Advertisers share what’s working in AI and what’s not as the hype fades

• The initial hype of generative AI in advertising is now tempered by growing skepticism.
• However, major agencies such as Publicis and WPP are planning significant investments in AI.
• Experts say AI has potential in ad personalization and storytelling, but there are challenges.

Two years after the launch of OpenAI’s ChatGPT and other chatbots, the advertising community’s enthusiasm for generative AI has run its course.

The shift was evident at New York Advertising Week, a four-day gathering this week where organizers expected 17,000 to attend. On panels and in offstage conversations, industry insiders seemed to talk as much about the limitations as the promises of AI.

“I think for the first time I’m starting to hear skepticism around AI,” said Ashwin Navin, CEO and co-founder of Samba TV, a TV measurement firm.

In an industry that likes to show it’s an early adopter of new technology, it’s been easy for practitioners to claim they’re using generative AI to do things that aren’t really new, like basic personalization and targeting ads, a he said. “What is the marketing sense of what is new for marketers to evaluate?”

Disciples of generative AI say it can take the pain out of some of the repetitive tasks involved in analyzing data, buying ads and matching ads to specific groups of people. Major advertising agency groups, including Publicis, Havas and WPP, have pledged to invest hundreds of millions of dollars in AI over the next few years. Last year, a Salesforce survey showed that about three-quarters of marketers were or planned to use generative AI.

But there has been a growing narrative in the industry that some of the new AI technologies are not a leap forward from what was already available.

“There is the potential for a generative AI solution to be just a solution in search of a problem,” said Andrew Lipsman, an independent media, advertising and commerce analyst. “An ad buying user interface is usually just a few fields of information to toggle through to set up your campaign. I’m not sure it’s something that needs to be addressed further.”

Zaid Al-Qassab, global CEO of advertising agency M&C Saatchi, said in a recent interview with Business Insider that AI can be a distraction for customers. “The real question is, what is your business challenge?”

Al-Qassab said he sees a lot of promise in the technology. After starting in the role in May, he made a set of AI tools used in one part of the company available to everyone. One of the features is pulled from a lot of data sources to gauge how people feel about a brand. He’s also optimistic about AI’s ability to generate ideas for ad campaigns, personalize ads beyond simply changing the recipient’s name, and save time writing client briefs.

But other things, such as AI project management tools, can’t replace the value of a face-to-face client meeting with an agency representative, he said.

“He can’t represent you,” he said.

Then there is the matter of creativity. Some advertisers such as Google and Toys “R” Us have been met with backlash when they use or refer to AI in their ads, often due to fears among the public that AI could replace jobs and destroy human creativity .

Overall, in conversations with seven industry insiders around Advertising Week, the areas most frequently cited as showing promise with AI were improved targeting and ad creativity, but their potential was far from being fully realized.

Some uses of AI show some promise but have limitations

From the start, it was easy to see how AI could cut costs by doing some memory work. But people in the field say that to transform advertising, they are expected to do more, such as improving the quality of ad messages and targeting.

“Let’s not just think about how to reduce costs; let’s use it to make a better story,” said Navin of Samba.

That’s starting to happen. Media companies like NBCUniversal use AI to analyze topics in video content so that advertisers can serve contextual ads around that content. NBCU said ads performed up to 49 percent better this way.

Another area where AI is starting to work is finding new leads. Adtech firm DoubleVerify brought a client, Diageo, on stage at Advertising Week to share its success using AI tool DoubleVerify to help sell spirits like Ketel One vodka while keeping costs low.

Speaking on another panel, Nick Fairbairn, VP of marketing at financial app Chime, said AI helped him find unexpected media outlets to target people for a new product launch.

That said, even when AI tools have had positive results, ad insiders have also often talked about their limitations.

Joshua Nafman, VP of data and operations at Diageo, said that while DoubleVerify’s AI tool helped drive sales, Diageo had to roll out the process one brand, ad campaign and market at a time.

“We started joking, it wasn’t test and learn, it was retest and relearn,” Nafman said.

Fairbairn said he sees an opportunity to use artificial intelligence to match ads to individuals, but added that it’s early days.

“I want to make sure it doesn’t just look like the same ad with a different word,” he said.

While enthusiasm for AI was tempered across the industry at this year’s Advertising Week, there was no widespread abandonment of the technology. The AI-focused panels were as well attended as ever.

Some also see opportunities in friction.

Adtech company LiveRamp has announced a pair of AI partnerships to help marketers find the right AI company for a given problem.

LiveRamp CEO Scott Howe said that while AI is a hot topic in the industry, many marketers aren’t sure how to use it.

“In some ways, they’re more scared of it because they think there’s a downside, because they don’t understand what the upside is,” Howe said. “We feel there is a void in the industry that we can help fill.”