How Will AI Shape the Future of Digital Advertising?

First off, let us provide a quick disclosure: This blog post was written by a human.

It’s a bit crazy to think that, this time last year, no such statement would have been necessary. Sure, if you got enough monkeys with keyboards together for an infinite amount of time, they would eventually have written this very piece (along with the complete works of William Shakespeare). That’s just science. But in 2023, there’s a new player in the content creation game, and it has the potential to disrupt just about every aspect of digital advertising: Generative AI.

The next generation artificial intelligence tech burst onto the scene late last year with the debut of ChatGPT and DALL-E 2, both from Silicon Valley AI pioneer OpenAI. ChatGPT, in particular, became an over(five)night sensation when it reached a million users in just five days. And in January 2023, ChatGPT was estimated to have 100 million active users—making it, at the time, the fastest-growing consumer app of all time. To put that in perspective, it took TikTok nine months (and Instagram two-and-a-half years) to hit 100 million users.

One of OpenAI’s biggest early investors, Microsoft, has since poured an additional $10 billion into the company and announced a host of new AI-powered features, including a ChatGPT-powered Bing search engine that launched in May 2023 to its million-plus person waiting list. And that interest could be a big (dollar) sign of what’s to come: Microsoft estimates that gaining just 1% more market share in search could translate to an additional $2 billion in ad revenue.

In turn, Google introduced the world to Bard, its own AI chatbot, and invited users to test its new Search Generative Engine, or SGE, which Google says “uses generative AI to give you more information and context to your searches.” Bard initially stumbled out of the gate upon its February 2023 release—pumping out inaccurate information that embarrassed its owner and rattled Alphabet’s stock price—but Google has turned things around in recent months as it introduced new AI-powered features in Google Docs and Gmail and rolled out Bard to new key markets, sending Alphabet stock soaring.

And another potential player, Meta, has spent nearly 10 years and billions of dollars on AI, but had to remove its new chatbot “Galactica” from the internet after just three days after receiving “an avalanche of complaints about Galactica’s mishaps”.

Altogether, AI is already proving to be a powerful disruptive force in the tech world, and the wider implications of this potential AI revolution could be extraordinary. Microsoft’s own founder, Bill Gates, has called AI as major a tech innovation as the internet or the PC, and also warned that AI’s emergence will inevitably result in the loss of white collar jobs. Or, as the Harvard Business Review put it, “The question isn’t whether AI will be good enough to take on more cognitive tasks but rather how we’ll adapt”.

But how will AI—be it generative or otherwise—affect marketing and media buying?

AI’s Impact on Digital Advertising: Today and Tomorrow

In some ways, AI already has its virtual fingerprints all over digital advertising. Machine learning, which most would consider falling under the larger “AI” umbrella, is at the heart of programmatic advertising and real-time bidding. And digital advertising platforms leverage AI to facilitate custom campaign optimizations, facilitate time savings, reduce ad spend waste to optimize media, increase conversions with best device type, placement, and price, and inform decision-making with real-time data and insights.

Top agencies and brands have relatively quickly found additional applications for generative AI today. According to a recent Basis survey, nearly three-quarters (72%) of marketing and advertising professionals say they currently use generative AI tools as part of their digital marketing/advertising work at least once a month—embracing the tech for everything from content creation to research to personalization. And that large group of early adopters may be the first domino to fall in a new, AI-driven future of marketing, with approximately four in five marketers saying they believe AI will radically transform digital advertising in the next 3-5 years.

Now, how will AI shape the future of the industry? To find out, we asked Basis Technologies’ April Weeks (EVP, Media Services & Operations), Amy Rumpler (SVP, Paid Search & Social), and Ryan Manchee (SVP, Brand Marketing) for their perspective on all the latest buzz surrounding AI and its potential impact on media, marketing, and digital advertising: 

How are you feeling about all of the AI developments of the past few months—particularly as they pertain to our industry?

April Weeks: It’s an interesting time to be in the industry. During a relatively short period of time, AI has become a consistent topic of conversation with what seem to be endless opportunities. The rate of evolution is fast. I believe benefits and opportunities will start to emerge across the advertising industry that enable more efficiency and potentially better work.

Amy Rumpler: I think they’re very exciting, and honestly, not that surprising. AI has been integrated with media in various ways for a while now, although most of those developments have been on the back end, driving innovation like how ads are targeted to—and appear in front of—consumers.

Recently, those features have started to take more of a front seat for media buyers to explore and interact with. In social, for example, Meta’s Advantage+ features use machine learning (or AI) to help you create campaigns that can efficiently and effectively reach the right audience with a variety of creative options and optimize in real-time to drive performance. ChatGPT and similar AI models are taking these concepts a step further by making the interaction between the person using the tool and the tool itself feel more conversational and less transactional. I’m interested to see if that helps build trust and confidence in AI and its ability to do the job requested of it. If people believe the machine can do what you’re asking it to quickly, effectively, and to the standards of what you’d expect if a person was behind the controls, then adoption will rise—which benefits both the tools’ continuing to improve, and the individual’s ability to focus on other tasks.

At the same time, I think like any other evolving technology, there’s a need for better understanding of how these tools will be used, policed, and controlled that’s necessary to address (and probably should have happened before they became broadly available to begin with). For example, if we’re using an AI app like ChatGPT to return search query results, then we need to be able to control what information these AI systems have access to, how they compile it, deem it credible or accurate, return it in a way that’s not discriminatory, inflammatory or fictitious, and credit the original source (if available). Without a strong legal precedent, and an internet full of false information, I think this question has to be addressed immediately and should be a primary focus of this discussion. 

Ryan Manchee: I’m absolutely fascinated. Twenty years ago, when I first started in the advertising industry, the most significant innovations were around rich media advertising, ad serving, and search. Mobile was nascent, and dial up was still commonplace. Seeing how the industry adapts and adopts new technology is what makes our jobs so much fun. I believe we are in the very early stages of AI, but seeing how the language models allow for greater accessibility and exploration of this technology is going to drive smart, creative ways to rethink approaches to marketing.

What impact do you think AI will have on the advertising industry in the next three-to-five years?

AW: The impact will be significant and likely on a similar scale to the emergence of the internet, and the disruption that resulted across the industry. Current processes, workflows, and performance insights will be automated and ultimately change how work is created, delivered, and possibly monetized.

AR: I hope that AI will help further streamline and automate the work we do to create, implement, and optimize campaigns so that strategists, creatives, and analysts can spend more time improving and ideating and less time on manual tasks. When it comes to search and social specifically, I fully believe AI will be integrated in how we develop and optimize content, research keywords and other targeting opportunities, identify new partners and placements for plans, and adjust things like budgets or flight dates in more automated ways than we can imagine based on our surface level experiences with AI thus far.

RM: I’m bullish on the possibilities, but I don’t think anyone has it figured it out quite yet. My hope is that the hype around AI will bring a renaissance to creativity and redefine what we mean by “personalization”. Is a hyper-personalized ad really just swapping out the copy of a city name, distance to a location, and plugging in the weather while swapping a background image in an ad? Or is it about creating an experience that is inspiring in a unique and compelling manner? I don’t view AI as a threat to anyone’s job in the next three-to-five years, but I do believe it will take the place of responsibilities from three-to-five years ago (and today).

What should marketers be doing right now to prepare for the changes AI will bring to the industry?

AW: Marketers should keep a close tab on AI developments within the industry, start to identify how AI could be leveraged within their organizations, and begin testing to gain early learning.

AR: The first thing marketers should do is take time to educate themselves on what’s currently possible and test the tools that are publicly available to start to get familiar with them—including their capabilities and their limitations. There’s a lot of speculation in the news right now, but I think the best way to start to envision how AI might change or benefit your current role is to experiment with it yourself.

RM: Explore, experiment, and get more people and teams involved. There are creative opportunities and challenges, there are legal challenges and opportunities, and there are operational workflow opportunities and challenges. Don’t make rash decisions, but have some fun and stay curious.

What’s your hottest take on how AI will impact digital advertising?

AW: AI will drive increased automation and fundamentally shift how we work across the industry. What today takes a week will be compressed to a day with an increased level of insight and intelligence.

AR: I think it will revolutionize the way we as marketers think about creating and implementing advertising campaigns, and it will equally impact the way we as individual consumers of media interact with and experience content, entertainment, and the internet at large—and in a shorter period of time than some might think.

RM: While most of the focus right now is on the visual and content outputs of AI, the biggest innovations in the industry will come from how it helps marketers more smartly plan, execute, and optimize their digital media.

Given its potential impact and acknowledging its risks (as raised by experts on matters such as privacy, misinformation, job security, etc.) should AI be swiftly regulated?

AW: The industry should embrace regulation at the onset. As we’ve seen, regulation is an important part of digital advertising, and establishing the right regulatory framework early will enable adoption and maximize the benefits of AI.

AR: Yes, absolutely.

RM: It’s too early to regulate, but early adopters should be aware of potential legal challenges. With that said, my high school freshman son has classmates who have attempted to pass off AI generated essays as their own, and this is being regulated!

Any last thoughts on AI you want to share?

AR: Advancements in AI are going to cause a paradigm shift that causes younger generations to reconsider career focus areas, create rise to new fields of expertise, and reshape the future of how we use and support digital, connected, AR, VR, and internet-enabled devices and tools. But it’s also going to require a deep understanding of how to get the most out of the machines powering the systems, as they’ve not yet developed to the point that they can 100% operate independently and return accurate information or recommendations without better inputs from their human users.

People need to understand that they can’t assume these tools are going to return the same quality of outputs as they [humans] could. As an example: if you ask an AI to write a poem describing tulips, it might be factually correct, but it also might be nonsense that doesn’t connect on an emotional level the way you or I might write a poem describing tulips. The same is true if you ask an AI program to develop an ad promoting a new brand of diapers to women who have just given birth. There are just some things that an AI program can’t yet fully grasp or understand, but that a person maybe could.

RM: Watch out for the fakes. Both the companies that are jumping on the AI bandwagon calling their pseudo tech AI, and the fake information, fake visuals, and fake work. Our future will not be given over to AI, but these wonderful new tools and systems will help the smart, creative people in our industry continue to do amazing work.


Surveying the Landscape of Generative AI in Advertising

With so much hype around generative AI’s applications in marketing and advertising, it can be hard to discern what current adoption looks like and how your peers and competitors are thinking about the future of this new technology. To provide some insights in this arena, we surveyed over 200 marketing and advertising professionals from top agencies, B2B and B2C companies, non-profits, and publishers. Download our report today to explore how marketers like you feel about generative AI and gain new insights on how it’s poised to shape the industry going forward.

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