AI: Expanding use of AI for Ad Services. RTZ #651

It’s important to keep in mind in this AI Tech Wave that beyond the AI applications and services for businesses and consumers, there is a parallel opportunity to develop and deploy AI capabilities for AI and other enterprise stakeholders. And while companies like Meta have been at the forefront of this trend, along with Google and others, it’s not just limited to in-house developed AI ad tools, applications and services.

This is laid out with pithy examples by the Information in a piece worth reading in full, “How Meta and Google Benefit From AI-Created Ads—Made With Other Firms’ Technology”:

“Five months ago, app studio Sociaaal, which creates apps that help people identify their celebrity look-alike or suggest pick-up lines to score a date, started using generative artificial intelligence to create ads for running on social media, including YouTube. The AI-created ads included some Sociaaal’s marketing team say they never would have thought of, like a video of an older woman encouraging people with Gen Z lingo to download Sociaaal’s dating app Rizz God.”

“More importantly, Sociaaal and its ad agency were able to cheaply ramp up the number of ads they create, to 400 a month from 40. Using AI tools from startups such as HeyGen and Poolday AI, Sociaaal created enough variations of images, texts and videos to appeal to every type of potential customer. The tactic worked—CEO Patrick Stuart-Constant credits the company’s 65% growth in revenue over a four-month period—mostly subscriptions to its apps—to the increased variety of ads it devised.”

And the trend is broad and deep:

“The experiences of Sociaaal and RocketShip show how generative AI technology can boost ad revenue for big tech companies, even when advertisers aren’t using the companies’ creative ad tools. Google has gone out of its way to tell its advertisers they’re happy with whatever generative AI ad tools they want to use—as long as they’re spending money on Google.”

“The company’s advertising division has even set up funds to reimburse advertisers for the costs of trying generative AI technology, even if Google doesn’t make the tools, said an ad firm executive and a person familiar with Google’s thinking.”

“A Google spokesperson said the company has several initiatives that support the ecosystem in applied AI innovation and integration with Google Ads specifically. The spokesperson said that Google believes in the value of generative AI improving ad performance.”

“Google’s gambit may pay off, given that seven brands and ad agencies said generative AI made their ads work better. If Google can convince more advertisers to adopt generative AI on their platform, and advertisers spend more on Google as a result, its revenue could continue to climb. But their competitors might benefit as well.”

“Google and Meta are likely to particularly benefit from advertisers’ generative AI strategies because their superior technology for personalized advertising makes it easier for the abundance of ads generative AI creates to reach the right person.”

Again, the whole piece is worth a read, but this is all but the tip of the tip of the iceberg in terms of AI being deployed for advertising. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)