Why it matters:
- U.S. shoppers are deliberating longer and seeking out more information before making purchases while tapping AI tools, which have upended search. So, businesses need new ways to reach them.
- Against that backdrop, Google has found that businesses tapping its AI Max for Search tech to serve up more relevant ads are seeing 27% more conversions at a similar cost-per-ad than traditional keyword searches.
- Luxury bedding company Boll & Branch, for example, saw its sales double, and new customer acquisitions jump 130% during a peak holiday 2024 period using Google AI-powered tools and is expecting to replicate that success this season.
The way American consumers make purchasing decisions has changed significantly over the past year, Courtney Rose, Vice President, Retail, at Google, told CO—. Budgets are tight, and consumers are deliberating longer, weighing price, quality, and convenience before buying and using artificial intelligence (AI) tools to conduct broader, more open-ended searches for products.
“Search has become longer, more conversational, more visual, and more upper funnel in terms of what people are looking for,” Rose said. “That creates a lot of opportunity, and advertisers have to figure out how they’re going to take advantage of that.”
The key challenge for advertisers, Rose said, always has been deciphering how consumers go from discovery to purchase decisions. Google is using AI tools to help businesses “capture that consumer, capture that demand, and convert that demand from the discovery stage all the way through decision-making,” she said.
AI is making it possible for Google ad platforms to deliver “the right ad at the right time for the right person in a way that is really efficient for an advertiser,” Rose said. “If you’re a small business or if you’re Walmart, you don’t want to be wasting your ad dollars.”
A survey by marketing and advertising technology company Epsilon found that 94% of marketers have adopted AI and that 41% of businesses say that their return on ad spend has improved the most due to AI, with 47% saying AI capabilities are extremely important in their vendor selection.
[Read more: How Brands Are Using AI to Optimize Digital Out-of-Home Advertising]
Moving beyond shoppers’ queries to ‘predicting what they might need next’
Google has been rolling out AI-powered tools for businesses for several years, and this spring it announced what it calls its most powerful program to date, AI Max for Search. In announcing the launch in May, Google described AI Max as enabling Google and its advertisers to move beyond matching shoppers’ queries to “predicting what they might need next” to deliver more relevant ads.
“AI Max is one of the newest products we have that really takes advantage of all the changing consumer behavior we see on search,” Rose said.
It can use all the information from an advertiser’s e-commerce website and social media content to figure out the best place to direct a potential customer depending on their search and create headlines and content for ad messages that highlight different product offerings depending on what the customer is seeking.
AI is making it possible for Google ad platforms to deliver ‘the right ad at the right time for the right person in a way that is really efficient for an advertiser,’ Rose said.
Retailers using AI Max are seeing 27% more conversions compared to traditional search, according to Google data.
Businesses can access it “as easily as checking a box in your Google ads account that you want to use AI Max,” Rose said. “That is why it is amazing for small businesses who don’t have hundreds of people in their marketing departments. You can click that box and the AI is going to work for you,” she said.
Luxury bedding and home goods company Boll & Branch saw its Cyber Week sales double year over year and new customer growth surge 130% during the 2024 holiday, thanks to Google AI-powered ad campaigns, Michelle Carrara, Vice President, Growth and Analytics, at Boll & Branch, told CO—.
[Read more: 3 Founders on the Critical Business Decisions That Proved Pivotal to Success]
Luxe bedding brand Boll & Branch boosts average order value via AI-powered ad campaign
Boll & Branch used Google’s AI-powered Performance Max campaign — which places ads across all Google channels, including Search, YouTube, Gmail and Maps, depending on the best customer fit — to boost average order volume (AOV) during the 2024 holiday season.
The upscale bedding brand had seen that encouraging customers to buy custom bundles of bedding — buying a matching blanket and other items for a complete bed set, along with sheets — was an effective way to boost AOV, but it had been struggling to find the best advertising message and channel to promote that.
The Google Ads team suggested that they try a specific Performance Max campaign for bundles, “and it was a huge success,” Carrara said. “We were able to double the penetration of bundles with new customers. AOV grew 10% for us year over year,” she said. “We’re still running that campaign today.”
“We didn’t have to spend any more money to get these customers, and yet they spent 10% more with us,” she said.
Carrara spoke at Google’s Think Retail conference in September, attended by CO—, and said brands and businesses should lean into new AI tools, she told the audience of marketers and retailers preparing for this holiday season.
“She used the analogy of going skiing,” Rose said. “When you have all these new tools at your disposal, the human reaction is to sort of lean back, and say, ‘I’ve got to understand all of this before I figure out what I am going to do.’ But if you’re at the top of a mountain and you’re going to ski down and you lean back, you fall. If you lean back and you have all this fear, you don’t get the best outcome,” Rose said.
Boll & Branch, Carrara told CO—, believes there is an advantage to being an early adopter with AI. “We try to adopt the technology that makes the most sense for our business and serves our customer,” she said. “We’re all about experiences and providing the highest level of service for our customers, where every single touchpoint should feel really elevated and personal to you,” and AI is helping provide that, Carrara said.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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