Ad spending is climbing, thanks to tireless consumers and AI – Marketplace
Global spending on advertising is likely to pass the trillion-dollar mark for the first time next year, according to media agency GroupM.
That would represent an increase of nearly 8% over this year and it means the ad industry will cross the threshold a year earlier than GroupM initially expected.
And that total, by the way? It does not include any of the money being poured into election advertising here in the United States.
The increase in ad spending is here despite high interest rates and consumers with dwindling savings and rising credit card debt indications that consumers arent exactly champing at the bit to buy stuff.
GroupMs previous prediction reflected high interest rates, which usually slows down consumer spending. But, we didnt see that play out to the extent that we sort of expected over the first quarter or half of 2024, said Kate Scott-Dawkins with GroupM.
She said theres another factor forcing spending upward: the artificial intelligence boom, of course. The report says AI could inform more than 94% of ad spending before the end of the decade.
Elea McDonnell Feit, a marketing professor at Drexel University, said AI is increasingly being used to help advertisers find the right customer at the right time, and place that ad in the right content.
And so advertisers are willing to spend more, because AI could make every dollar they spend more effective.
It can also customize any kind of ad, from static images to TikTok videos, said Bobby Zhou, a marketing professor at the University of Marylands Robert H. Smith School of Business.
The level of micro-targeting, the ads that you see, the ad copy that you see will be substantially different from the ad copy that I see, Bobby sees, he said.
So even if Bobby and I are shown the same running shoes, Ill see them in my favorite color, with an explanation of why theyd be great for someone in my neighborhood living my lifestyle.
That is the power of generative AI, and its already happening, Zhou said.
GroupM said the next big question is whether all ofthis AI-generated content will be as effective at getting people to buy stuff as human-made content already is.
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Ad spending is climbing, thanks to tireless consumers and AI - Marketplace
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