Creative diversity is the new targeting in paid advertising
by Carlotta Costanzo
The rise of AI campaigns in paid advertising has turned audience targeting on its head. Algorithms can automatically reach the most valuable audiences, in the most valuable placements at any given time. What they can’t do is create effective ads for each of these audiences.
The ability to reach audiences anytime, anywhere means advertisers need to make sure they can deliver the right messages. Creative is the new targeting and advertisers need to implement an agile, scalable creative production strategy.
AI-powered campaigns make their mark
The biggest names in advertising have all launched their own take on AI-automated campaigns recently. First, Google replaced Smart campaigns with Performance Max (or PMax) in 2021. PMax uses AI to analyse audiences, ad placements and your creatives, automatically optimising campaigns to maximise conversions. It can choose the most effective ad placements across Google products, target the most valuable audiences and show ads at the most effective times.
More importantly, it can predict, test and optimise the most effective combination of ad creatives for any given audience. So, instead of creating ultra-targeted campaigns for each target audience, you can run a single Performance Max campaign for a wider range of audiences.
In 2024, Meta launched Advantage+ shopping campaigns (ASCs) that use machine learning to simplify setup and management. Like PMax, ASC automatically selects from your creatives to show the most effective combinations to audiences. This marks an industry-wide movement where AI-powered campaigns automatically compile ads from a library of assets.
In practice, this means advertisers spend less time fiddling with campaign settings and concentrate their efforts on building a diverse set of creatives for their target audiences.
As Meta explains, “different customers may respond better to different ad formats” and ASC can find the most effective combinations for a wide variety of audiences.
With AI campaign formats like Performance Max and Advantage+ Shopping, advertisers can let algorithms handle the testing and optimisation while they focus on producing high quality ad creatives.
Google and Meta aren’t the only big names pushing campaign management in this direction, either. TikTok and Pinterest launched similar versions of AI-automated campaigns in 2024.
Prioritise creative diversity for AI campaigns
Analysing ad spend over the past couple of years, we found that Performance Max accounted for almost 50% of spend by Q3 2024.
Clearly, advertisers are adopting this new breed of AI-powered campaigns. However, getting the best results from Performance Max requires a different approach to campaign management.
Traditionally, advertisers prioritise campaign relevance, audience targeting and manual optimisations (budgets, placements, bid adjustments, etc.). AI campaigns like Performance Max and Meta Advantage automate these optimisations. More importantly, these AI campaigns can target multiple audiences and select the most effective ad creatives for each of them.
Previously, you may have managed generic campaigns to maximise reach, alongside multiple, highly-targeted campaigns for niche audiences and conversion goals. Now, you can reach all of these audiences with a single AI-powered campaign.
The key difference is you’re not manually targeting audiences and constantly optimising campaign settings. AI handles this while you focus on creative production:
Build a diverse library of generic and relevant assets for each target audience
Develop variations of each creative for testing purposes
With a quality library of diverse creatives, AI campaigns will target the most valuable customers for your business and show the most effective combination of creatives for each audience.
The question is: how can advertisers ramp up asset production to get the best results from AI campaigns?
Ramp up creative asset production
To achieve creative diversity, you have to develop a system for producing a higher volume of quality assets: headlines, ad copy, CTAs, images, videos, etc. Reinvest the time and resource savings from AI-automated campaigns back into creative production.
Striking the right balance between volume and quality is the biggest challenge for advertisers here. This is where velocity comes into the picture. Specifically, how can you produce enough creatives quickly enough to maximise performance?
Every advertiser should see a strong correlation between ad spend and the number of new creatives launched.
New ads usually spike in performance early, driving high conversion rates and relatively low costs per acquisition (CPAs). The problem is, this doesn’t last. So, advertisers have to regularly refresh campaigns with new ad assets to sustain results over any given period.
We find weekly or biweekly refreshes maximise performance for most campaigns. This cycle allows new assets to achieve peak performance without dropping too much between refreshes.
Now, where can you get the insights to inform a consistent cycle for creative production?
Trend monitoring: Keep tabs on consumer trends, online behaviour, keyword opportunities, etc. to inform new creative decisions.
Competitor research: Run regular competitor research to know what your rivals are doing – and what they’re not doing.
Performance analysis: Use campaign performance data to dedicate more resources to creatives that get results.
Customer insights: Get feedback directly from your customers to build an understanding of what they really care about.
Asset analysis: Use AI tools like ChatGPT to analyse comments on your ads, customer reviews, brand citations and other sources of valuable information.
Given the amount of time and resources it takes to produce ad creatives, it’s disappointing when any of them underperform. However, even the best advertisers generate most of their revenue from a minority of their campaigns.
The 80/20 rule for successful ad creatives
In our testing, the often-cited Pareto Rule – aka the 80/20 rule – applies equally to creative production. Based on our findings, you should generate 80%-90% of revenue from 10%-25% of your ads.
Likewise, you should find that ~20% of your creatives generate the majority of revenue from your ad campaigns.
This brings us back to the importance of velocity in creative diversity. The faster you produce quality creatives, the more regularly you implement winning creatives – and the more revenue you generate over any given time period. So how many creatives should you launch based on your ad spend? Well, the answer largely depends on your conversion volume but the table below should give you a good idea:
Be realistic when assigning budget, resources and timelines for creative production – and keep the 80/20 rule in mind. Don’t let the performance of ~80% of creatives prevent you from maximising performance from that crucial ~20%.
Tips for producing winning ad creatives
As velocity becomes more important, advertisers need to ensure that ramping up creative production doesn’t compromise quality. To be clear, when we talk about quality, we’re talking about creatives that drive conversions.
Our first tip to advertisers is to keep things simple. We consistently find the top 20% of winning creatives are visually simple with a clear, concise message.
Resist the urge to overcomplicate creative designs, copy and other assets. This is often most challenging when you’re creating multiple variations of a creative for testing purposes.
Now, let’s review some creative design choices we’ve found particularly effective during the past year.
1. Negative hooks
Negative hooks tap into your target audience’s pain points to grab their attention and motivate action.
We find the most effective negative hooks usually reference problems or “bad” habits the target audience wants to solve or avoid. For example, a sustainable retailer might capture attention by calling out common consumer habits and turning them into brand selling points.
2. Dynamic ad frames
You don’t have to stick with blank borders on your ad images. Our testing finds ads with borders including colour contrast, promotional text or eye-catching patterns are often more effective at grabbing people’s attention. We find this works particularly well for Meta Advantage+ catalogue ads.
3. Break seasonal colour conventions
It’s tempting to use seasonal colour schemes during key retail periods: spring motifs for Easter, black for Black Friday or festive colours for Christmas. The problem is, every brand ends up creating similar ads that blend into each other. Test alternative colour schemes during key retail periods and lean into contrast to capture attention.
4. Meta collaborative ads
If you sell products through retailers, Meta collaborative ads are designed for you. Instead of sending traffic to your own site, you can direct them to product pages on partner retail websites where they can complete the purchase right away. Crucially, partner retailers can share segments of their Meta product catalogue with you. This allows you to run Advantage+ catalogue ads and other product formats.
Creative diversity in the age of AI campaigns
Whatever advertisers think of AI campaigns, they’re defining the future of paid advertising. They’re also unlocking new growth potential – and not only by automating time-consuming tasks. This is the first generation of AI campaigns and they’ve already reshaped the fundamentals of audience targeting.
Ultimately, automated targeting means campaign success relies upon showing the most effective possible ad to any given audience. Advertisers who feed AI campaigns the creatives they need to compile effective combinations – for the most valuable audiences – will get the best results from them.
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