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Behind the Numbers: an EMARKETER Podcast
AI Ads for $2K? Meta, Kalshi, and a Reimagined Ad World | Behind the Numbers
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- [00:00]
Marcus
In marketing, everything must work seamlessly. Otherwise, efficiency, speed, and ROI all suffer. That's too much suffering. Quad, however, is obsessed with making sure your marketing machine runs smoothly with less friction and smart integration. Much smarter. Better marketing is built on Quad. See how better gets done at quad.com/build better. Hey, gang. Is Friday, July 7th. Yuri, Jeremy and listeners, welcome to behind the Numbers new marketer video podcast made possible by Quads. I'm Marcus and before we get going today, I just wanted to let you know that we have some new branding for the podcast. Hopefully the same great content. Our logo is changing to make it easier for you to find the right show for. For you. Blue logo is for behind the Numbers and that's with me keeping you up to date with the latest conversations happening in the worlds of media, advertising and technology for about 20 minutes every Monday and Friday. That's a video one. Sarah's Reimagining Retail show is in purple and she'll be discussing everything. Shopping every Wednesday as always. And Rob's banking and payment show is in green where he examines the universe of money every second Tuesday of the month. We also have brand new social media content for you on LinkedIn, Instagram and more with behind the scenes looks, polls to get your opinions on what we're discussing, and an ask me anything segment where you can literally ask me anything. I regret this already. All right, let's get on with the show. Today's power packed episode, we have two people joining me for the conversation. Principal analyst covering digital advertising, media and technology. He calls New Jersey home. It's Jory Wormser.
- [01:46]
Yuri Wormser
Hey, Marcus, how are you?
- [01:48]
Marcus
Hello, sir. Terrific, terrific. How are you?
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Yuri Wormser
I'm doing great. Enjoying summer?
- [01:54]
Marcus
Indeed. Although it's nearly over. We were just discussing, which is bleak but true. Definitely Thanksgiving round the corner. Say again.
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Yuri Wormser
Definitely. A half empty take.
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Marcus
Director of briefings, living life in New York, it's Jeremy Goldman.
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Jeremy Goldman
Howdy. And by the way, happy 85th birthday, Ringo Starr.
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Marcus
Oh, that's.
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Jeremy Goldman
Wow.
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Marcus
Every birthday I'm like, I made it. Is that bad? I just, I just don't see 85 in my future.
- [02:27]
Jeremy Goldman
You know, you have a, a raucous life sitting in front of a microphone and very.
- [02:32]
Marcus
That's why. It's because I'm so rock and roll. I'm like, wow, this is gonna end real soon. But hopefully not too soon. We've got episodes to do. Today's fact is where we begin. The average adult will walk almost 75,000 miles over their lifetime. That's the equivalent of traveling around the earth. Three times according to the ordinance survey. That's amazing. You'll walk around the earth three times in your life. Oh, j me in. I'm sorry you aren't as impressed as I am. All right.
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Jeremy Goldman
I. I was just thinking, as you said, that I'm like, how many of those miles are just people walking to go to the bathroom and coming back from the bathroom?
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Marcus
Because that's going to be a lot. Yeah, it's not going anywhere that adventurous. It's the same. Just taking the same trips.
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Jeremy Goldman
Yeah, yeah, just.
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Marcus
But you could walk around the earth three times if you wanted it to. If you're very active, you more than a 10,000 steps a day person, like five miles a day or whatever, then you could do it six times as.
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Jeremy Goldman
Long as you can pull oxygen from water. But yeah, that's a minor detail.
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Yuri Wormser
That's true. Yeah.
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Marcus
And it's also just good for you. Stanford researchers I was reading about this, say that walking boosts creativity by a lot. They examine creativity levels in people whilst they're walking versus sitting, and a person's creativity output increases by an average of 60, 60% when walking.
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Yuri Wormser
Just good.
- [04:14]
Marcus
I hate walking, though. I don't care how creative I could be. I'm creative enough. Came up with that read in the beginning and this fact of the day, which wasn't that impressive. Maybe I should walk more, get a better one. Anyway, today's real topic, AI and advertising. So the Economist had an article that we were reading for this episode and in it they were saying that Mark Zuckerberg, boss of Meta, has promised that brands will soon, by the end of 2026, be able to tell us. So the brands will tell Meta the objective they're trying to achieve, how much they're willing to pay for each result, and then they, Meta will do the rest. Sam Altman of OpenAI believes that 95% of what marketers use, agencies, strategists and creative professionals for today will easily, nearly instantly, and almost no cost be handled by AI. Yuri, what's your take on Mark Zuckerberg's and Meta's vision for the future of ads and AI? He's basically saying, you tell us what you want and we'll do everything, pretty much from targeting the right people, creating the right campaigns, the measurement part of it, and then firing the results back at you so we can iterate and do it all over again. Just give us your credit card and.
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Yuri Wormser
Your objective and there's truth in it. But there's, it's, it's overstated. I mean, there's still going to be a role for agencies. But it is true that a lot of the, the, especially kind of the, the, the lower touch advertising, the more, you know, the direct response advertising that Meta does at scale will be made a lot easier. And a lot of that can be automated with, with AI agents. Even some of the, you know, the, the, the, the lower level strategy when it comes to these campaigns, campaigns can probably be handled by Meta. So do I think it's going to take all business away from agencies? I don't think so and I don't think any, I don't think big brands will want that, at least in the short term. But I do think that a lot of the marketing processes that are now done by, by agencies can be handled by these big platforms like Meta.
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Jeremy Goldman
By the way, not only are you right, but what's really interesting is this made like a whole entire like, oh my God, this is going to change everything, these statements that he made. And then you started to see, by the way, a lot of Meta executives kind of walk some of those things back. So two things can be true. One thing is that it's getting easier and easier to run campaigns without the help of agencies and without that much help from human beings, even on the brand side. So that is true. What's also true is that if you want to do really well and you enlist the right kind of creative help, then you can develop a novel strategy. And I think that Yuri is right. I would also add that agencies aren't going away in part because they will find other things to do. It's not like, so you're not going to have as much like direct social media campaign planning from agencies, but they're going to move towards higher executive level function type tasks that you can enlist an agency for. So they're not going away, but in the makeup of where they're making the vast majority of their revenue that might shift over time.
- [07:44]
Marcus
Yeah. The piece from the Economist was pointing out that Meta and TikTok's kind of do it yourself tools seem to be aimed at more smaller businesses than the bigger brands that agencies use. And there's a Wall Street Journal article by Katie Dayton. She was saying that execs at the company repeatedly said the tools weren't designed to replace agencies, however, just to speed up their work and help smaller businesses that can't afford agencies. So I guess the hope is that it's going to bring a bunch more people into the fold.
- [08:13]
Jeremy Goldman
Agencies have a lot of, they carry a lot of weight in terms of telling A brand. Here's where you should be spending your money. Right. And there's a lot to be said for like if you're a social platform or if you're Google to have the agency advocating for spending money, you know, like in your channel. So in that sense, like what if is it in Meta or TikTok's best interest to automate agencies out of existence? Not really. And therefore they're going to be around. Like there's an economic incentive towards having people pushing your ecosystem.
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Marcus
Yeah, yeah. So I mean, which direction does this go in then? Because they said four out of five of the big agency holding companies have seen their share prices fall since the start of 2024. What does this all mean for agencies?
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Yuri Wormser
I mean, I think it does fundamentally change what they do to become more. I think, as Jeremy said, they do become more big strategy companies. They also become technology companies. I think you're seeing the agencies adapt by buying the data companies. You saw it with, with first with Omnicom buying ipg, then WPP buying Infosum, Google Assist buying lotam. So you're seeing that move to getting the data and then you're going to see, I think insights developed from that data already have and then you're probably going to have to develop these, these skills as an agency for machine to machine advertising and that that is going to be really high tech AI agent type of development. So I see that's the direction going, sort of both the big picture strategy, but also kind of, kind of almost like a technology consultant using their data and using their technology skills.
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Marcus
You say machine to machine advertising.
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Yuri Wormser
You mean brands advertising to AI platforms using agents, talking to other agents.
- [10:16]
Marcus
Yeah. This part I think is fascinating because another part of the piece was talking about so saying as AI powered agents are increasingly deployed to carry out tasks on behalf of people, humans, advertisers will need to work out how to influence these robot servants. Google recently unveiled a shopping agent that users can instruct to tell them when the price of a product falls below a certain level. Such agents may soon be given discretion to make more complex buying decisions. Sellers of online ads are already debating how much they should should charge when these are seen by an agent as opposed to a human pair of eyes. The future maybe one in which AI creates the ads, targets them and then reads them too. Jeremy, what do you make of this idea of creating ads for not people, but for bots?
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Jeremy Goldman
So yeah, I know that Yuri's done a bunch on agenda commerce recently that I encourage everybody to check out. I think that there's a lot of debate about when do we kind of get to this future where you're going to have an agent, where you're going to say, here's your budget, go spend it and then come back to me later and what that'll do to the advertising economy. I think it's reasonable to say that when we get there, and who knows, when we get there, then you're maybe going to see some other channels where you can actually reach actual human beings go up in value. So imagine out of home advertising, right? If people are spending more of their time walking outside and not engaged in E commerce, let's say, because you're getting an agent to go out and buy things for you, then you can imagine that certain, you know, platforms and modes of advertising actually become more beneficial and can charge more and will start to grow faster.
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Marcus
Yeah, it's interesting this, this shift in, in dollars because another part of that is, and again in the piece was saying clients, clients may pay less than before for ad creation, but they may reinvest the savings with the agency. One marketing boss of a global brand saying she is simply buying more ads with the money saved. On the creative side, marketers, like all managers, want to protect their budget. So the question is, will money saved lead to more ads? Because you save money because things are more efficient because of AI, will that lead to more advertising whether it's in the same channel or other channels, as Jeremy's saying? Or put another way, will AI use in marketing lead to less money spent on ads, money saved from efficiencies or more folks pouring money in, leading to more ads shown in more places and, or maybe just because of higher prices for the existing inventory.
- [12:57]
Yuri Wormser
I mean, there are a lot of variables at play, so it's hard to like definitively make a prediction on this. But I think the odds are really good that digital ad spending and ad spending in general is going to go up. Our digital ad spending is going to go up for the reasons Jeremy said there's. Each ad should be more efficient with better targeting. So in that way I think I expect to see digital, you know, digital ad spending going up. I also see, in addition, I think getting your name out there is going to be important. So I think investing in branding in a lot of these new channels to Jeremy mentioned, or existing channels, ctv, out of home places or influencers places that people are going to anyway, I think is going to go get more important. I think money is going to continue to flow into those areas.
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Marcus
Yeah, I think it's also interesting as well. That same marketing professor from Georgia State University, Mr. Sabu, was postulating that in addition to lowering production costs, AI will make it cheaper for marketers to personalize ads to target specific locations and and audiences saying, you may see a different version of the ad than I can see. So how personalized does our advertising become? Will there be a world where we eventually never see the same ad because it's so customized just for us?
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Jeremy Goldman
And by the way, Marcus, we're moving a lot closer to that than if you would have asked us five years ago. I think we would have a very different answer because people were talking about personalization and really what they meant was a little bit more like targeting. Like we're running five variations of an ad and now we're moving closer to a world where can we get to one to one in the very near future? That's not out of consideration where everybody sees, to your point, a slightly different variation because it's getting a lot easier to create so many different variations of ads based off of all these different criteria and to manage that amount of creative before just to even make it, but then to manage it and then to optimize so many different versions of an ad that would have been outside people's reach and now that people can use basically natural language to say please select every single one of these ads within a five mile radius of so and so and increase spend by 20% or pause those ads entirely. You'll be able to essentially query, you know, 500 different ads that you're running and optimize in real time using natural language. And we're getting very close to that.
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Marcus
Yeah, that's fascinating. Let's talk about one AI ad in particular. This was an AI video ad that made it quite a splash. Is this the future of advertising? Questions Bill Chappell of NPR. He explains that a special effects filled 30 second TV ad for Kalsha Kaushi. I don't know one of the two, probably. It's probably a third way and I've got it completely wrong. It's a betting company presents a string of characters in wild scenarios, making their picks for who would have won the NBA Finals. The whole ad was made with Google's AI tools in 48 hours for $2,000 by a chap called PJ Asetoro who boasted that he got to stay in his underwear for the entire shoot. One week after its streaming debut, the video also racked up over 3 million views on Kalshee's X account. Jeremy, is this story a flash in the pan or the future of advertising.
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Jeremy Goldman
It is definitely not a flash in the pan. I saw very similar things when I went to Freepik's upscale conference recently in San Francisco, where the cost essentially of creating, you know, like these video generation credits that you have to use, it's so low that if somebody has the right amount of creativity where they're brainstorming, maybe by themselves, maybe with an AI, they can constantly iterate with different shots and if they don't get the right kind of result, they can just go again. And the ability to put together a really strong 30 second shot using ingenuity and a whole lot of videos credits, that's something that is pretty much in the palm of a whole lot of different people's hands. We can put it in the show notes if we wanted to. Right now. Here's basically how to follow what Kalshi did there.
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Marcus
What's interesting about it is people reacted quite positively to this one. However, using AI to make your ads doesn't always work. Coca Cola revamped their classic Christmas ad using AI that didn't work out too well. I believe it was Toys R Us who did a similar, similar thing. As you can see from this, this chart here, nearly 2/3 of US adults feel uneasy about AI generated, generated ads. One third said very uncomfortable. The other third said somewhat uncomfortable. And then there was a third that said somewhat comfortable or very. But most people said we don't, we don't love it so much. So what's your take on this ad that was generated by, by AI?
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Yuri Wormser
As the technology gets better and it has gotten better with veo, which was the technology that Kalshi used, it, it will become less and less obvious that it's AI generated. And that's, I think, the difference. It's now, it's now something that is approaching realistic level. Earlier AI ads didn't seem realistic. There are glitches in there. There are artifacts of, you know, weird movements. I think now that the technology is better, you're going to see it take off. And I also think that people will be less aware that it is an AI generated ad.
- [18:54]
Jeremy Goldman
By the way, that Coca Cola ad, that's like the polar bear one, that was about seven and a half months ago. If you redevelop that ad right now, and again, we're talking about a little bit more than half a year, it would look a lot better. That's how fast things are moving. So I think that it'll be obviously a bit of a challenge where if everybody starts to look at everybody else's prompts and technologies. And does everything start to look like everything else? I don't necessarily think so, but. But yeah, Yuri's completely right. The technology is moving incredibly quickly.
- [19:31]
Marcus
So, last question for you guys on this. I mean, how important do you think transparency is going to be here? Because this chart on the screen comes from one of our surveys showing that most consumers think that media publications, at least media publications should always cite when AI is used. Over 60% saying yes, always. A further 21 believing that they should. Media companies should say when it's being used for certain types of content. So close to 80 of people saying yes, it is important. Do we think that there'll be a watermark on ads, on content saying this is generated by AI, or do you think people just. Just won't care in the future?
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Yuri Wormser
I don't think people care all that much, honestly. I think that. Yeah, go ahead.
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Jeremy Goldman
Oh, no, I think it's so for the upcoming Fast and the Furious, I don't know, it's like the 19th movie, they are talking about bringing Paul Walker, who died sadly years ago in a car crash, and they're thinking about maybe can they bring him back in some way using old footage or maybe AI or whatever. That's the kind of thing that, yeah, you need to be very transparent about how you're using it. I think the idea that, let's say a journalist or an analyst is using AI to some degree in developing great content. Of course they are, to some degree. Right. I think it's all in the context of how are you doing it? Is it something that could be misconstrued as a deep fake if you're using it in a political ad? So the context really matters, I think, in terms of when people are going to expect disclosures.
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Marcus
Yeah.
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Yuri Wormser
I also think that when something is made without AI will become almost a feature in the sense of, you know, like acoustic music became a thing that, you know, people will want something that is handmade, that is, you know, used, done without AI. But AI is going to be so pervasive that it's going to be the exception. I think that something that doesn't use AI at all.
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Jeremy Goldman
And the perfect example, by the way, Marcus, I always give people, I think Yuri, spot on, is that Google Docs the predictive ability for it to figure out what you're saying next. It's Bedoo doing this since before Google was really talking about AI, consumer facing. At least that's AI, you know, so we've been using AI without disclosing it because we didn't think as much about it. Now this is very much a moment where we're very sensitive to it, understandably, and I think that it's going to really depend on the context. But yeah, everybody's going to be using it. So at some point do you want to see disclosure on everything thing in the world?
- [22:10]
Marcus
They're great takes. I like this line from Rebecca Stewart and Alison Vice Brot of Ad Week writing that whilst marketers and agencies have their eyes on the future, the void between their public optimism and private anxiety is hard to ignore. Some great takes, gents, today. Thank you so much for hanging out with me. Thank you. First to Yuri.
- [22:31]
Yuri Wormser
Glad to be here as always.
- [22:32]
Marcus
And to Jeremy.
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Jeremy Goldman
Yeah, great conversation.
- [22:36]
Marcus
Yes indeed. And thank you to the whole editing crew. And thanks to everyone for listening to behind the Numbers New Market video podcast made possible by Quad. Subscribe Follow Ratings Reviews all the things help more than you know, so please do those Rob will be here tomorrow with the Banking and Payment show, discussing how AI is turning banking upside down.