The Urgency of Embracing AI in Media and Advertising Street Fight

Embracing AI in Media and Advertising

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History changes slowly and then overnight. A mere two years ago, the early publicly-available generative AI models from OpenAI, Microsoft, Google looked like curiosities–intriguing but plagued by obvious limitations. Today these models have advanced so far and so fast that they are already well on their way to changing media and advertising forever.

AI is not new–classic “predictive” AI has long underpinned much of our technology. What is new is the rapidly increasing availability and capability of services like ChatGPT that allow end users to directly experience how broadly useful these models can be in day-to-day life.

We have only begun to scratch the surface of what already-available models like GPT4 can do when properly applied and integrated into existing economically valuable workflows. Even current GenAI already has creative and analytical abilities exceeding the average untrained human, plus the “infinite capacity for taking pains” that was once considered the mark of genius.

And while this burgeoning technology will continue to encounter stumbles along the way, make no mistake – it will continue to improve, and as it does it will reshape our worlds in countless ways. The coming wave will undoubtedly and irrevocably alter nearly every industry, but few will be as dramatically and rapidly reshaped as the advertising and media industries.

This piece will explore specific ways AI will impact–but also have the potential to help–the media and advertising industries.

The AI-powered golden age for advertising and media

AI will have a demonstrable and industry-changing effect on media and advertising as their paths diverge—first boosting short-term profitability across the board, but eventually acting as a centrifuge that separates winners and losers depending on how enthusiastically and creatively they adopt and adapt to AI.

In this first wave, AI will enable endless creation, repurposing, and remixing of content,  thus dramatically lowering the cost of producing ads  (OpenAI’s text-to-video engine Sora is a good example of where this is going, and how quickly.) It will also enable dramatically more effective advertising by both enabling automatic creation of truly personalized ads along and also enabling nuanced targeting.

Advertisers pay for results, and so higher ad effectiveness will mean that media platforms can justify charging advertisers more to reach increasingly persuadable audiences. This will lead to a surge of revenue for publishers who can win the attention war through unique, compelling content incorporating their own distinctive IP and surfaced by TikTok-quality recommendation algorithms.

The bifurcation of media and advertising

The next wave of the AI revolution will be harder for media and advertising industries to navigate as AI increasingly upends the historic synergy between advertisers, media, and consumers themselves.

As AI capabilities improve, consumers will increasingly turn to AI assistants to make purchasing decisions for them. Indeed generative AI and new Internet browsers are already inuring consumers to the idea of receiving one definitive answer to their queries instead of pulling in multiple links to various options.

Brands will need to stop producing copy aimed to influence persuadable and irrational humans. They will need to shift to providing offers and data that support AI agents in deciding that their product is the best available fit for the user’s desires.

So, what should the media companies do?

Something every publisher can do is work on strengthening their relationship with their readers, viewers and listeners. Some will survive and thrive in direct subscription models, especially publications that users  can trust to provide consistently accurate, timely, and vetted information.

But media companies will need to lean into every revenue stream they can find, especially for legacy publishers sitting on stores of IP and data. Companies with robust IP, whether it be iconic characters or decades of content covering the ebbs and flows of humanity, will have a valuable asset for AI models and may want to consider licensing or partnering with them.

The most important thing is to embrace change and be comfortable with the uncomfortable. Throughout history, there’s an argument that large publishing companies could (and should) have innovated and created the very things that disrupted them. Companies that have tried to hold back the tide rarely succeed–they make themselves even more vulnerable to disruption.

Companies that will thrive during this time will use Gen AI to maximize the value of their unique and valuable proprietary data, IP, and domain expertise that they successfully keep out of the AI’s training dataset. .

The rise of cookieless traffic has reinforced the importance of media companies owning their data and consumer relationships. AI supercharges that need. Every media company should be cross-leveraging a robust media and retail arm in order to observe the full customer journey within its own walls, thus creating a powerful and proprietary feedback loop of data.

There are many uncertainties in the future and exponential progress in AI surely holds surprises for us all. The goal now should be to embrace change, experiment, and think about AI as a rising tide that will help those who prepare for the future.

As one of Upwave's first engineering hires, George originally joined Upwave with the mission of building Upwave's statistical capabilities from scratch. Since then he's grown with the company to become Head of Data, then Vice President of Engineering, and now CTO.