As an independent ad tech advisor, Ivan provides professional advice to the CEO and C-level management of the company SmartyAds Inc.

Almost all major platforms (Google, Facebook, Amazon) and independent programmatic ones currently employ smart algorithms for ad campaign optimization. Meanwhile, Google recently climbed upon a completely new level of AI implementation in ad tech by introducing generative AI tools that can already replicate the work of professional marketing agencies.

Ad tech giants are trying to outpace each other in the race for product advancements by introducing new predictive, creative-making, and efficiency-raising AI campaign tools. As the AI craze fuels the competition, it raises the bar for everyone in the industry—but what is the future of the independent ad tech sector in this, and is it going to keep up?

AI Advertising: Google And Fast-Growing Tech Take Lead
Some groundbreaking AI-powered advertising tools that Google recently introduced at the Marketing Live event are supposed to bring huge advancements in ad campaign creation and management. For instance:

• AI-powered campaigns in Google (P-Max) will be generated automatically, whereas previously, crafting ad banners or videos was impossible without writers and designers. The algorithms will simply source the advertiser's website and marketing materials to generate customized creative assets that align with specific audiences and campaign objectives.

• AI-powered ads introduce an advanced campaign optimization feature. Google's AI harnesses real-time data to meticulously adjust bids and targeting, enabling advertisers to achieve the highest possible return on their investments.

• As I previously mentioned, Chat GPT in ad tech has huge potential—direct chats and prompts could significantly streamline advertising operations. With Google conversational AI, users can edit and manage campaign creation via chat.

Google is not the only one currently exploring the soil of AI-driven innovations in ad tech. In an effort to attract more clients, the major social media platforms, whose primary source of revenue comes from advertising, are actively pursuing the utilization of cutting-edge automation technologies.

Meta, for instance, introduced a similar solution to Performance Max last year known as Advantage+. Furthermore, the company also plans to incorporate generative AI into its platforms before the end of 2023. As metaverse development is still hanging on the company’s long-term "to-do list," advertising remains among the first priorities. Right now, the company is experimenting with AI chat on WhatsApp, new filters on Instagram and automatic creative resizing for Facebook or Instagram ads.

Another example is WPP, the world's largest advertising agency, which has recently partnered with Nvidia to fully leverage generative artificial intelligence (AI) for advertising purposes. WPP's creative teams will get access to content from Adobe and Getty Images that will enable them to produce large volumes of ad content without using expensive on-location production. Such an AI-powered platform will also enable rapid adaptation of campaigns to different locations and digital channels.

Raising The Bar Of Ad Tech Standards: What Are The Downsides?
According to Google, advertisers that launch AI-driven campaigns typically achieve 18% higher conversions for the same cost per action than those that don't. The experience of IBM with the personalization of creatives with AI delivered stunning results: CTRs for such creatives may soar above 113%, and the campaign's effectiveness increased by 120%.

Driven by the promise of higher efficiency, AI in advertising is rapidly growing—by 2028, the market is expected to reach $107 billion. At the same time, the proliferation of such uber-efficient solutions already raises ethical questions and privacy concerns.

While tech giants are preparing to sue each other over user data misuse, users urge companies to limit the capabilities of their algorithms that reach intimidating levels of personalization.

At the same time, some experts believe that AI technologies will help brands target ads after third-party cookies' demise. Thanks to AI, smart systems can analyze huge amounts of data and find more subtle patterns to make the ads more relevant. For example, AI can divide users into large groups depending on how they react to advertising creatives and then analyze hundreds of thousands of user data parameters to find what affects targeting most.

What About Independent Ad Tech? Is There A Way To Survive?
The first thing that comes to mind is the huge competitive advantage focusing on the hands of tech giants—user data, infrastructure and, finally, talent to build advanced AI models and algorithms that drive better ad targeting and campaign optimization. However, the future of independent ad tech in such realms is not necessarily bleak.

Independent ad tech companies also have a chance to differentiate themselves in this crowded market. For example, ad tech startups like Omneky showcased their capabilities at the TechCrunch Disrupt event last year. Omneky leverages the power of OpenAI's advanced models, like DALLE-2 and GPT-3, to generate ads. Another company, "Movio, backed by prominent investors such as IDG, Sequoia Capital China and Baidu Ventures," is utilizing generative AI to craft captivating marketing videos.

Independent ad tech companies can focus on specific industry verticals or niche markets where they can provide specialized solutions and cater to unique advertising needs. By understanding the nuances of these markets, they can offer tailored solutions that larger platforms may not adequately address.

More so, independent ad tech businesses should leverage their smaller size and greater flexibility to adapt to ever-changing market conditions. They can offer more personalized and attentive customer service, quicker response times, and customized solutions tailored to specific client needs. This agility can be a significant advantage in an over-digitalized market where the value of customer service grows each day.

To Wrap It Up
As big ad tech companies actively embrace extended AI capabilities, we are witnessing a shift in the paradigm of what’s possible and what’s not possible for AI in advertising. From campaign creation to changing targeting mechanisms, AI’s transformative effects have significantly impacted the overall efficiency of ad campaigns and raised the bar of expectations. While it may seem that tech giants have a huge resource advantage in this race, the practice with startups shows that independent ad tech has all chances to embrace the potential of generative AI to create solid and unique value propositions.