The integration of artificial intelligence (AI) in advertising has captivated the industry despite some lingering hesitations. The use of AI has demonstrated significant advancements, especially in creative ad production and operational efficiencies. One notable example is from a major beverage giant.
Its AI-driven remake of the iconic “The Holidays are Coming” ad was applauded for its quality, showcasing the potential of AI technology in creative applications. Another major brand unveiled an advertisement at Cannes created entirely with a text-to-video tool, marking a milestone for high-profile AI-generated content. AI is also reaching beyond creative ad production.
One IT management platform used AI to enhance the visual aspects of human-driven concepts and scriptwriting, projects that would traditionally incur costs up to $1 million. Even philanthropic organizations like PetSmart Charities leverage AI for tasks such as generating colorful profiles of animals available for adoption. Additionally, customer service chatbots powered by AI are becoming capable of handling the workload of hundreds of human employees.
Ad agencies are making significant investments in AI.
AI reshapes advertising industry
Several leading agencies have disclosed intentions to spend substantial amounts on the technology.
A Forrester survey revealed that many ad executives are engaging with generative AI. Brands are increasingly recognizing AI’s capability to improve ad targeting and message customization. Jonathan Woolf, Chief Revenue Officer at an AI analytics provider, highlighted the effectiveness of AI in predicting conversion rates and optimizing message timing based on user behavior, leading to substantial increases in engagement rates.
Despite these advancements, concerns persist. According to September 2024 research from the World Federation of Advertisers, 80% of multinational corporations are uneasy about their creative and media agencies’ use of generative AI. Top concerns include legal risks (66%), ethical implications (51%), and potential damage to reputation (49%).
JJ Schmuckler, a chief growth officer, noted that while AI’s application is growing, clients still value the human element in storytelling and are not yet requesting fully AI-generated campaigns. As AI technology continues to evolve, it presents opportunities to enhance both the creative and operational facets of advertising, offering brands cost-effective solutions to complex problems. The role of AI in the industry looks set to expand, becoming an indispensable tool for modern advertising strategies.
