Imagine a scenario: you’re casually browsing social media one evening, and the advertisements begin to resonate with an uncanny familiarity. They’re adorned with your preferred colors, accompanied by music you enjoy, and the language mirrors phrases you frequently use.
This is the nascent reality of AI-driven advertising, a present-day phenomenon.
Traditionally, social media advertisers targeted individuals based on broad demographic classifications—for instance, students in Edinburgh or 35-year-old women with a penchant for yoga. Advertisements would then “follow” users based on their online search history.
However, leveraging AI’s capacity to process vast datasets, firms like Cheil UK are now capable of generating myriad ad variations tailored to distinct personalities and personal situations. The objective is to deliver a multitude of unique ads to millions, personalized down to the tone, phrasing, music, and color palette.
To achieve this, Cheil UK has partnered with the startup Spotlight to develop an AI platform. They utilize large language models (LLMs), such as ChatGPT, to gather extensive insights by posing numerous questions about a brand, thus ascertaining public sentiment online.
The insights gleaned enable them to create ads that not only cater to a 35-year-old yoga enthusiast but also consider factors such as recent vacations or upcoming nuptials.
“The paradigm shift is a move away from data collected based on gender, age, and readily available information towards a deeper emotional and psychological understanding,” explains Mr. Camacho.
“This deeper understanding allows for a more comprehensive picture of the individual.”
An additional advantage for advertisers is the potential to personalize content without the need for a custom AI system.
Researchers in the US evaluated consumer reactions to iPhone ads featuring text generated by ChatGPT, tailored to individual personality traits.
The study revealed that personalized text was more persuasive than generic ads, and consumers were indifferent to the fact that it was AI-generated.
“Currently, AI excels in targeting. However, personalization, where a brand creates creative copy that matches elements of your psychological profile, is still in its early stages,” notes Jacob Teeny, a marketing professor at Northwestern University’s Kellogg School of Management.
“While it requires further development, all indications suggest this will become the standard for digital advertising,” he adds.
Personalized AI ads could also address the issue of digital advertising ‘wastage,’ where 15% of digital ad spending goes unnoticed, yielding no business value.
However, personalized advertising is not without its detractors.
“Congratulations, your AI just spent a fortune creating an ad only one person will see, and they’ve already forgotten it,” remarks Alex Calder, chief consultant at AI innovation consultancy Jagged Edge.
“The real opportunity lies in using AI to deepen the relevance of powerful, mass-reach ideas, rather than fragmenting into one-to-one micro-ads that no one remembers. Creepy slop that brags about knowing your intimate details is still slop,” he continues.
Ivan Mato at brand consultancy Elmwood concurs, questioning consumer acceptance, regulatory approval, and the desirability of such practices for brands.
“There’s also the surveillance question. All of it depends on a data economy that many consumers are increasingly uncomfortable with,” says Mr. Mato.
“AI opens new creative possibilities, but the real strategic question isn’t whether brands can personalize everything – it’s whether they should, and what they risk losing if they do.”
AI-personalized ads could also face ethical challenges, Mr. Camacho at Cheil UK acknowledges.
“There’s going to be the camp that uses AI well and in an ethical manner, and then there’s going to be those that use it to persuade, influence, and guide people down paths,” he says.
“And that’s the bit that I personally find quite scary. When you think about elections and political canvassing, and how the use of AI can influence voting decisions and who is going to be elected next.
However, Mr. Camacho is committed to upholding ethical standards.
“We don’t have to use AI to make ads creepy or to influence individuals to do things that are unethical. We’re trying to stay on the nicer side of it. We’re trying to enhance the connection between brands and individuals, and that’s all we’ve ever tried to do.”
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