July 24, 2025

Smarter Ads with Better Results: AI and its Application in Performance Marketing

Content is still king, but in the AI era, speed and scale are the power behind the throne. A whopping 93% of marketers now use AI to create content faster, and 81% leverage it to uncover real-time insights. Here’s a look at AI’s role in some of the top brands.

AI Ads in Action

Adidas for instance in Q1 2025, launched a hyper-localized campaign using generative AI to produce 72 unique ad creatives in six languages, all in under two weeks. The campaign not only slashed production time by 65% but also saw a 42% jump in engagement on paid social platforms. For global brands with diverse audiences, AI makes mass personalization both possible and profitable.

But AI’s strength isn’t limited to speed. It’s also sharpening the decision-making process. As reported by SEO.com, 90% of marketers say AI helps them make faster and more accurate campaign decisions, particularly in areas like ad optimization, targeting, and media planning.

Sephora’s 2025 campaign is a strong example of this. By integrating ChatGPT and AI scripts, the beauty brand created personalized skincare guides based on customer quiz responses. The result? A 21% increase in average session duration and a 16% jump in product sales during the campaign. By allowing real-time data to drive content delivery, Sephora proved that personalization at scale is not just possible, it’s profitable.

Another major shift AI is bringing to the table is in video advertising. Reports from TV Tech, The Economic Times, and Andava Digital reveal that 86% of advertisers are either using or plan to use generative AI for video, and by 2026, 40% of all video ads are expected to be AI-generated. This evolution is helping brands adapt messaging to audiences with remarkable speed and precision. Whether it’s swapping visuals to match regional preferences or tweaking tone for different demographics, AI is making video more responsive and cost-efficient than ever before.

And when it comes to ROI, AI is already rewriting benchmarks. According to Business Insider, Forever 21’s AI-driven campaign delivered a 66% higher ROI compared to its previous efforts, showcasing how AI doesn’t just make things faster, it makes them more effective.

Sharp Targeting and Smarter Attribution

AI also enables a level of targeting that traditional tools struggle to match. Predictive analytics, powered by machine learning, can segment audiences with incredible accuracy, optimize lead scoring, and identify high-intent users before they even convert. Research from Harvard DCE highlights how such granular targeting significantly boosts conversion efficiency. Sephora’s AI-guided skincare recommendations are a case in point. The content was tailored based on individual behavior and needs, leading to deeper customer trust, increased time spent on site, and ultimately, better sales outcomes.

Speaking about improving ad performance, our Performance Marketing Analyst at Triloke says, “With tools like Meta Pixel and GA4 working in sync, platforms are becoming more accurate and data-driven by the day. For example, by integrating GA4 and Pixel, we saw a real-time improvement in ROAS – from 0.45 to 2.90. These tools significantly enhance the learning phase, leading to better attribution tagging and stronger results, especially when using Meta’s Advantage+ Sales Campaign or Google’s Performance Max and AI Search Campaigns.”

Beyond targeting and content, AI plays a critical role in attribution. Machine-learning-powered models now analyze multi-touch journeys to assign accurate value to each interaction, helping marketers allocate budgets more efficiently. Sources like IBM, Wikipedia, and Business Insider show how this enables performance teams to move beyond outdated models and understand what really drives conversions.

And there’s a quieter but important trend emerging: traffic from AI-powered platforms. Since 2024, referral traffic from tools like ChatGPT and Google’s Bard has grown by nearly 9.7x, according to Ahrefs and SEMrush. Though still modest in scale, these platforms are becoming new gateways for product discovery, brand research, and even direct conversions. As conversational interfaces continue to shape the search landscape, this traffic stream is only expected to rise.

All signs point to one thing: AI is no longer a supporting player, it’s the engine powering a new era of performance marketing. Brands like Adidas and Sephora aren’t experimenting – they’re scaling, personalizing, and optimizing with intent. And the results speak for themselves. Whether it’s faster creative output, smarter targeting, or higher returns, AI is redefining what smarter ads really look like.

How is your brand leveraging AI to drive performance marketing?