Coca-Cola, which has been one of the most aggressive brands to adopt AI in its marketing plan, noted its interest in the technology during its quarterly report this week. “We’re implementing generative AI to improve access to insight, market data, research and trends,” Coca-Cola CEO James Quincey said during a call with analysts this week.
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Here is a look at the trends affecting tech and advertising, from earnings this week.
One of Meta’s bright spots was Advantage+, an AI-based ad product that automates campaigns. The product is similar to Google’s Performance Max campaigns; they both take control from marketers and give it to AI to decide where best to place ads.
“Advertisers are more than willing to take non-transparency,” Wieser said, referring to their acceptance of AI managing campaigns with less visibility into how that process works. “They say they don’t like it but what we see advertisers doing is something different.”
Meta’s Advantage+ ad platform is on a $10 billion annual revenue run rate, Susan Li, Meta’s chief financial officer said, during the company’s earnings call on Wednesday.
Also, Meta saw a boost out of China, likely from fast-fashion sites such as Temu, according to Wieser. “Within ad revenue, the online commerce vertical was the largest contributor to year-over-year growth, followed by CPG and gaming,” Li said. “Online commerce and gaming benefited from strong spend among advertisers in China reaching customers in other markets.”
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Lastly, Zuckerberg gave an update on Threads, the X rival launched through Instagram last quarter. The app now has “just under” 100 million active monthly users, Zuckerberg said.
YouTube is back on the upswing, pulling in $8 billion in ad revenue in the third quarter, up 12.5% from a year earlier. The video property had been a little stagnant, with shrinking ad revenue from the end of 2022 through the first quarter of 2023, before showing a gain in the second quarter and a sharper uptick in the recent third quarter. Also, Shorts, the TikTok-style vertical videos, are now at 70 billion views a day, up from 50 billion in the second quarter.
Overall, Google’s ad revenue rose 9.5% year over year, to $59.6 billion. The company is making the shift to generative AI ad products like Meta, Amazon and Microsoft are doing, and it has more machine learning powering campaigns such as Performance Max, which takes brands’ assets and runs them across search, YouTube, Gmail and Maps.
Philipp Schindler, Google’s chief business officer, highlighted Demand Gen ads, which also incorporate generative AI into ad creation and rolled out widely this month. “It combines video and image ads in one campaign, with access to 3 billion users across YouTube and Google,” Schindler said, “and the ability to optimize and measure across the funnel using Google AI. Demand Gen is already driving success for brands like Samsung and Toyota.”
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Advertisers are seeing lower CPMs, cost per thousand impressions on Meta and Google, compared to last year, said Calla Murphy, VP of digital strategy and integrated marketing at Belardi Wong, the performance marketing agency, which she attributed to the better AI.
Meta discussed the decrease in ad prices in its earnings release: “In the third quarter of 2023, ad impressions delivered across our Family of Apps increased by 31% year-over-year and the average price per ad decreased by 6% year-over-year,” the company said.
“Google and Meta are still the core digital platforms, that’s where the bulk of spending is going,” said Murphy.
Belardi Wong runs marketing campaigns for 300-plus brands and has been helping those clients transition to AI ad campaigns on Google and Meta. TikTok, too, is growing as a significant channel, Murphy said. TikTok, owned by Chinese-based ByteDance, does not publicly report ad revenue.
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