What should advertisers be asking their agencies about AI?

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We’ve managed a significant number of pitches over the last couple of years and there’s no getting away from the fact that Artificial Intelligence has become the hot topic in pitches. And little wonder when you consider how advertisers are leveraging AI to streamline their marketing efforts, optimize their campaigns and improve their targeting capabilities.

However, as AI technologies continue to evolve, advertisers must ensure they understand the benefits and limitations of AI and its legal and privacy concerns. Here are some fundamental questions advertisers should ask themselves when it comes to AI:

What Are the demonstrable benefits of AI technology?

AI algorithms can analyze vast amounts of data to identify patterns which should lead to improvements in an an array of areas including:

  • Audience targeting to allow advertisers to target their messages more effectively
  • Automation of advertising processes reducing the time and resources required to create and manage campaigns
  • Personalization to individual users based on interests, preferences, and behaviours, increasing the chances of engagement and conversion
  • Real-time optimization to determine which ads are performing well and which aren’t
  • And yes, cost effectiveness. Advertisers should be able to optimize their spending to achieve maximum impact at a lower cost, leading to a better ROI

But what does your agency say – what benefits are they proposing – and how can these be proven?

Do you have Clients we can talk to about their experience?

There’s always been a running joke about how small the advertising business in Canada – but my guess is it’s about to get a whole lot smaller globally. And the reason is that when it comes to AI, none of us know what we don’t know, and none of us are quite sure whether it’s a Godsend or the devil incarnate. So advertisers are going need to be talking to their peers about their experiences with AI and whether the hype is real or just smoke and mirrors.

So whether you’re an advertiser working with an incumbent, or you’re in the process of figuring out new solutions with a potential new agency partner – connecting with other clients about their experiences is likely going to be a first port of call as we all try and figure this out together.

What Are The Limitations Of AI?

AI is excellent at identifying patterns and trends but has limited understanding of the context in which those patterns occur. This can lead to inaccurate predictions or recommendations. Advertisers also need to be clear that AI is not creative in the way that humans are. It cannot create entirely new concepts or ideas, only generate variations of what it has been trained on. Ultimately, AI requires human input to operate effectively and advertisers need to ensure that the data and inputs they provide are accurate, relevant, and free from bias.

What Legal and Privacy Concerns Should We Know About?

As advertisers increasingly rely on artificial intelligence (AI) to collect and analyze data for targeted advertising, there are obviously critical legal and privacy concerns to consider:

  1. Data privacy. Advertisers must ensure that they are collecting and using data in a way that complies with applicable data privacy laws
  2. Discrimination. AI can unintentionally perpetuate or exacerbate discrimination by making biased decisions based on demographic or other characteristics and advertisers need to ensure that their AI models are designed in a way that avoids discrimination and bias
  3. Transparency. Advertisers must be transparent about how they are using AI to target ads and should disclose that information to consumers, what data is being collected and how it is being used.
  4. Liability. Advertisers can be held liable for any harm caused by their use of AI, including data breaches or other privacy violations. So all advertisers need to be aware of their legal responsibilities and take appropriate steps to mitigate that risk. Cue your legal team who need to be ahead of the curve on all this before you begin.

Who owns the data?

AI data is a combination of first-party data, which is the data that companies collect from their own customers, and third-party data, which is data that is collected from other sources. So who owns your data depends on who you ask.

If the data is generated and owned by the advertiser and they choose to share it with their advertising agency(s) for the purpose of developing and executing campaigns then it’s likely the advertiser that will want to own it. But if the data is generated by the agency as part of their services, the agency(s) may have a legitimate claim to ownership of that data.

So before anyone does anything with any data, this should determined and agreed between the advertiser, their respective agencies and the AI companies, to ensure before you move forward with any AI marketing initiative.

And… What do you need from us?

It’s likely that not everyone saw that question coming… but the reality is advertisers can’t put AI on autopilot with their agencies. It would perhaps be easy to say ‘invest in training…’ and yes, that’s an option, but in the short term advertisers need to equip themselves with sufficient knowledge to enable them to:

  1. Understand the basics. At the very least, advertisers must have a basic understanding of what AI is, how it works, and what it can (and can’t) do. This will help you communicate your needs and goals to your agency more effectively.
  2. Data quality. AI algorithms require large quantities of high-quality data to function properly. As an advertiser, you should ensure that your agency has access to relevant data and that the data is accurate, secure and scraped of personal information
  3. Privacy and ethics. With the increasing use of AI in advertising, it’s important to consider the privacy and ethical implications of using AI technologies as noted above. At a minimum, advertisers must ensure the have taken appropriate measures to protect user data and ensure ethical advertising practices that follow.

Yes, AI in advertising has the potential to revolutionize the way businesses engage with customers. However, as with any technology, there are a myriad of questions that businesses need to ask themselves about the impact of AI on advertising and these are just a few to get you started.

So, are you ready to embrace AI with your agency? Are you excited, terrified or just confused?

(Yeah, me too).


Stephan Argent is Founder and Principal at Listenmore Inc offering confidential advisory to marketers looking for truly independent insight and advice they can’t find anywhere else. Read more like this on our blog Marketing Unscrewed / follow me @StephanArgent

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