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From keywords to conversations: how AI is reshaping ecommerce advertising

Martech Outlook | Friday, June 27, 2025

Charlene Gao, Head of Business Development China, Preciso

A decade ago, folks would have laughed if you suggested you could shop online simply by chatting with your AI assistant. But in 2025, that’s where we’re heading.

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As reported by TechRadar in April, OpenAI is set to support in-chat purchases via Shopify, meaning you’ll be able to research, compare, and buy products, all within your ChatGPT interface. When this happens, it will have a huge impact on not only how consumers buy, but how companies advertise products, bringing about a brand new marketing channel to master.

But this isn’t the first time AI has forced a shift in ecommerce advertising. In recent years, we’ve seen AI layered into various stages in the advertising lifecycle to help drive efficacy and performance.

Ushering in a new era of ad creatives

When I had my own ecommerce business, I spent a huge amount of time on the creative - thinking up headlines and descriptions, tweaking the language, and agonising over word choices. And if I wanted to test different variations, that would mean spending even more time repeating the same process over and over.

But with the emergence of AI, there is now an alternative. Instead of spending days or even weeks crafting headlines we don’t know will work, AI can generate hundreds of options at the push of a button.

Text-to-image: One of the most popular applications of AI in ecommerce advertising is in text-to-image ad generation. This is where you type in your keywords and product info, and the software will generate multiple different creative options for you, including elements such as name, description and headline. Simply describe the product to the AI, and it’ll generate as many ad variations as you need. Then you can A/B test these options to see which are the most effective. This use of AI is especially effective for non-branded products, dropshipping and white-label sellers, where the creative is constantly changing for different audiences. 

URL to text, image and description: As useful as text-to-image is, it’s not generally used on branded products, because the creative already exists - clearly, you don’t need to be generating names and descriptions for products that already have those things. Instead, URL to text, image and description can be used to automatically pull in the product information to use in your creative. Simply feed the URL into your native ad platform, and the AI will come up with the product name, image and description. It will also dynamically generate headline variations based on the information it pulls in.

Smart bidding

It’s not only the creative process that has changed with the advent of AI. Since the dawn of real-time bidding, AI has played a key role. Today however, the process of smart bidding is much more sophisticated, delivering a multitude of benefits for advertisers of all sizes, including:  

• Broader reach and smarter targeting: Identify and optimise for a wider range of search queries beyond the most obvious keywords

• Real-time, data-driven decisions: Analyse multiple real-time signals such as device, location and user intent to adjust bids precisely for each auction

• Automated learning and continuous improvement: Continuously learns from campaign data to improve bidding strategies and adapt to changing market conditions.

• Flexible and value-based bidding: Set varied goals such as different ROAS targets, optimising bids to maximise specific business outcomes

• Accessibility for all advertisers: Sophisticated smart bidding features are now accessible to businesses of all sizes, simplifying campaign optimisation.

The end result is a far more advanced form of smart bidding that gives any seller a competitive advantage - not only for native ad formats, but for display, video, audio and other channels. 

The rapid rise of AI in recent years has been embraced by a number of demand-side solutions - from the likes of Google, The Trade Desk, and Preciso, to native ad platforms such as Taboola, Outbrain and Ultima.

However, only those with the most sophisticated algorithms will drive the performance advertisers are looking for - and not everyone has the budget to use the larger platforms. Finding that sweet spot of cost-effective, premium technology will be key in the coming years. 

What’s more, recent data, coupled with customer feedback, is already showing that some of the smaller DSPs are outperforming the major players, leveling the playing field for the industry. 

This is only the beginning

The AI features I mentioned above have already changed how sellers advertise their products. And with new integrations such as ChatGPT x Shopify, we’re getting a taste of how much things could change again in such a short space of time.

Instead of viewing products on shopping websites or search results, third-party AI applications will make recommendations based on the information they can mine, and that’s where advertising will enter the new shopping experience. 

Just as it once seemed far-fetched to shop through an AI assistant, it may soon feel outdated to advertise without one. The brands that thrive will be those that evolve alongside their customers, meeting them not just where they shop, but how they shop.

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