How tech innovations like AI and AR/VR will change advertising in 2023

Will 2023 be the year the robots came for creatives? January already has seen a few notable examples of advertisers delegating creative tasks to artificial intelligence, most notably the “eerily” good ad copy ChatGPT churned out for Mint Mobile, the telecom challenger brand part-owned by Ryan Reynolds. The actor took to Twitter to share his excitement and horror over the ad’s quality, complete with not one, but two, clever jokes. While the Mint spot nods to our collective anxiety around the growing sophistication of AI, Bacardi-owned vermouth brand Martini put its faith in AI to create visual assets for a recent campaign created by AMV BBDO using the AI tool Midjourney. While this kind of work may trigger a collective shudder on the part of copywriters and designers—along with a healthy dose of skepticism from the community at large—ads like these won’t be the last, and make us all wonder how far innovation will push us this year. Read: What Generative AI Means for Brands—A Marketing Guide to ChatGPT, DALL-E and Other Artificial Intelligence We turned to leaders from the Amp community to get their expert take. The year the robots got creative While Ryan Reynolds may find the effectiveness of tools like ChatGPT chilling, some agency owners are exhilarated by the kind of efficiencies automation could make space for. “We see these new tools and their capabilities as an opportunity to work smarter,” said Amanda Zarle, head of strategy at Boston-based HeyLet’sGo. Zarle points to programs like Adcreative.ai, Jasper.ai and Vall-E as leading examples, allowing agencies to empower one person to do the work of many. Still, Zarle recognizes the critical human element indispensable to the process. “As the industry continues to explore the potential of AI-driven tools to make content creation easier and faster, we remain mindful of consumers' desire for meaningful brand experiences,” she said. “Consumers want brands to reflect their values and create meaningful connections, rather than simply producing more content. Our most effective work continues to be driven by the creativity of our talented individuals, with vivid imaginations who are able to tell captivating stories about brands.” While great ads rely on that human element in order to succeed with audiences, the capabilities AI has today is still enough to keep creatives up at night. “In as much as the AI boom is a testament to human ingenuity, it’s also an existential test of our ability to square technological achievements with human creativity and critical thinking, enough to give us AI anxiety,” said Eli Williams, director of creative strategy at Day One Agency. There, the topic of AI was explored in depth as part of the agency’s 2023 Predictionary, its trend report and forecast set to be published on its website next week. “As the AI field matures and consumers warm to existing platforms like ChatGPT and DALL-E, more brands will likely explore activations and campaigns using generative AI,” Williams noted. “The ones that break through will place authentic and original storytelling at the center.” As programs like these pick up even more speed, AI is set to disrupt creative fields across the board this year, with more and more innovation taking shape every day within a tech community committed to advancing its capability. “The types of content we can expect to come from this technology include music, text and 3D,” said Geert Eichhorn, innovation director at Media.Monks. “As for the less obvious opportunities, I believe things like architecture, circuit boards and biological applications will also be within the realm of possibilities. Ultimately, generative AI is going to reduce a lot of production costs in design, creative, illustration and pre-production processes. And what brand or digital marketing services partner wouldn't want that?” Technology in a time of permacrisis That cost-saving element is critical as businesses grow increasingly concerned about the bottom line amid a period of continued economic uncertainty. Coupled with an ever-changing marketing landscape, with more and more platforms for brands to show up on, those efficiencies become even more critical. “Given increased computational power, larger data sets, better algorithms, transfer-learning and pre-trained models, the incorporation of these technologies is now not only viable, but necessary,” said Matt Fitz-Henry, head of technology at Amp Agency. “Whether it's advertising, content development, product or service recommendations, data analysis and analytics insights, or even process automation, we are seeing technology augmentation becoming necessary in order to address the issues of required scale.” Fitz-Henry also noted that, with exponential growth in the number of channels for content consumption, a successful marketing strategy is predicated on being able to provide hyper relevance in order to break through. He also anticipates increased incorporation of AI and machine learning in business operations, changing the way brands collect data, deliver personalized experiences and communicate with customers who continue to demand more from said brand experiences. Those customers will likely grow increasingly comfortable with interacting and communicating with AI as its ubiquity grows, and as it becomes less recognizable. “With Bing’s inclusion of ChatGPT imminent, people will become very accustomed to asking AI simple Google-style Q&A questions, but it will take the general public some time to realize the true power of AI in their own day-to-day web searches,” said Peter Cook, director of interactive strategy at Cornett. “What will be most interesting to marketers are all the ways that AI can speed up the creative process, thus lowering costs while maintaining the same volume of output,” Cook noted. “The tools are there today to create quick website mock-ups, storyboards or first drafts of copy with AI quickly, and then let the humans iterate and refine the creative messaging. Like all times of economic uncertainty, those companies who invest and innovate will come out of a recession with fewer competitors and with distinct advantages over their competitors who are left standing.” What is the potential for businesses to extend far past creative fields? This year, it won’t just be about letting AI decide what to say to customers, but finding those customers in the first place. “The real prize might be between the AI-generated lines,” said Alex Reale, marketing strategist and copywriter at [L]earned Media. “These tools won’t just write you a nice paragraph, but also will find you your ideal audience. In 2023, you’ll be able to pose complex targeting questions to your AI tool of choice and get distilled, data-backed, actionable answers.” Reale noted that instead of poring over reams of data manually to find patterns and shapes in consumer behaviors, she suggested a marketer might ask, “What international market is the best next target for my campaign, and why?” “With these tools, marketers will be able to transform squishy data into a succinct strategy. Watch for an increasingly fine-grained approach toward target audience reach,” Reale said. Innovating in the name of efficiency For businesses, that could mean better bottom line impact and clear, charted paths to reach targets. For agencies, that could mean greater trust from clients and better track records for results. “We can strive to provide meaningful and targeted experiences to consumers, but often it feels like we are shooting our arrow into the sun,” said Ian Cahill, director of innovation and data at VMLY&R. “This is rapidly changing with the advent of stronger analytical insights and artificial intelligence, which is serving to guide our teams toward not just the shiny objects but toward those objects that provide the most bang for our buck by way of KPIs and ROIs.” Cahill went on to note that forecasting demographics and retention in spaces like gaming and metaverse initiatives through AI data is almost paramount to where projects are moving forward and going viral. “At the end of the day, the data we can derive from advanced forecasting can reduce risk and provide more confidence in our spend and communication tactics,” Cahill said. So, how many marketers are actually employing this kind of technology to carry out their work? While AI-powered ads may not be the standard across our screens today, a wide swath of the ad community is already incorporating emerging tech as part of their strategies. “While the data suggests that we are still a handful of years away from mass consumer adoption, early adopting marketers are well on their way,” said Timothy Sauer, director of research and account strategy at Leap Agency, which has put out a survey to 322 senior level marketers late last year with surprising results. “Perhaps the biggest insight was the idea that these emerging technologies have already emerged,” he said. “The majority of surveyed marketers [54%] have already invested in AR, VR, NFTs or crypto as part of their marketing activity. And 25% of all surveyed marketers own a VR headset, 31% of early adopters have created an external facing VR product and 25% of early adopters have created an external-facing AR product.” Sauer forecasts that the headline at the end of 2023 won’t be about the introduction of new immersive technologies, but about the story of the continued work of the thought leaders in the space, with the rest of the industry playing catch-up. The ROI of AI (and other tech) For many agencies, despite operating during trying economic times, the cost of not investing in new technology is greater than the price of adoption. “With many recruitment budgets slashed, IT budgets don’t always go the same way because the cost of delaying technology implementations can be greater than the cost of investment,” said Julia Linehan, CEO and founder of The Digital Voice. “AI, for instance, has come on in leaps and bounds and can reduce manual process and budget waste. Meanwhile, disruptive programmatic ad buying is helping to open the doors to premium advertising for all advertisers, democratizing access to high-quality qualified traffic at wholesale prices for merchants without the deep pockets of household names.” Linehan also pointed to the growth of CTV in 2023, with Netflix adopting programmatic advertising in recent months, allowing brands to track users from their sofas. “Ultimately, embracing and growing from necessary change requires flexibility and a willingness to let go of old ways of operating,” Linehan said. “And it’s important always to marry technology capabilities closely with business goals and strategies, rather than rushing to technology for technology’s sake.” But when that technology means cost savings and revenue growth—especially against the backdrop of a looming recession—the rush may be worthwhile, noted Adam Helfgott, founder and CEO of Madhive, the streaming TV infrastructure powering efforts for broadcasters such as Fox, Scripps and TEGNA. “In times of economic uncertainty, the ad market starts to get squeezed and the focus is on efficiency,” he said. “To optimize spend on TV, we’re helping advertisers take a business outcome-based approach, similar to social platforms like Facebook and Instagram,” he noted. “This means mapping every dollar to a KPI, such as reach, awareness, website visits, app downloads and even sell-through.” Helfgott also noted that unlike social, TV is often experienced on a shared device within a household, so you have to identify "who is on the couch.” That’s why panel data is having a moment because when you overlay it with automated content recognition (ACR), you can start to understand who is watching within the household, he said. “Bridging the gap between panel and ACR data is going to be integral in the year ahead, as the entire TV industry tries to solve this ‘co-viewing’ problem and move beyond being just an awareness channel,” Helfgott said. Creator content: Let's get small As brands find themselves needing to get increasingly creative with budgets, stretching spend as much as possible, the importance of creator-driven creative has likewise grown. “Right now, we see our clients leaning into creator marketing to help fuel efforts across paid, owned and earned,” said Tim Sovay, chief business development and partnerships officer at CreatorIQ, the influencer marketing platform powering efforts for advertisers like Unilever and AB InBev. “One of the big reasons for this is that creator content consistently outperforms traditional brand creative. Not to mention, it's also more efficient to produce at scale.” Sovay observed that once creator content is developed, real-time data analysis can enable an always-on approach to monitoring campaign impact, which gives teams insight into performance every step of the way. “And forward-thinking technology like machine learning is optimizing campaign amplification by allocating ad spend behind creator-driven creative against business outcomes in real time,” he said. Others point to the importance of micro-influencer content within this context of budget tightening, offering more accessible ways for brands to reach customers. "With brands looking to do more with lower budgets, I see the rise of micro-influencer marketing emerging as a prominent tactic,” said Steven Blutstein, head of marketing at The Social Standard. “Brands will work less with celebrities and influencers with large followings and more with authentic customers, employees and fans for future content needs.” Blutstein said that brands need a great deal of vertical video and will have fewer marketing dollars to get there. While no one has a crystal ball, the future looks exciting to agency leaders like Brian Yamada, VMLY&R’s chief innovation officer, who sees the following three trends taking shape in the year ahead: • Embedded AI. Yamada noted that walking the floors at CES 2023 recently, AI was everywhere, powering the experiences and seamless services. AI is embedded into the devices paired with evolving hardware and sensors to enable incredible new experiences. Detecting breathing abnormalities using connected stethoscopes, identifying intruders via AI analysis of Wi-Fi waves, driving autonomous baby strollers and much more. GANs and ChatGPT are accelerating AI into how we creatively concept and create. There will be an explosion of use cases across our industry. • Spatial matters. Yamada observed that we're moving from a 2D to a 3D world as we move into XR/AR/VR experiences that can be spatially aware and accurate. That’s been happening in select categories like furniture, to see exactly how a piece fits in your space. That will extend into more functional categories, so you won’t have to guess how the clothes or shoes fit. And it will extend into more creative spaces this year. There will be emerging tools like Google’s Geospatial API to drop experiences at a specific location and react to the space around it. The key question is, where does space and dimension matter to your customers? • Metaverse shifts to utility, value. All the technologies powering the metaverse are getting better, faster, smaller, so it’s not going away—but will adapt. Following the cryptocrash, we’ll see an era of utility and access where brands focus on building community and value. And we’ll move away from the speculative era where brands rush in to explore and consumers came to get rich quick. The future is fast approaching Ultimately, the innovation that lies ahead in the coming year may look different from what we’re used to seeing. With a baseline now firmly established for the proliferation of artificial intelligence, we can likely expect progress to happen at an accelerated rate. “Traditionally we are used to thinking and operating on a linear scale, a continuous progress in everything we do,” said Diederik Veelo, founder of Ambassadors and Lab & Cube. “But today it becomes more and more clear that what looked like linear progress was in fact just the lower end of an exponential curve. The effort it took us to go from A to B last year, will only take us six months this year.” Veelo went on to ask where this leaves us in the advertising space. Veelo expects the first fully automated ads, unlocking scale and speed of iteration, allowing us to pull video scenes out of thin air with just a few prompts. “Once that happens, the ad-serving platforms will get disrupted by ad-generating platforms,” Veelo said. “By that time general AI will have passed the Turing test and we will have accepted it as a natural part of our society.” About Amp Amp is a platform that’s integrated with Ad Age and Ad Age Creativity, allowing you to leverage our editorial credibility while showcasing your expertise, accolades and campaigns. For more information visit our FAQ page. Not an Ad Age Amp member? Find your page and claim it today.

How tech innovations like AI and AR/VR will change advertising in 2023

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