How the generative A.I. boom could forever change online advertising

Soon after ChatGPT hit the market last year and instantly grabbed headlines for its ability to appear like a human in answering user queries, it became a digital marketing guru. Shane Rasnak Experimentation began.

As someone who has built his career creating online ad campaigns for clients, Rasnak has seen how generative AI can transform his industry. Whether it comes to headlines for Facebook Short ads or blurbs from ad copy, Rasnaq said, jobs that used to take 30 minutes to an hour are now 15-minute projects.

And this is just the beginning.

Rasnak also plays with generative AI tools like Medjourney, which turns text prompts into images, as it attempts to dream up compelling images to accompany Facebook ads. The program is particularly useful for someone without a background in graphic design, Rasnak said, and can help along with popular graphic editing tools from Canva and Adobe Photo shop.

While everything is still quite new, Rasnak said that generative AI is “like the advent of social media” in terms of its impact on the digital advertising industry. Facebook and Twitter have made it possible for advertisers to target consumers based on their likes, friends, and interests, and generative AI now gives them the ability to create personalized messages and visuals in building and refining campaigns.

“In terms of how we market our work, the outputs, the quality and volume they can deliver, and how personalized you are as a result of that, that completely changes everything,” Rasnak said.

Rasnak is not alone in the hype train.

meta the alphabet And Amazon, pioneers of online advertising, are all betting that generative AI will eventually become the foundation of their businesses. Each of them has recently launched or announced their products plans To develop various tools to help companies more easily create messages, images and even videos for their own platforms.

Their products are still mostly in beta stages and, in some cases, have been criticized for rushing to market, but advertising experts told CNBC that, taken as a whole, generative AI represents the next logical step in targeted online advertising.

“This will have a seismic effect on digital advertising,” said Christina Lawrence, executive vice president of consumer experience and content at Razorfish, a digital marketing agency that is part of the advertising giant. Publicis Group.

In May, Meta announced an AI Sandbox test suite for companies to more easily use generative AI software to create background images and try out different ad copy. The company also introduced updates to its Meta Advantage service, which uses machine learning to improve the efficiency of ads served on its various social apps.

Meta is promoting the Advantage suite as a way for companies to get better performance from their campaigns afterwards apples The iOS 2021 privacy update limited its ability to track users across the Internet.

Meta Advantage has been gaining traction with retailers who use it for automated shopping ads, according to data shared with CNBC by the online marketing firm. city.

Pharos data showed that in May 2023, nearly 2,100 companies spent $47 million, or about 27.5% of their total combined monthly advertising budgets, on Advantage+. A month ago, these companies directed 26.6% of their budget, or $44.9 million, to Advantage+.

Last August, when he was officially dead for the first time Advantage + Automated Shopping Ads Companies put less than 1% of their spend on in-display meta ads.

Varos CEO Yarden Shaked said the increase shows Facebook has had some success convincing advertisers to rely on automated ad technology. However, Shaked said he’s “not sold on the creative piece yet,” regarding Meta’s fledgling foray into providing generative AI tools to advertisers.

Likewise, Rasnak said Midjourney’s tool isn’t “quite there yet” when it comes to producing photorealistic images that can be incorporated into an online advertisement, but it is effective at creating “cartoonish designs” that resonate with some younger clients.

Jay Pattisalthe analyst at Forrester, said that several major hurdles are preventing generative AI from having a significant immediate impact on the online advertising industry.

One is brand integrity. Companies don’t feel comfortable outsourcing generative AI campaigns, which can generate images and phrases that reflect certain biases or are otherwise offensive and can be inaccurate.

Earlier this year, Bloomberg News is found AI-generated images from the popular Stable Diffusion tool have produced images that reflect a number of stereotypes, creating images of darker-skinned people when fed claims such as “fast food worker” or “social worker” and associating lighter skin tones with jobs Highly paid.

There are also potential legal issues when it comes to the use of generative AI powered by models trained on data “scraped from the internet,” Pattisal said. Reddit, Twitter and Stack Overflow have said they will charge AI companies for using the piles of data on their platforms.

Scott McKelvey, a longtime writer and marketing consultant, pointed out other limitations surrounding output quality. Based on his limited experience with ChatGPT, the AI-powered chatbot created by OpenAI, McKelvey said the technology fails to produce the kind of long-form content that companies would find useful as promotional copy.

“It can provide fairly general content, drawn from information that’s already there,” McKelvey said. “But there is no distinct voice or point of view, and while some tools claim to be able to recognize your brand voice based on your prompts and input, I haven’t seen that yet.”

An OpenAI spokesperson declined to comment.

A Meta spokesperson said in an email that the company has conducted extensive research to try to mitigate bias in its AI systems. In addition, the company said it has brand safety tools aimed at giving advertisers more control over where their ads appear online and will remove any AI-generated content that violates its rules.

“We are actively monitoring any new trends in AI-generated content,” the email read. “If the content of the content, regardless of how it was created, violates our Community Standards or our Advertising Standards, we remove the content. We are in the process of reviewing our public policies to ensure that this standard is clear.”

A Meta spokesperson added that as new chatbots and other automated tools come to market, “the industry will need to find ways to address the new challenges of responsible deployment of AI in production” and “Meta intends to remain at the forefront of this work.”

Stacy Reed, an Online Advertising and Facebook Advertising Consultant, is currently working on integrating generative AI into her daily work. She uses the software to come up with variations of Facebook ad headlines and short copy, and said it was useful in a world where it’s hard to track users online.

Reid called generative AI a good “starting point”, but said companies and marketers still need to hone their brand messaging strategy and not rely on generic content. She explained that generative AI does not “think” like a human strategist when producing content, and often relies on a series of prompts to refine text.

Thus, companies should not simply rely on technology to do the big picture and think about figuring out which topics resonate with different audiences or how to execute key campaigns across multiple platforms.

“I deal with big brands who are struggling, because they are so disconnected from the average customer that they no longer speak their language,” Reed said.

Currently, industry experts said, major advertising agencies and major companies are mostly using generative AI for pilot projects while waiting for technology to develop.

Earlier this year, Mint Mobile I aired an advertisement Actor and co-owner Ryan Reynolds is shown reading text he said was generated from ChatGPT. He asked the program to write the advertisement in his voice, to use a joke and a curse, and to let the audience know that the promotion was still going on.

After reading the AI-generated text, Reynolds said, “This is a little terrifying, but it’s compelling.”

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