International Business Machines (IBM - Free Report) recently collaborated with Best Western Hotels & Resorts. The artificial intelligence (“AI”) capabilities of IBM Watson Advertising will aid Best Western to deliver interactive ads to consumers enabling customized vacation planning.
In an effort to make vacations more pleasurable, Best Western's Watson Ad will assist the consumers with tailor-made scheduling itineraries. The travelers can make a fulfilling conversation with the AI driven ad as per their convenience. The new ads have been made available on The Weather Channel app and weather.com. We believe IBM’s efforts to assist businesses with emerging digital advertising bodes well for its top-line going forward.
The ad will provide users with real-time guidelines, suggestions regarding Best Western's accommodations, amenities and offers, across North America locations. This will enable the vacationers to shape their journeys accordingly and add value to their trip. The AI driven, Best Western's virtual 360 tour enhances the ad further. The tool enables the travelers to virtually visit various Best Western properties on their way, facilitating better decisions.
The Ad will act as tour guide, eventually leading to enhanced user engagement, aiding Best Western with enriched data driven insights. Given the alluring prospects of AI being deployed in advertising, IBM’s Watson Ads campaign holds promise.
What The Investors Need to Know?
IBM’s stock has lost 7% year to date, against the S&P 500’s rally of 2.9%.
The first-of-a-kind AI-driven advertising solution, Watson Ads employs robust machine learning (ML) capabilities with natural language processing. The ad viewers gain from the enhanced customized experience. The businesses can benefit from better knowledge of ongoing trends, improved engagement of customer base and new brand insights.
Notably, Watson Ads have found application across consumer healthcare, entertainment, automotive and consumer packaged goods industries, among others. In the hospitality space, Best Western is driving innovation by being the pioneer to adopt Watson Ads.
Reportedly, Watson Ad campaigns boast of average engagement times of around 2-3 minutes, more than a standard Ad. This provides IBM an edge over its contenders in this space.
Per Juniper Research data, spending in digital advertising is expected to increase at a CAGR of 18% to $420 billion by 2022 from $184 billion in 2017. Moreover, the report forecasts approximately 75% of total delivered digital ads will leverage AI to effectively target users by 2022.
Per a MarketsandMarkets report, AI in marketing market is envisioned to grow at a CAGR of 29.8% to $40.1 billion by 2025 from $5 billion in 2017. As a result, IBM’s Watson Ads campaign seems well-positioned to take advantage of projected growth.
The company remains well poised to capitalize on growth prospects that the digital advertising market offers. Increasing spending in this regard is a positive. The aforementioned reports reinforce our belief that Watson Ads gaining adoption hold promise.
IBM has been a pioneer when it comes to helping businesses digitally transform and evolve. The tech giant continues to bring innovation to its services to help the enterprises leverage the emerging technologies, including the likes of cloud, AI, Internet of Things (“IoT”), among others.
IBM’s advanced AI, IoT, blockchain, cloud, ML capabilities, among others makes its offerings well poised to gain robust adoption. The traction witnessed by the company’s Watson Ads offering boost the top line, consequently aiding IBM to better compete against peers.
Zacks Rank & Key Picks
IBM currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector are Seagate (STX - Free Report) , Mellanox (MLNX - Free Report) and Micron (MU - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The projected long-term earnings growth rate for Seagate, Mellanox and Micron are 18.9%, 15% and 8.2%, respectively.
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