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Daily Maverick

Crossed Wires: Artificial intelligence slouches towards the advertising industry

Quite suddenly, AI is shredding long-established norms everywhere in this vaunted industry. One of the most startling developments has been the release of Meta's Veo 3, a text-to-video application released a few weeks ago, which has to be seen to be believed. And what rough beast, its hour come round at last, Slouches towards Bethlehem to be born? — WB Yeats, The Second Coming Perhaps it's a bit of an overkill to link AI's looming encroachment on the advertising industry to Yeats' darkly foreboding poem. Yet, having just returned from Cannes, where the global ad industry's biggest event, the Golden Lions, is held, it was clear that AI was hanging like a shadow — not visible to everyone perhaps, but obvious at least to those who are certain of the disruption to come. They were the ones who looked like deer caught in the headlights, standing startled and paralysed amid the glitz and glamour of the event. I was there to present a paper titled 'AI in Advertising: Governance, Regulation and Other Troubles' on behalf of the Icas (International Council for Advertising Self-Regulation) Global Think Tank. I was not the only one talking about AI in Cannes; the conversations and presentations were everywhere. One disquieting question didn't have to be articulated: has the advertising industry arrived at its Fleet Street moment? The question refers to the collapse of the printed newspaper business in the mid-'90s, catalysed by digitisation and the internet, which brutally upended an industry that had remained largely unchanged for more than a century. There were many casualties and only a few survivors in its wake — which is what is likely to happen in advertising. Quite suddenly, AI is shredding long-established norms everywhere in this vaunted industry. One of the most startling developments has been the release of Meta's Veo 3, a text-to-video application released a few weeks ago, which has to be seen to be believed (just go to YouTube and search for Veo 3; here is but one example). The quality of the video and the AI 'actors' and locations is indistinguishable from those shot with cameras and populated by human actors and extras. With Veo 3, the user describes the scene they want to see, gives the actors a 'script' and 'directions', and Veo 3 does the rest. (Veo 3 is not the only text-to-video app, just the latest.) Professional-level text-to-video is a brand-new strand of Generative AI. There are, of course, grumbles. It has limitations. Currently, Veo 3 can only render eight seconds of video. Some visual elements are difficult to control or 'not quite right'. It is expensive. Expensive? Consider this: A marketing director will brief an agency to deliver a 30-second video commercial. The agency then refines the brief, perhaps with a rough storyboard and brand/campaign context, and passes it on to a few video production companies. One of those companies comes up with a creative approach and pitches a treatment: three days of shooting, four locations, three actors, 10 extras, two weeks of post-production. Budget? $1.5-million. Or the agency can use Veo 3 in the hands of a single tech-savvy director and perhaps a good human Veo 3 expert. Cost? $150,000, with 10 differently flavoured commercials rendered for presentation to the client within two weeks. It doesn't take a rocket scientist to see where this is going. It signals the end of video production companies, except for live events or productions with celebrity actors. One estimate I heard at the conference predicted 3,000 production company bankruptcies globally within two years. And it may mean the end of some ad agencies if some corporations decide to plough the money they're saving in production costs into forming new in-house agencies. Dystopian scenario This scenario isn't even the worst of it. Meta CEO Mark Zuckerberg recently spelt out the following audacious and dystopian scenario: 'We're going to get to a point where you're a business, you come to us, you tell us what your objective is, you connect to your bank account, you don't need any creative, you don't need any targeting demographic, you don't need any measurement, except to be able to read the results that we spit out. I think that's going to be huge, I think it is a redefinition of the category of advertising.' Here is his vision: A business comes to Meta with a product and a few ideas, and then Meta takes over; it does everything: creative concept, production, media strategy, analytics. Then AI constantly refines the ad in near-real time, on an ongoing basis, until it performs at maximum efficiency. Zuckerberg, somewhat brutally, implied that, in the future, advertising agencies will not be required. There are those who will strenuously object, who will talk about brand strategy and management, understanding client product roadmaps, and other assumed sacred cows — the 'deep' cores of the agency proposition. These too, I submit, will fall to AI as soon as it learns from hundreds of thousands of successful brand case studies and is able to generate a plethora of its own novel approaches. Audience targeting Finally, there is the matter of audience targeting. The holy grail of the advertising industry has long been the idea of the perfectly relevant ad — one that is pitched directly and only to individual consumers who are looking to buy that very product or service. Consumers have also sought the same thing: ads that matter to them and do not waste their attention. It has been assumed to be a perfect match of incentives. But AI is now able to understand much more about individuals than we are comfortable with. By analysing our internet behaviour, our social media behaviour, our friends, our devices, our buying patterns, even the tenor of our emotional states when we post, AI can paint a near-perfect picture of who we are at any moment. This intrusion is a privacy nightmare, one demanding regulation, which may not be properly enforceable in a fast-fracturing and chaotic landscape. There will, of course, be some advertising agencies which grab the nettle and shed their old skins to quickly embrace and exploit AI, perhaps pivoting quickly enough to other business models to avoid obsolescence. Others will end up like the celluloid film editors I used to know, obstinately and proudly refusing to submit to the newfangled video editing systems that started arriving in the late 1990s. They were brave and foolhardy, and they died alone. DM Maverick451 in SA and Legend Times Group in the UK/EU, available now.