Everyone’s talking about AI replacing advertising jobs but what about AI replacing advertising? In this article, Mediaocean CMO Aaron Goldman separates fact from fiction while speculating on the future.
We’ve all seen the hyperbolic headlines: AI is disrupting advertising!
Sam Altman delivered a wakeup call when he proclaimed that AI will do “95% of what marketers use agencies, strategists, and creative professionals for today.”
Regardless of how accurate this is, the point is not that these roles will go away – it just means they will change.
To quote Bill Wise from a recent #WiseWords post: “AI isn‘t replacing people, it‘s replacing inefficiency.”
Which begs the question: in an industry rife with inefficiency, will AI replace advertising?
Put another way, as Karsten Weide pontificated in a guest post for Marketecture Media, ‘When Bots Buy, What Happens To Advertising?’
As Alex Kantrowitz of Big Technology likes to say, what often gets lost in these debates is the nuance – so let’s parse the rhetoric from reality.
At the extremes, two scenarios could play out:
Firstly, in a world where AI agents facilitate critical moments of truth for consumers making decisions about brands, products, and services – and immediately execute transactions – advertising becomes obsolete.
OR
Advertising becomes the de facto engine that drives decisions, with agents talking to agents (at the direction of humans) and matching the best brands, products, and services to meet a consumer need in the moment.
Of course, the most probable outcome is something in the middle, with AI taking on a more prominent role in dictating the purchase funnel and advertising having an impact at multiple stages in the process by influencing both humans and agents.
In that sense, AI will replace inefficiency, not advertising.
Sure, we may see some of the ad formats and pricing models change – as I posited in my last piece, ‘Will AI Agents Pave the Path to CPA?’
But, in a world of ‘Zero-Click Search and the -1 Moment of Truth,’ advertising still has a critical role to play in connecting brands and consumers.
Besides, advertising is really the only way that ChatGPT and other AI agents will be able to scale across the global population and realize their full potential – and valuation.
Marc Andreessen of Andreessen Horowitz said it well on TBPN in a recent interview: “If you want the frontier AI model to be available to five billion people for free, you need to have an indirect business model – and ads are the obvious one."
He goes on to say that, as Google figured out very early: “A well-targeted ad at a specifically relevant point of time is actually content – it actually enhances the experience.”
Now that‘s a Googley Lesson!
