Greetings as ever from London, UK.
I hope your summer is going well. It seems strange to me that whilst much of Europe burns with raging temperatures and forest fires, mainly as a result of climate change, the UK has seen one of its wettest summers on record so far. I am hoping for something between the two extremes in the coming weeks.
In this latest INMA Advertising Initiative newsletter, I want to return to the current hot topic of AI. Specifically, I want to cover two recent matters which affect media advertising.
Firstly, I want to highlight a report you probably won’t have seen from the UK. It’s from an organisation called Chief Disruptor, and I have a summary/opinion on its findings in the recent survey/report on why businesses would want to invest in AI. I give my take on it all. The implications will be of interest to anyone in media advertising.
And secondly, spotted on late night UK TV — the global ad industry guru Sir Martin Sorrell gave his opinions on AI in advertising and judged the risks versus rewards for us all. I can probably guarantee most people reading this won’t have seen the interview, a must-read summary for anyone in the ad space is at the end of this newsletter.
What is deemed the No.1 reason for investing in AI?
This was the bottom line of a new report into the impact of AI on business. The results, I feel, had parallels for media executives in the advertising arena, and I have shared my take on what was found in relation to this Initiative.
The UK organisation Chief Disruptor recently unveiled a major report on AI in business. The company believes disruption is a catalyst for business transformation. Part of their mission to help businesses make sense of disruptive trends and technologies, and here, they wanted to know more about what the main business objectives were for investing in AI.
Respondents to their report survey (from various industries) were asked to select one of the following four alternatives as the main reason to invest in AI.
- Enable business transformation.
- Transform customer experience.
- Optimise business performance/insight.
- Innovation: new products and services.
The highest response was No. 3 (optimise business performance/insight) at 42% as the top reason for investing in AI. This was followed by No. 4 (innovation: new products and services) at half the response as the main reason (22%).
AI is unquestionably a game changer when enabling business insights. Organisations that use AI-powered analytics programmes are able to better identify trends and patterns from complex data from many sources. AI also enables businesses to develop forecasts, predict outcomes, and analyse possible scenarios to determine which have the most opportunity to succeed.
This is exactly what we as media companies should be doing with our first-party data — extracting it, manipulating it, and exploiting it with valued insights for our advertisers. A true USP we can offer them.
Additionally, providing the ability to better understand how our advertisers feel about our products/services (as well as being able to deliver those insights) helps us drive the development of new products/services. And AI-enabled automation frees salespeople from the more mundane tasks, leaving them free to concentrate on innovation and disruption.
Chief Disruptor also wanted to deeper dive into the specifics of what it is businesses were hoping to achieve from AI, so they also asked respondents to select their top five business objectives when implementing AI in their organisations.
The highest response was to “optimise productivity and efficiencies” at 70% (see chart below). “Improving customer experience” was the next most popular 63%.
Many advertisers are turning to an AI-enabled customer service to facilitate meaningful engagement. AI chatbots, automation, and predictive analytics are just some of the tools likely to give businesses a competitive advantage as they strive to offer more personalised and connected omni-channel experiences to their ad customers.
AI also improves customer service responsiveness, and the recent explosion of conversation AI will enable brands to add a more human dimension to their chatbots.
But while digital tools can drive seamless and frictionless customer experiences, questions remain about whether consumers actually miss human interaction and whether these developments can effectively humanise digital customer experiences. Some media companies have highlighted this fact to me as post-pandemic advertisers liked the humans touch again from our media sales teams.
As mentioned above, by automating mundane and time consuming tasks, businesses are able to free up their employees’ time, allowing them to focus on more productive or creative aspects of their advertising jobs.
Interestingly, “generating content” was a business objective for AI by 22% of respondents, reflecting the recent widespread interest in utilising generative AI to create content. Most of the respondents said they are at the stage of exploring use cases and building a business case for AI.
Given the transformative potential of AI and the media frenzy around new generative AI models, it’s not surprising the highest percentage of respondents (41%) stated they are “exploring use cases and building a business case for AI” (see chart above).
The potential use cases for AI are incredibly wide and include practically every business sector and job function, especially in advertising — encompassing everything from creative writing to data exploitation and much more.
The number of case studies is growing every day as the technology quickly evolves and new innovations come to market. What we need to do as media advertising people is stay on top of our game and be seen to be a trusted, knowledgeable source of knowledge. Our advertisers want our experience and know-how.
- 2023 Maximising Business Impact from AI (source: Chief Disruptor). Free report (upon registration form completion).
Judging the risks and rewards of AI in advertising
“The human creative side will become increasingly important” — advertising guru Sir Martin Sorrell on AI’s impact on advertising.
Late at night recently, I came home from a lovely but very tiring advertising industry dinner here in London. Before climbing into bed, I felt I needed to “climb down” and chill out for short while, taking stock of the evening that just was. To do so, I tuned into the BBC TV News channel as a background to my ponderings.
To my surprise, in those early hours I stumbled across the BBC’s business presenter Aaron Hazlehurst, who was about to interview a personal hero of mine, Sir Martin Sorrell, CEO at S4Capital but perhaps most famous for creating the world’s largest advertising and PR group, WPP plc. Sorrel is a true advertising industry global legend whom I had the pleasure of interviewing myself for a previous INMA Webinar.
On this late-night discovery, the subject matter was, of all things, AI — the risks and rewards for advertising in the future. I was immediately hooked and quite surprised at the timing of the show, when I am sure many people would not be tuned in. Yes, I know the world has many time zones but still, it seemed to have appeared without any prior promotion and buried somewhat in the night’s programming.
So, I recorded the interview and have made a transcript of it for subscribers of this INMA newsletter, as I thought you’d be more than interested.
Here it is:
Aaron Hazlehurst: Today is all about balancing the positives and the negatives. What are the pros and cons of AI in your world, advertising?
Sir Martin Sorrell: I think there are five big positives:
- The first is we will see an improvement in productivity in creatives, copywriting, and visualisation. Basically, we will be able to produce ads far faster. Two weeks down to two days.
- We will be able to personalise more effectively. We are doing this to some extent already. But in the future, instead of producing one-and-a-half million assets for a campaign, eventually we will be able to produce multi-million assets for a campaign.
- Media planning and buying will be revolutionised. You will no longer need 10,000 people around the world in the media planning and buying network. You can do it algorithmically, and people will have very sophisticated data to make their planning and buying decisions on.
- We can use AI to “better” our daily processes and be more productive.
- And finally, and what I think is the most important, we will be able to democratise information inside companies. Companies will become more flat and more effective, more efficient because knowledge will be disseminated around the company with accessing information easier.
On the negative side, there are legal issues around IP, copywriting, and infringement. That issue is being worked out in the likes of the music industry and others. There will always be the “bad actors” using this technology in evil ways. That is something self-regulation can put pressure on, as the regulator won’t be able to keep up.
Finally, then there is the issue around jobs. Will there be a net increase or a diminishing of jobs? My own view is that it will probably be negative in terms of net jobs.
Hazlehurst: So, AI can be used to deliver complete advertising campaigns, but will consumers be able to see the difference between one crafted by agencies and one put together by an algorithm?
Sorrell: If I showed you an ad generated by AI a year ago, you would see the joins. You would see, to some extent, that it was manufactured. If I showed you the same process today, you might not be able to. Going forward, I think you definitely won’t be able to see it.
Hazlehurst: Does that mean that advertising companies need to be clear with their clients when they use AI in their work?
Sorrell: We (S4Capital) have already taken a position. For example, we won’t alter pictures. If we, say, used a white actor, we wouldn’t convert that person into a black actor or vice versa. So, we have already put into place ethical protocols which we think are important. This comes back to the self-regulation point. It is hopeless for the regulator, in my view, to believe that he or she can keep up with this thing.
What the government regulars have to do is put pressure on the tech companies to behave in a totally responsible way. Having said that, there will always be those “bad actors.” Do I think that in next year’s presidential election, some nefarious people will be using AI to generate fake images or fake ads or fake interventions? Yes, I think that will happen.
Hazlehurst: So, are you saying you don’t believe that the world will be able to get together and globally regulate this technology?
Sorrell: We have already seen the U.S. regulator trying to unravel a deal that Google did with DoubleClick 10 years ago, so the regulator tends to be always reactive. They lack resources. If the government was prepared to pile infinite resources into this, in terms of people, knowledge, and data, then maybe they might be [proactive[. But what the government needs to do is work with the [ad] industry.
Hazlehurst: So, who will be the winners and the losers in this AI battle?
Sorrell: Agility will be key. And from the platforms point of view, Alphabet, Meta, Amazon, Alibaba, TikTok, Apple, Microsoft, Salesforce, Adobe, Oracle, and those that make the chips for all the computing power [will win].
And I think only these larger companies will be able to do it at the required scale and cost. Inevitably, as they are forced to grow organically because of regulation, I think you will see them expand further into it. These companies will be the really interesting ones to watch.
Hazlehurst: Let me finish on this: In five years’ time, what’s the impact of AI on advertising and marketing?
Sorrell: I wish I knew. It’s very difficult to say [what will happen] in the next five minutes or five days. But having said that, it’s going to be much more efficient and a much more effective model.
It will be algorithmically driven, but the human creative side will become increasingly important but at a different level. It will be about those decisions, views, and judgments that will be made with more effective data than we’ve ever had before.
And it will be a more interesting environment because of more data available, companies will be leaner, more efficient, flatter, and [an environment] where people across the company are much more involved in decision-making with better access to information.
If information is power, this is going to democratise knowledge inside companies and going to make people more productive.
Hazlehurst: Martin Sorrell, thank you.
So, there we have it. The man has spoken. Very much in line with what we are thinking in media circles, I would say.
Expect AI to stimulate the way advertising is “made” and for it to be faster and allow for (human) creativity to blossom. More data will open up a more personalised end user experience and a more collaborative approach across disciplines internally and externally with clients.
But, we need to beware of the dangers of things like fake ads, bad sources of information, etc., which if left unwatched and unregulated, can lead to bad reputational damage for both ourselves and our advertising clients.
I hope this all can lead to the start of some most interesting and fruitful conversations between you, your sales teams, and advertising clients alike.
- My interview with Sir Martin Sorrell exclusively for INMA.
- Three actionable insights with Sir Martin Sorrell.
About this newsletter
Today’s newsletter is written by Mark Challinor, based in London and lead for the INMA Advertising Initiative. Mark will share research, case studies, and thought leadership on the topic of global news media advertising. Sign up for the newsletter here.
This newsletter is a public face of the Advertising Initiative by INMA, outlined here.