Artificial intelligence and its application to the increasingly data-driven worlds of media, marketing and branding has continued to be a major talking point for global advertising companies and the brands they represent.
Everyone wants to know how this controversial, emerging new technology will give them the commercial edge in adapting to it?
So Frederik Kinge, CEO at global media consultants ECI Media Management, takes us through how sees the AI road ahead…
If 2023 is the year of anything, it’s the year that AI went mainstream. Suddenly, the whole world – including and perhaps particularly, the advertising industry, is talking about ChatGPT and generative AI and the opportunities and risks that they present.
These algorithms can be used to create original content, including text, video and imagery, opening the door to endless possibilities for brands who are seeking the holy grail of automation and personalisation.
Goldman Sachs estimates that artificial intelligence could drive an increase of 7% in world GDP and lift productivity growth by 15 percentage points.
But there are risks. Aside from the existential fears that the media has discussed at length, many of the potential pitfalls that advertisers need to navigate today will continue to exist, including ad dollars wasted on fake or bad impressions, disinformation and the lack of transparency.
So in the age of AI, what will differentiate the winners?
Data: More data scientists, fewer ad ops
Traditionally, technological advancements have transformed tools, from the abacus to Microsoft Excel.
Now, AI is becoming ubiquitous and no longer a competitive differentiator. Creative teams and media planners will incorporate AI for content creation and analytics.
The real differentiator lies in data quality. The quality of the output generated by AI depends on the quality and structure of the input data.
This emphasises the role of data scientists (people!) in devising effective data strategies. Meanwhile, ad operations roles focused on campaign trafficking execution will become less critical as AI algorithms prove more efficient.
AI simplifies ad distribution and targeting, enabling diverse ad formats and highly customised creatives, which were previously expensive to produce. This brings brands closer to apogee of advertising: individualised ads based on consumer preferences and behaviours.
Objectives: More strategists, fewer planners
Achieving success hinges on asking the right questions, setting the right objectives and key performance indicators (KPIs).
While sales and growth are central, media strategists must define objectives aligned with broader goals. Questions like target audience, reach and frequency become crucial. The timeframe for objectives is also vital.
AI can support both short-term and long-term growth and is not limited to programmatic advertising’s typical focus on short-term metrics.
However, it’s essential to ensure AI can distinguish between real consumers and AI-powered bots to prevent unproductive loops of AI-generated marketing.
Objectives must continue to be aligned with brand priorities rather than third-party interests to avoid distractions and silos. Collaboration and data ownership will help all parties harness AI’s power in the advertiser’s best interest.
Transparency: More control, less magic
AI offers incredible opportunities for optimising, personalising and automating ad campaigns, but transparency remains a challenge.
Tech giants like Google, Meta, and TikTok provide AI-powered tools that often operate as black boxes. Advertisers surrender control over data and campaign goals, leading to concerns about oversight and trust.
Drawing parallels with programmatic advertising, advertisers must ensure that AI-driven campaigns are benchmarked for effectiveness.
When done right, programmatic drives ROI and cost efficiency in data management – but done badly, it lacks transparency and focuses on proxy KPIs that, in reality, have little to do with effectiveness.
For AI to be truly beneficial for advertisers, the outcomes will need to be benchmarked in order to truly understand whether the agency’s expertise and technology are contributing to success.
What’s next: More discussions, more risks
The future of AI raises ethical, environmental, and privacy concerns and advertisers need to be willing to engage in discussions with their agencies and partners and adopt a test-and-learn mindset.
Empowering machines to make decisions on behalf of people and the energy demands of AI pose ethical challenges.
Privacy could be compromised as AI rapidly analyses personal data. Copyright issues may also arise in generative AI.
The use of AI in media campaigns has triggered discussions about fee models. Agencies have been acquiring specialist shops such as Essence (MediaCom) and Merkle (Dentsu), while Publicis purchased Sapient in 2014, demonstrating their desire to be leaders in an AI-powered industry.
And while these acquisitions are enhancing productivity and value, they are also prompting questions about the fair distribution of gains.
Independent third parties with in-depth knowledge of design fees and KPIs /value tracking can help navigate discussions on new fee structures.
How to win in the age of AI: Balance and data
As AI’s impact on business and personal lives is still evolving, success in this era requires two key factors.
First, balancing AI tools with human judgment to maintain a responsible advertising industry.
Second, leveraging data effectively by structuring and securing ownership of data, combining it with benchmarking data, and defining objectives aligned with business goals. Independent performance auditors can assist in preparing for an AI-driven future.
In conclusion, 2023 has ushered in the age of AI, transforming the advertising landscape. To differentiate and succeed, brands must prioritise data quality, set strategic objectives, seek transparency, engage in discussions about AI’s implications, and strike a balance between AI and human expertise while leveraging data effectively.
These factors will be critical in determining who emerges as the winners in the age of AI.