How AI is disrupting the advertising industry

Artificial intelligence is shaking advertising businesses and “feels uneasy” investors, an industry leader told CNBC.

“This AI disruption… denies investors from all industries, and it completely disrupts our business,” said Mark Reid, retired CEO of UK Ad Group. WPPtold CNBC’s Karen Tso on Tuesday.

The advertising market is under threat from emerging generation AI tools that can be used to deliver content at a rapid pace. Over the past few years, many AI image generators have emerged, including Openai’s Dall-E, Google’s Veo, and Midjourney.

In his first interview since he announced he was resigning as WPP boss, Reid said that AI “will be completely revolutionizing our business.”

“AI plans to make all world expertise available to everyone at a very low cost,” he said at London Tech Week. “The best lawyers, the best psychologists, the best radiologists, the best accountants, and in fact, the best advertising creatives and marketers often become AI.

Reed says that 50,000 WPP employees are currently using the company’s own AI-powered marketing platform, WPP Open.

“I think that’s my legacy in many ways,” he added.

He read that structural pressure on the creative side of the advertising business is driving industry integration, adding that companies need to “accept” the way AI impacts everything, from creating briefs and media plans to optimizing campaigns.

A Forrester report released last June shows that over 60% of US advertising agencies already use generated AI, with an additional 31% saying they are investigating technology use cases.

This view is not just about reading. AI is undergoing a “major transformation” due to the disruptive impact of French advertising giants Publicis Groupe’s CEO Maurice Levy told CNBC at the Viva Tech Conference in Paris.

He said that while AI image and video generation tools have significantly accelerated content production, automated messaging systems now allow for “personalization at scale, as ever.”

However, the Publicis chief emphasized that AI should be viewed as only tools people can use to expand their lives.

“Don’t believe that AI is more than a tool,” he added.

And while AI can affect some jobs, Levy believes it will eventually create more roles than it destroys.

“AI will replace me and AI will kill some jobs? AI, yes, I think it will destroy some jobs,” admitted Levy. But he added, “More importantly, AI will transform jobs and create more jobs. So the net balance will probably be a positive.”

This is in line with the impact on the labor of previous technical inventions such as the Internet and smartphones, he says.

“There’s going to be more autonomous work,” Levy added.

Still, Gartner analyst Nicole Denman Green should warn that brands should warn them of causing negative reactions from consumers who are skeptical of AI’s impact on human creativity.

According to a Gartner survey in September, 82% of consumers said companies using generated AI should prioritize maintaining human jobs, even if it means lower profits.

“From what AI can do, it’s a pivot to what it needs to do in advertising,” Green told CNBC.

“What it should do will help create groundbreaking insights, unique executions to reach diverse and niche audiences, push boundaries about what ‘marketing’ is, and provide a more differentiated, relevant personal experience for the brand, including the promise of hyper-per-sauration. ”