a creation process, metrics
best to assess the ad effects, and variables to use for real-
time optimization. Other related issues are the conditions
in which AI may replace creative professionals in brand
message creation, and the tasks that still require human
creativity, supervision, and intervention in typical adver-
tising campaigns.
Demystification of Advertising Algorithms
The authors of two articles have designed algorithms
to generate ad copies (Wang et al. 2019) and make prod-
uct recommendations (Malthouse et al. 2019). Because of
their expertise in both advertising and computer science,
the descriptions of these algorithms are relatively easy to
follow for advertising scholars and professionals. They set
an example of multidisciplinary research in advertising,
and more studies of this kind are necessary to demystify
the algorithms running behind AI-powered consumer
insight discovery, intelligent ad creation, media planning
and buying, real-time optimization, and measurement
and evaluation.
Data Privacy in the AI Age
The fact that there is no article on data privacy in this
special section does not mean that the issue is not import-
ant; rather, this subject is a real challenge to advertising
researchers. The European Union’s General Data
Protection Regulation (GDPR) and the California
Consumer Privacy Act (CCPA) offer legal frameworks
and terminology that can be used in advertising research.
As Ghosh (2018) interpreted, personal information under
CCPA includes a consumer’s personal identifiers, geolo-
cation, biometric data, Internet browsing history, psycho-
metric data, and inferences a company might make about
the consumer. Such information is essential for AI appli-
cations in the advertising process, especially consumer
insight discovery and brand message generation. Among
the many data privacy concerns are how consumers can
know what personal information is collected by an entity
for what purpose, and whether they should authorize its
access in return for certain benefits. Now that intelligent
ads are intended to better serve users, trust must be estab-
lished between an entity and its users. The methods of
establishing user trust deserve more data priv-
acy research.
ACKNOWLEDGMENTS
This special section on AI and advertising can be seen as
a gift in celebration of the first 25 years of digital adver-
tising. Like any special issue or special section in the
past, this one is the fruit of the efforts of authors who
have contributed their quality studies and many
reviewers of multiple disciplines who have diligently
reviewed manuscripts and revisions, made sharp
criticisms, and provided constructive suggestions.
Professor Shintaro Okazaki, editor in chief, provided
guidance and support during the entire process. This spe-
cial section would not have been possible without these
collective efforts. To all involved in the making of this
special section, I am greatly appreciative as guest editor.
I sincerely hope that this special section will play a role
in promoting future research of intelligent advertising
and in elevating digital advertising to new heights in the
years to come.
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 SPECIAL SECTION INTRODUCTION
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