How the generative AI growth may change internet advertising endlessly

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Shortly after ChatGPT launched last year and immediately made headlines for its ability to appear human when responding to user queries, digital marketing veteran Shane Rasnak began experimenting.

As someone who had built a career in creating online advertising campaigns for clients, Rasnak saw how generative artificial intelligence could transform his industry. Whether there were headlines for Facebook Whether it’s ads or short excerpts from copywriting, Rasnak said jobs that would have taken him 30 minutes to an hour to complete are now 15-minute projects.

And that is just the beginning.

Rasnak also plays with generative AI tools like Midjourney, which turns text-based prompts into images while trying to come up with compelling visuals for Facebook ads. According to Rasnak, the software is particularly handy for someone without a graphic design background, and can be helpful along with popular graphic editing tools from Canva and others Adobe’s Photoshop.

While it’s all brand 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 enabled advertisers to target consumers based on their likes, friends and interests, and generative AI now gives them the power to create tailored messaging and visuals as they build and refine campaigns.

“In terms of how we market our work, the output, the quality and volume they can release, and how personalized you can be through that, it just completely changes everything,” Rasnak said.

Rasnak is far from alone on the hype train.

Meta, alphabet And Amazon, the leading providers of online advertising, all anticipate that generative AI will eventually become the core of their business. They have each recently introduced products or announced plans to develop various tools to help companies more easily create news, images and even videos for their respective platforms.

Their products are mostly still in the testing phase and have in some cases been criticized for rushing to market, but advertising experts told CNBC that overall, generative AI represents the next logical step in targeted online advertising.

“This will have a huge impact on digital advertising,” said Cristina Lawrence, executive vice president of consumer and content experience at Razorfish, a digital marketing agency that is part of the advertising giant Publicis group.

In May, Meta announced its AI Sandbox test suite, making it easier for companies to use generative AI software to create background images and experiment with different copywriting. The company also rolled out updates to its Meta Advantage service, which uses machine learning to improve ad serving efficiency across its various social apps.

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

“Personalization at scale”

As these new offerings improve over time, a bike company, for example, could theoretically target Facebook users in Utah by showing AI-generated graphics of people pedaling through desert canyons, while showing users in San Francisco cyclists crossing the drive the Golden Gate Bridge, advertising experts predict. The text of the ad could be customized depending on the age and interests of the person.

“You can use it for this kind of personalization at scale,” Lawrence said.

According to data shared with CNBC by online marketing company Varos, Meta’s Advantage service is gaining popularity among retailers who use it for automated shopping ads.

As of May 2023, about 2,100 companies spent $47 million, or about 27.5% of their total monthly meta-ad budget, on Advantage+, Varos data showed. A month earlier, these companies had committed 26.6% of their budget, or $44.9 million, to Advantage+.

When Meta officially announced its Advantage+ automated shopping ads last August, companies were investing less than 1% of their Meta ad spend in the offering.

Mark Zuckerberg, CEO of Meta Platforms, speaks at Georgetown University in Washington on October 17, 2019.

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Yarden Shaked, CEO of Varos, said the surge shows Facebook is having some success in convincing advertisers to rely on its automated advertising technology. However, Shaked said he’s “not yet convinced on the creative side” about Meta’s incipient push to bring generative AI tools to advertisers.

Likewise, Rasnak said that Midjourney’s tool is not yet “quite mature” when it comes to creating realistic images that could be incorporated into an online advertisement, but it is effective at creating “cartoon designs” that resonate with some smaller customers.

According to Jay Pattisall, an analyst at Forrester, there are several major hurdles preventing generative AI from having a major immediate impact on the online advertising industry.

One of them is brand safety. It’s uncomfortable for companies to outsource campaigns to generative AI, as it can generate images and wording that reflect certain biases or are otherwise objectionable and can be inaccurate.

Earlier this year, Bloomberg News found that when presented with prompts such as “fast food workers” or “social workers” were given “and associating lighter skin tones with well-paying jobs.

There are also potential legal issues when it comes to using generative AI based on models trained on data “scraped from the internet,” Pattisall said. Reddit, Twitter and Stack Overflow have announced that they will be charging AI companies for using the mountains of data on their platforms.

Scott McKelvey, a longtime marketing author and consultant, cited other limitations related to the quality of the results. Due to his limited experience with ChatGPT, the AI ​​chatbot developed by OpenAI, McKelvey said the technology lacks the ability to produce lengthy content that businesses might find useful as promotional copy.

“It can serve up fairly generic content using information that’s already there,” McKelvey said. “But there’s no single voice or point of view, and while some tools claim to be able to learn your brand’s voice from your prompts and input, I haven’t seen that happen.”

An OpenAI spokesman declined to comment.

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

“We are actively monitoring any emerging trends in AI-generated content,” the email reads. “If the content of the content, regardless of its creation mechanism, violates our Community Standards or Advertising Standards, we remove the content. We are in the process of reviewing our public policies to ensure this standard is clear.”

The Meta spokesperson added that as new chatbots and other automated tools come to market, “the industry must find ways to address new challenges for the responsible use of AI in manufacturing” and “Meta intends to be at the forefront of this work.” to stay.”

Stacy Reed, an online advertising and Facebook ads consultant, is currently incorporating generative AI into her daily work. She uses the software to create variations of Facebook ad headlines and short texts, and said it’s helpful in a world where it’s harder to track users online.

Reed described generative AI as a good “starting point,” but said companies and marketers still need to refine their own brand messaging strategy and not rely on generic content. Generative AI doesn’t “think” like a human strategist when creating content and often relies on a series of prompts to refine the text, she explained.

As such, companies shouldn’t simply rely on technology to see the big picture and know what topics resonate with different audiences or how to run large campaigns across multiple platforms.

“I deal with big brands that struggle because they’re so far removed from the average customer that they don’t speak their language,” Reed said.

Currently, major advertising agencies and large corporations are mostly using generative AI for pilot projects while waiting for the technology to develop, say industry experts.

Earlier this year, Mint Mobile aired an ad in which actor and co-owner Ryan Reynolds read a script he said was created using ChatGPT. He asked the show to write the ad in his voice and use a joke and a swear word and let the audience know the promotion was still ongoing.

After reading the text created by the AI, Reynolds said, “It’s slightly frightening, but compelling.”

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