AI is rewriting the ad industry — and its jobs

Whether you notice it or not, artificial intelligence has infiltrated the advertising industry. Sometimes subtle and sometimes glaringly obvious, 60% of ad agencies say they’ve used AI and another 30% say they’re exploring it.

The big question: What does this mean for the future of the ad business and the people who work in it?

“Marketplace Morning Report” host Sabri Ben-Achour spoke with Gil Luria, head of technology research at the financial services firm D.A. Davidson, about where advertising is headed as AI takes a bigger role. The following is an edited transcript of their conversation.

Sabri Ben-Achour: So traditionally, we search for something on Google, see ads. Click on some websites, see more ads. Now we just ask, AI, how big of a problem is that?

Gil Luria: For advertisers, it's a problem because the world is going to change a lot for them. We've really fine tuned the system that you're talking about, and now we're throwing a wrench into all of that and saying actually people aren't interacting with the web in the same way they used to, which means a whole completely different type of interaction that you are all going to have to adjust to, in terms of what ads you present, how you present them, how you pay for them, how much you pay for them.

Ben-Achour: Yeah, I mean, we have seen OpenAI testing out ads. Is that the future, or what else do you think we're going to see here?

Luria: We will have ads within the free tiers of ChatGPT and Gemini. That's almost a certainty, because they need to pay for it somehow OpenAI has has laid some ground rules for what they will and won't do within ads, but it's going to be a pretty tricky situation for them to navigate, because right now, we're mostly having these AI chats without any advertising exposure, and as that changes, they need to make sure consumers are comfortable, otherwise, consumers will use their chat less.

Ben-Achour: You know, on the other hand, to all of this, does AI create new tools or abilities for advertisers?

Luria: What AI now allows you to do is create campaigns a lot faster, both the visuals and the copy, and do so in a way that's so fast that you can actually create multiple versions, test them all, evaluate them, and then pick the ones that work within hours or days instead of within weeks, which is what it would take if a human had to do all that work. So this is a big part of how advertising is going to get revolutionized, especially in the digital context, in the social media context.

Ben-Achour: So, that sounds great for a business that's trying to launch an advertising campaign, but it sounds a little less great for the ad agency, that sounds like could be partially replaced by AI.

Luria: My thought on on AI replacing people is that people that use AI well will replace people that don't use AI well. Digital agencies that embrace these tools and use them to be a lot more productive and create a lot more value for their customers and then for consumers, should thrive and do a lot better, and ad agencies and marketing agencies that are stuck in their ways and fail to embrace AI will fall by the wayside.