The integration of generative artificial intelligence (AI) and marketing science is revolutionizing the advertising industry. Despite some lingering hesitations, an increasing number of brands are beginning to recognize the immense potential of AI in both creative and operational aspects. Renowned brands like Coca-Cola have taken the lead in incorporating AI into their advertising campaigns.
Coca-Cola has utilized AI to remake its iconic advertisement "The Holidays are Coming," showcasing the technological advancements achieved in a short period. The PetSmart Charities organization has also leveraged AI to create vibrant profiles for animals available for adoption. Coca-Cola has started using AI for image generation, translation, and other tasks that were previously outsourced. Advertising agencies are also making significant investments in AI technology.
Omnicom Group has revealed plans to invest hundreds of millions of dollars in this technology. A survey by Forrester found that many advertising executives are actively using generative AI and recognize its ability to improve advertising strategies and effectively tailor messages. Jonathan Wolf, Chief Revenue Officer of AI analytics provider Persado, elaborated on the practical applications of the technology.
AI can predict interaction conversion rates for different customer segments and determine the optimal timing for sending messages based on user behavior.
This optimization of message timing led to a ninefold increase in click-through rates for a financial service provider. Wolf noted, "AI on mobile can choose the best moments for interaction." Although the application of AI in marketing and advertising is becoming increasingly widespread, concerns still persist. Research by the World Federation of Advertisers indicates that 80% of multinational companies feel uneasy about how their agencies are using generative AI.
Legal, ethical, and reputational risks are considered the primary concerns. JJ Schmid, Chief Growth Officer of Dentsu, acknowledged that AI technology has become crucial for clients of large agencies. However, he pointed out that brands have yet to request AI to create advertising campaigns, calling it "a step too far for everyone." This highlights clients' emphasis on the human element in storytelling.
As AI technology continues to evolve, it presents significant opportunities to enhance the creative and operational aspects of advertising. It is becoming an essential tool for brands to address real problems at significantly reduced costs. The key is for marketers to focus on leveraging AI for complex, strategic development rather than merely simple tasks, thereby gaining a substantial competitive advantage. The application of AI should not be limited to efficiency improvements; it should also unlock its potential at a strategic level to deliver greater value to brands.
