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By 2032, AI-enabled advertising could account for $1.3 trillion in ad revenue

Advances in AI could result in marketers increasingly tying together products, consumer and advertising experiences, says the business intelligence director at GroupM

Published: Jun 14, 2022 12:02:16 PM IST
Updated: Jun 14, 2022 03:22:53 PM IST

By 2032, AI-enabled advertising could account for <img.3 trillion in ad revenueKate Scott-Dawkins, global director-business intelligence, GroupM 

Advances in AI and these evolving media channels could result in marketers increasingly tying together products, consumer experiences, and advertising experiences says Kate Scott-Dawkins, global director-business intelligence at  GroupM in a conversation with Storyboard18. More on the ways in which AI-enabled advertising will shape the future of advertising and consumer targeting in the edited excerpts below. 

Q. According to GroupM's report Next10-AI on the technologies and behaviour that will shape advertising over the next decade, AI-enabled advertising will be 90 percent of all advertising by the year 2032. Could you define this AI-enabled advertising, what is the current size and what is the headroom for growth?

We spent a lot of time talking to various experts across the GroupM and WPP network about how we were using the term artificial intelligence and how it’s being implemented across various categories. We took a high level, broad definition, which includes a lot of technologies and tools that are under the umbrella of AI, so others include machine learning that are present on platforms such as Google, Meta, and Amazon, and it helps match search intent with advertising and search results. It also helps in optimising and targeted campaigns and also includes things such as natural language processing and what we have found is that all of these technologies are being used together quite heavily in advertising today. So, we estimate that 45 percent of ad revenues or over $370 billion is AI-informed or AI-enabled and that’s going to climb to roughly $1.3 trillion or more than 90 percent of all advertising by the year 2032.

Q. So if 90 percent of all advertising will be AI-enabled, how will the advances in AI and evolving media channels help marketers through different product categories and sectors such as auto, consumer packaged goods (CPG), and more? 

What we are going to see is more marketers tying together the use of AI across products,  customer experience, and advertising. In CPG, brands are already experimenting with personalised nutrition or more personalised beauty products. In another category such as retail, something like computer vision is going to have a huge impact changing the way consumers search for products and the way brands advertise for products and the sources of competition in the marketplace. The future could be searching the product through images rather than text and I think that’s an area where a lot of brands today still aren’t very mature. Therefore, AI is going to change the way they advertise their products.

Q. There is a growing clamour for data privacy and data safety, and now with the deprecation of third party cookies, what are the challenges a marketer could face? And, how can AI-enabled solutions help the marketer in targeting the right audience?

This is a source of inherent tension in the industry. On the one hand, we believe in delivering personalised and relevant advertising to people and on the other hand, the world is moving towards greater data privacy. So, it’s really about figuring out how these two things can co-exist. We are also heavily using things like data clean rooms within platforms such as Google or Meta where they are aggregating and anonymising users and AI. 

Q. Also, with programmatic ad buying, one of the major concerns has been ad placement and brand safety. One of the things to avoid that is buying from PMPs or TMPs. However, it is still not where the bulk of transactions take place, because of the efficiency that open marketplace offers such as quick targeting of the audience. Does this create a dangerous environment for brand safety?

Every brand has its own goals and risk tolerance, so certainly one size doesn’t fit all. What we want to see is a blending of costs and suitability. We do want a world where advertising can show up against news content in the open marketplace even if that content is not necessarily sunshine and roses. But, we haven’t seen real evidence of consumers having seen a long-term negative impact of viewing advertising against that kind of content. So there are places where AI can be very useful where advertising is totally problematic or isn’t right, especially as the processing and understanding of language gets better in terms of avoiding places like news or social media.

Q. How do you see web 3.0 impacting programmatic ad buying? Blockchain has been a solution for ad fraud for a few years. Web 3.0 builds solutions on blockchain and has decentralised data because of it, which will empower the consumers. What role will AI play in this transformation of marketing?

Few years ago, some folks said that blockchain will be a solution for ad fraud but it hasn’t done so fully yet. So as GroupM and our ability to help shape the future of advertising to work better for people, advertisers and publishers, we want AI to augment human intelligence rather than just automate things and replace humans.

Note to readers: Storyboard18’s new Month In Focus initiative spotlights themes and topics that are pushing marketers to reshape and rethink how brands interact with today’s customers. Our theme for this month is Stacks & Strategies, a martech and adtech spotlight on how decision makers and marketers are advancing the adoption of new technologies and tech-driven strategies in the brand marketing ecosystem. From the defining trends and preparing for a cookiepocalypse to how progressive martech strategies help fast track business and brand growth. Catch this special on Storyboard18.

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