To understand how AI is revolutionizing advertising, look beyond its creative capabilities

In the year since ChatGPT went viral, Generative AI’s creative capabilities are transforming the advertising industry.

Major global advertisers, including Nestlé, Virgin, and Coca-Cola, are leveraging Generative AI applications like DALL-E, Midjourney, and ChatGPT for creative jobs ranging from answering campaign briefs to making video ads. Why? As WPP CEO Mark Read recently told Reuters, “the savings can be 10 or 20 times.”

But while marketers have focused on Generative AI’s awe-inspiring front-end capabilities, in the back-end world of product development and user experience, ad tech AI has been redefining advertising as we know it for several years.

In particular, advertisers buying media programmatically on fast-growing channels like connected TV, mobile, audio, and digital out-of-home can tap in to AI-powered tools that seem tailor-made for the scale and reach of the open internet.

Back-end AI engines are revolutionizing the industry and giving programmatic advertisers some major advantages — namely, ingesting millions of data points and surfacing unexpected insights, improving campaigns in real time, and acting as a co-pilot, freeing up marketers to tackle the higher-level responsibilities of their pay grade.

AI powers back end of advertising

Don Draper’s sharp insights make for great TV plot points, but today’s top marketers are coupling their instincts with data-driven insights to craft compelling advertising.

Advertisers can count on AI ad tech tools to analyze an ocean of data — up to 13 million advertising impressions every second on The Trade Desk alone, for instance. With AI, they can spot patterns and trends based on data about demographics, purchase history, and online behavior — insights that could easily escape an advertiser who’s only observing their social circle or tallying customer surveys.

This level of insight can lead to campaigns that increase engagement, improve conversion rates, and give consumers a more relevant advertising experience.

What’s so compelling about AI is that it can help us place smarter bets in the present and the future — speed and the ability to see around corners being paramount for advertisers. It can help us analyze historical data and identify future opportunities thanks to predictive analytics, forecasting models, and market trends analysis. This enables greater planning precision and lets brands respond on the fly when social and economic conditions change unexpectedly.

More than that, this activation of AI can result in maximized ROI and minimized wasted ad spend, freeing up resources that brands can reinvest in marketing activities that are paying off.

Co-pilots: human and AI-powered advertising

Rather than fear Generative AI, marketers should embrace it as a data-driven co-pilot. AI should amplify a marketer’s creative and analytic skills, helping them do more with less, rather than flat-out replacing the people who make our industry brilliant.

Real-time campaign optimization via AI can enable marketers to message at the speed of culture, with constant changes in consumer tastes, needs, and priorities. And having AI as a co-pilot and co-creator is essential to producing marketing at the highest level — and volume — needed to thrive in today’s fragmented media landscape.

AI-powered analysis isn’t a perfect crystal ball. It still needs human input to set parameters and direct it toward relevant goals. And relying solely on in-flight campaign optimizations while forgoing post-campaign analysis could mean missing out on the big-picture takeaways of how a given campaign performed.

In the same vein, over-reliance on Generative AI as a creative or strategic partner could deprive brands’ marketing efforts of that most fleeting but impactful element: The human touch, which can unlock customer empathy and creative execution beyond what AI alone can achieve.

But unlocking the power of AI-assisted analysis, predictive insights, and asset development could ultimately be a game changer for marketers, helping them quickly spot and take action on unique findings in that ocean of data points.

The age of AI in advertising

As marketers wrestle with how to integrate what is arguably the most buzzed about and revolutionary technology of the last decade, it’s imperative to look beyond the hype and recognize AI’s full potential in marketing, especially as the volume of data, media, and consumer touchpoints will only continue to multiply.

Inevitably, the good marketing of the future will take full advantage of the plethora of Generative AI applications available in the front end of their marketing toolkits. But the great marketing of the future will fuse AI-powered creativity in the front end with AI-powered analysis and strategy in the back end, serving as a co-pilot to human marketers and empowering them with more automation and insight. Together, AI and humans will likely become the dynamic duo we never saw coming, delivering the most powerful advertising the world has yet to see.

The Current is owned and operated by The Trade Desk, Inc.