What if AI were able to serve you an ad in your sleep? I know; it’s far-fetched. But, now that I have your attention: AI is rapidly transforming the advertising and marketing industries, and the potential impact is vast.
AI is transforming advertising through its ability to digest and analyze an enormous amount of data quicker than a human ever could to predictions about consumer behavior and preferences. This data can create hyper-personalized ads tailored to individual consumers, making advertising more effective.
For example, in 2018, Nike launched an AI-powered ad campaign called “Find Your Fast” to promote their Zoom Fly SP running shoes. The campaign used data from runners’ activity on the Nike+ Run Club app to create personalized videos featuring each runner’s performance data, including their average pace, distance, and personal best times. In addition, the videos were dynamically generated in real-time and featured the runner’s name, photo, and a personalized message from Nike’s running coaches.
The campaign was a success, generating over 18 million views and a 6% increase in sales for the Zoom Fly SP shoes. The personalized ads were praised for their ability to connect with runners on an emotional level, motivating them to push themselves to improve their performance. In addition, the campaign demonstrated the power of AI to create hyper-personalized ads that resonate with consumers and drive sales.
But the use of AI in advertising also poses significant risks. One of the most concerning is the potential for AI-generated content to undermine consumer trust in the authenticity of advertising. With the ability to create synthetic images and videos, it’s becoming increasingly difficult for consumers to distinguish between what’s real and what’s not.
In 2020, Samsung AI researchers created a model called “Few-Shot Adversarial Learning of Realistic Neural Talking Head Models” that could create real videos of people saying things they never actually said. The researchers used a technique called “neural talking heads” to create videos that appeared to show real people speaking, but in fact, the videos were entirely generated by AI.
While Samsung emphasized that the technology could have positive applications, such as creating more realistic avatars in video games, it also acknowledged the potential for the technology to be used for malicious purposes, such as creating fake news or defaming individuals by creating counterfeit videos of them saying or doing things they never actually did. This example highlights the risks associated with AI-generated content and its potential to erode consumer trust in the authenticity of advertising.
This erosion of trust has significant implications for brands, particularly in the age of social media, where word-of-mouth can spread like wildfire. A damaged brand reputation can be challenging to recover from, which makes it all the more important for advertisers and marketers to prioritize transparency and authenticity in their campaigns.
AI has also been proven to exacerbate existing inequalities in the advertising industry. By relying on algorithms to analyze consumer data and predict behavior, there’s an inherent risk that underrepresented groups may be overlooked or marginalized in advertising campaigns.
In 2019, Facebook settled a lawsuit alleging that the company’s ad platform enabled discrimination against certain groups of people, including women, older adults, and people of color.
While AI can revolutionize the advertising and marketing industries, it’s essential to acknowledge the potential dangers that come with the growing power of algorithms and the abundance of consumer data.
Of course, using consumer data to create targeted advertising campaigns is a concept that has been introduced previously. Still, the rise of AI technology has enabled advertisers to analyze much larger volumes of data than ever before. This has the potential to give advertisers an unprecedented level of insight into consumer behavior and preferences.
AI-powered marketing personalization can deliver five to eight times the ROI on marketing spend and can lift sales by 10% or more,” according to McKinsey & Company.
However, using algorithms to analyze consumer data also poses significant risks. For example, algorithms perpetuate the existing biases and inequalities in society. Moreover, if algorithms are trained on data that reflect these biases, they may inadvertently reinforce them in advertising campaigns and ad targeting.
A study by the University of Oxford found that AI algorithms can perpetuate gender and racial biases, with algorithms trained on existing data sets reflecting these biases in their output.
Additionally, the sheer volume of collected data raises concerns about privacy and security. With so much personal information being collected and analyzed, there’s a risk that it could be misused or stolen, leading to significant harm to individuals and society.
A survey by the CMO Council found that 54% of consumers are concerned about the potential misuse of their data, while 36% are concerned about the amount of data being collected.
As AI technology continues to evolve, it’s crucial for advertisers and marketers to be aware of these risks and to take steps to mitigate them. By prioritizing transparency and authenticity and actively working to combat bias in their algorithms, advertisers can ensure their AI use is responsible and ethical.
The power of AI in advertising is undeniable. But to fully realize its potential, the industry must be mindful of the potential dangers and take steps to address them. By doing so, advertisers and marketers can build trust with consumers and ensure that AI is used to deliver real value to both brands and consumers.
Josh Weaver is a multidisciplinary marketing and media leader.