The world of digital advertising is changing quickly. Industry professionals are already having productive discussions on the advantages and moral concerns of implementing artificial intelligence (AI). Chris Camacho, managing director at Cheil UK, thinks that AI advertising will be aimed at understanding a consumer’s mood. This insight will allow advertisers to make valuable connections with their audience. This approach aims to create more relevant advertising experiences while raising questions about privacy and the consumer data economy.
Cheil UK has collaborated with the startup Spotlight. Now, collectively, they are researching how large language AI models can analyze patterns in online behavior and tailor advertisements accordingly. Camacho says the true opportunity lies in improving big, transformative concepts. He believes it’s better than moving to distributed, one-to-one micro-ads that most people don’t even see.
“I think there’s going to be the camp that uses AI well and in an ethical manner, and then there’s going to be those that use it to persuade, influence, and guide people down paths,” said Camacho. Beneath the surface of this sentiment is a growing concern in our industry. AI advertising may soon turn into a Sloppy Creepy, as experts warn.
Ivan Mato of brand consultancy Elmwood supports Camacho’s perspective, arguing that personalized advertising can be dangerous. He emphasizes the danger of using technology to develop advertisements that seem more invasive than cutting edge. “AI opens new creative possibilities, but the real strategic question isn’t whether brands can personalize everything – it’s whether they should, and what they risk losing if they do,” Mato added.
Researchers in the US experimented with consumer response to advertisements for an iPhone. These ads served to people using ChatGPT-created personalized text. Among other tactics, this study was particularly interested in the effectiveness of targeted messaging on audiences differentiated by four distinct personality attributes. Jacob Teeny, an assistant professor at Northwestern University’s Kellogg School of Management, was the lead researcher on this project. He highlighted AI’s ability to create the right target audience. It hasn’t fully figured out how to tailor content to fit each individual’s psychological profile.
A lesson on the dangers of over-personalization
Calder cautions against the pitfalls of over-personalization. “Congratulations – your AI just spent a fortune creating an ad only one person will ever see, and they’ve already forgotten it,” he remarked. This highlights a critical challenge: striking a balance between effective targeting and maintaining consumer engagement.
Ethical advertising continues to be important to Camacho, and she wouldn’t have it any other way. He particularly wants to avoid AI being used for invasive or manipulative ads. “We don’t have to use AI to make ads creepy or to influence individuals to do things that are unethical. We’re trying to stay on the nicer side of it,” he said. His vision is for building deeper connections between brands and consumers instead of taking advantage of their weaknesses.
Besides having important civil rights consequences, digital advertising has serious public spending consequences. In fact, Digiday spoke to experts who’ve calculated that 15% of what brands spend on digital ads aren’t seen. Personalized AI ads can go a long way to solving this problem by making sure ads match up better with the intended audiences.
Both Camacho and Mato are quick to admit that use of data in personalized advertising is not that simple. “There’s also the surveillance question. All of it depends on a data economy that many consumers are increasingly uncomfortable with,” Mato stated. Consumers are more aware than ever around how brands are using their information. Consequently, brands find it difficult to be truly trustworthy and transparent.
As Cheil UK collaborates with Spotlight to refine its AI capabilities, there is hope that advancements will lead to more meaningful advertising experiences. To be clear, the aim is not to replace humans with bots, but rather to customize experiences informed by predictive AI analyses of unique personalities. Camacho sees this change as part of an overall trend where big advertising is moving away from simple demographic targeting and towards more emotional and psychological resonance.
“It still has some development to go, but all roads point to the fact that this will become the way digital advertising is done,” noted a representative from Cheil UK, reinforcing the idea that the industry is on the cusp of a significant transformation.