Wall Street and marketers both cheer as Google adds AI to its advertising business

Greg Sandoval/Business Insider

Google CEO Sundar Pichai.

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• Google this week provided details about new ad tools enhanced by artificial intelligence.
• The new ad formats are receiving kudos from marketers, as well as Wall Street analysts.

Google's new ad tools, enhanced by artificial intelligence technology, are receiving positive reviews from marketers, as well as from Wall Street analysts.

On Tuesday, Google provided details about the new formats that will roll out in coming months. These new ad formats are designed to offer more automation in respect to ad creation and measuring the effectiveness of those ads.

They also will make it easier for advertisers to launch campaigns across Google's properties, including YouTube and Google Maps. Google is due to report earnings for the second quarter on July 23 following the bell, and the new tools certainly aren't going to hurt the company's chances to top the $21.4 billion in ad sales it posted last quarter.

"Overall, we view the combination of continuous improvement, culture of innovation, and superior engineering capabilities as supportive of our positive view on Alphabet shares," wrote Colin Sebastian, senior research analyst for Baird Equity Research.

AI is finding its way into more and more of Google's businesses. The company has labored for years on developing the tech and it appears it is now preparing to reap some benefits.

New AI tools help save time

Waymo, Alphabet's self-driving car firm, uses AI to identify objects and navigate. AI enables the Google Assistant to understand and speak in natural language. And now, AI is helping Google get a step up on advertising rivals.

One of the new ad vehicles that's received plenty of attention this week is Google's Responsive Search Ads. Through machine learning, ads adjust to suit the individual performing a search. The ads aren't static and will change depending on the user and the query as well as what ads are faring the best.

This tool saves an advertiser time because they used to have to manually optimize ads.

"Automation won't change the marketer's responsibilities, but it will change the tactical execution," Jessie Dearien, vice president, of paid search at iProspect, told Search Marketing Daily on Thursday.

Another one of Google's new ad tools is the ability for merchants to buy ads directly through online retail platforms, specifically Shopify. Google has said that more retailing partners are launching soon.

"The company's new tool will enable the merchants to showcase their consumer product ads," Zacks Equity Research, an investments data and information service, wrote: "We believe the recent move will strengthen Google's ad services portfolio further which bodes well for its improving customer base."

Get the latest Google stock price here.