AI in Advertising: To Be Used With Caution

The use of artificial intelligence (AI)-powered chatbots — computer programs designed to simulate conversation with human users over the internet — is already affecting the local advertising industry.

Increasingly, agencies are using the technology to target customers with personalised advertisements and offers based on their individual needs. This will inevitably help reduce the cost of customer acquisition and increase the effectiveness of marketing campaigns.

In addition, AI-powered chatbots are being used to monitor customer engagement and provide real-time feedback about how they are responding to ads.

Global Advertising & Partnerships’ Chris Wilson writes in his online newsletter that AI is also being used in the creation of ad content, with tools such as natural language processing and computer vision enabling marketers to generate personalised copy and images that are tailored to specific audiences. This, he says, can help increase engagement and drive conversions by making ads more relevant and engaging to users.

Nicholas Bednall, chief commercial officer at Moya, South Africa’s first mobile data-free chat application, tells the FM the most common example of AI in advertising right now is the use of bots for sales or support on chat platforms. “It’s a highly effective low-cost solution for one-on-one conversations via chat, but it is also capable of being applied to millions of people.”

Warren Moss, founder and CEO of the specialist B2B marketing agency Demographica, says: “We’re now testing AI’s ability to brainstorm ideas for creative teams. By asking ChatGPT to generate thought starters about a topic, we’re able to save time and enhance the creative process.

“Additionally, we’re exploring AI-generated art, using tools that create brand new images by giving the AI specific instructions. During one pitch, I asked the AI to generate an image of a clown eating a hamburger in a Game of Thrones backdrop with crowds resembling football supporters at a music festival. The AI was able to provide a concept within two minutes which may have taken a senior graphic designer weeks to create.

“In another instance, we were preparing for a client pitch, and I needed an award-winning advertisement as a reference. I asked ChatGPT to provide an example of a funny, global ad that highlights a product frustration and its solution.

“Within 15 seconds, the AI recommended Apple’s ‘Virus’ ad, which personifies a Mac versus a PC. By using this ad in our pitch, I estimate I saved our creative team — which costs a combined rate of R1,200 an hour — about six hours, or R7,200. If you consider how much research typically goes into target markets, competitor analysis, business cases and other creative and strategic planning tasks, the time saved by using AI can cut costs by millions of rand.”

However, Wilson warns that despite the many potential benefits of AI in advertising, there are also several challenges that must be considered.

One is the potential for bias in AI algorithms. Because AI relies on historical data to make predictions about the future, it can sometimes reinforce existing biases and stereotypes. This can result in ads that are discriminatory or offensive to certain groups of users, potentially damaging brand reputation and customer trust.

Another challenge, Wilson says, is the potential for AI to be used in unethical or manipulative ways. For example, AI could be used to create hyper-personalised ads that target users’ fears or insecurities, or to manipulate user behaviour in other ways that are not in the users’ best interests.

Brett St Clair, co-founder of data engineering company, tells the FM that brands using AI will have the capabilities to produce deeper consumer understanding, embrace richer communication, drive more content and data, and respond in real time to squeeze out more yield.

Advertising agencies, he says, will have more time to be creative, increase data to understand the different sub-niches of buyers better and have a greater ability to broaden the brainstorming of ideas. In turn the consumer will receive ads for products that are relevant and offer solutions to actual needs.

Kerushan Govender, founder of the Blacfox agency, says ChatGPT can guide a novice through a full ad set-up, addressing nuances that were once the domain of experienced professionals. AI, he says, is great at assembling superficial datapoints. But we need humans for a level of assimilation that goes further. We need humans for that extra layer of real-world perspective.

This piece originally appeared in the Financial Mail.