RESEARCH REPORT
Our research reveals how gen AI can enable ad platforms to capture more of the $750 billion digital advertising opportunity—and give advertisers the return they need.
9-MINUTE READ
December 12, 2024
Advertising’s automation era is driving a heated AI battle among ad platforms. The key to winning the execution game, now and over the longer term? Using generative AI tools more strategically and keeping their eye on ad buyers’ ultimate prize: return on ad spend (ROAS).
Just as high-frequency trading changed the stock market over 25 years ago, AI powered algorithms’ are reinventing the digital advertising value chain today. This is creating a paradigm shift in this global market. Almost 70% of advertising is now AI-enabled, and by 2029, that figure is expected to exceed 94%.1 This change is increasing the dynamic flow of advertising dollars, as programmatic trading in digital media has enabled real-time budget reallocation across the globe.
More than half of ad buyers shift ad spend from one platform to another every 30 days or less. That translates to about $35 billion in global ad spend being re-evaluated and re-deployed each month.
So how can platforms better attract and retain ad buyers amid increased platform proliferation with more new entrants growing and launching every few months? This is happening across retail (think Walmart Connect and Instacart), finance (PayPal, Intuit and Klarna) and travel (Expedia and Uber).
To find out, we asked the buyers themselves. Specifically, we surveyed 1,200 ad buyers across four key markets (United States, United Kingdom, Germany and Australia). We took a close look at their interests, intents, expectations and challenges to further investigate how platforms can navigate this rapidly changing landscape.
Figure 1
Their answers distill into three strategic imperatives. Each can improve a platform’s performance. Together, they can help ad platforms stand out in the crowd, secure an optimal place on buyers’ media plans and deliver on shareholders' expectations.
They are:
1) Focus on reducing ‘friction’ across the advertisers’ experience while accelerating gen AI adoption;
2) Redesign the role of the sales representative to help salespeople and teams become “sales savants”—the ultimate trusted advisors for ad buyers; and
3) Tailor go-to-market (GTM) plans for large, medium and small advertisers, to deliver more relevant ad products, sales enablement materials and customer support.
To understand why these three actions are imperative, put yourself in the ad buyers’ shoes and start with their own forays into gen AI-powered tools. A significant majority of ad buyers (85%) told us that they are already experimenting with or scaling gen AI for their marketing workflows internally as it is seen as a ‘force multiplier’ (See figure 2). On average, they say they’re ready to fully automate over 30% of their workflows across the entire process (See figure 3).
Figure 2
Figure 3
And as ad platforms launch a constant stream of gen AI-powered tools and tech stack features for buyers’ use, they’re saying “Bring it on!” Almost three-quarters of our respondents (73%) think their teams have the necessary skills to incorporate the barrage of new ad platform offerings into their workflows. They are eager to embrace what the technology platforms are serving up to drive marketing ROI, team productivity and lower their ‘cost to serve’ in an environment of continued headcount restraint and margin pressure.
It’s easier than ever for businesses of any size, and even creators and micro-influencers, to streamline their work, tailor their ads more precisely than ever and reach new customers. This was illustrated in our recent Life Trends report that examined the “Impatience Economy” trend, where 63% of consumers get inspiration from social media on how to do things smarter. This further underscores the need for platforms to broaden partnerships and ecosystems for their ad buyers to play a larger role in people’s lives.
But are they getting the return on ad spend (ROAS) they ultimately need?
This is where imperatives can make a meaningful difference. Each is good practice on its own. Together, this trio drives successful distinction, competitive advantage and endurance.
Most gen AI applications target creative workflow automation: copy, images, video, audio. That’s valuable, as creating content can be the largest barrier to campaign activation. Nearly two out of three ad buyers (65%) say content development and production is the most challenging and time-consuming in the entire process (See figure 4).
But platforms can’t stop there. What’s needed is a vision for how gen AI tools—including autonomous assistants, or voice-activated “agents”—can help platforms transform the entire ad buyer journey to boost their ROAS. This AI-enabled approach will:
Our research supports this vision. For example, 55% of ad buyers cite communications strategy and market research—often one of the first stages of campaign planning—as a major time and logistical challenge (See figure 4). They are struggling to answer basic questions fast, such as “What is my ideal customer profile? Where can I best reach my core target? And how can I influence their behavior in the right way?”
Figure 4
There is also a huge opportunity for ad platforms to enter at the earlier planning stages of the ad buy, helping clients better craft their campaign strategies and design effective differentiated global activation plans. For example, platforms can use gen AI to quickly garner insights from structured, unstructured and synthetic data to create richer personas and identify more nuanced behavioral patterns that lead to smarter predictive customer insights. These can drive new campaign ideas at an accelerated cycle speed and at greater scale, raising ad performance and ROI to new levels focused on ‘cost-per-result.'
Today, AI agents, empowered with reasoning, can distill, analyze and interpret multiple data sets and on/offline signals across multiple enterprise sources and return valuable, proprietary insights in a matter of minutes. Using those ‘unified’ signals, along with systematic AI-driven simulations, a platform can now complete audience segmentation tasks and multi-variant testing exercises in minutes rather than days—and provide richer propensity, demographic, lifestyle and behavioral insights to advertisers at the click of a button.
Most ad buyers (80%) said they would spend more of their budget on an ad platform that has the right gen AI capabilities to meet their needs. (See figure 5.) Honing these abilities while embracing responsible and ethical AI protocols and guardrails, is how ad platforms can overdeliver and drive a key growth metric: average revenue per advertiser (ARPA).
Figure 5
Even in today’s programmatic, self-serve, algorithm-fueled market, decisions about digital ad budgets are heavily influenced by the platform rep or salesperson. Getting the human to machine ratio right has never been more critical. Despite an appetite to automate their workflows, we found that advertisers are in no way interested in replacing their ad sales reps with gen AI agents. In fact, about 9 in 10 ad buyers say they value their interactions with their sales reps, and more than half (55%) say they want more interaction with their reps going forward (See below for more detail).
Even with automation increasing, ad buyers value their sales representatives:
86%
say their reps provide valuable and differentiated audience insights
85%
say their reps are well-versed in how gen AI can improve their campaigns
83%
say their reps deeply understand their business, brand, and/or industry
If reps proved valuable before, now it's time to make them invaluable. Platform leaders shouldn’t underestimate the power of the human quotient in the advertising ’value exchange’ equation. In fact, platforms’ salesforce is at the center of ad platform reinvention. Their people, supported by gen AI tools, will have a deep, full-funnel perspective of the buyer’s experience. That, coupled with an understanding of how the platform can amplify a brand’s DNA and a product’s unique selling position, will transform a sales rep into the ultimate trusted advisor to their clients. As a result, they will be able to make more strategic ad deals on an ecosystem level and sustain longer-term relationships, which will pay dividends year after year.
What’s the best path there? It starts with perfecting the transition from machine to virtuoso in the art of driving marketing performance on their platform.
The words describing tomorrow´s sales savants will include "intuitive" and "great communicators."
Critically, they´ll also include:
Product savvy, AI and machine learning literate, data clean-room fluent, and API knowledgeable.
Then it’s about continuous training and motivation—adapting as tech needs evolve. Platform leaders will need sales reps who can easily turn a complex brand brief into a well-architected and highly effective ‘multi-modal’ activation strategy. By embedding the right gen AI tools, leaders can power their reps to develop the best advertiser solutions, with intimate knowledge of product, sector, audience graphs and algorithms. By training their reps to work effectively with these tools, including AI agents, they will enable a new level of detailed, tailored and trusted customer advice, brand activation, privacy compliance support and risk mitigation.
And by teaching reps to create easily interoperable system architectures with advertisers and their partners, the platform’s AI tech stack can deliver to its full potential.
No two advertisers have the same monetization needs. Enterprise clients and agency holding companies, for example, are likely to seek white-glove care and account-based marketing (ABM) level attention, improved partner programs with advanced training and certification and access to unique platform inventory solutions. Small and medium-sized businesses will want better self-serve products that provide easy customer relationship management (CRM) activation, one-click dynamic content delivery and even legal and financial assistance. Macro and micro influencers and creators will need fast campaign ‘go-live’ set-ups, shoppable streaming options, effective brand matching, campaign activation, and merchandise supply chain support.
Platforms should heed their customers’ needs and offer services that deliver on their ROAS. For example, they may rethink:
Platforms can also help advertisers create better linkages between their campaign activity and their product inventory and supply chain management processes. This would provide a much more holistic approach to full-funnel brand activation —and better ROAS.
It’s a big ask, but one well worth the effort—for both platforms and advertisers—when the global ad market exceeds $1 trillion next year. This may be a once-in-a-career opportunity to bust legacy rules and traditional thinking, brainstorm a fresh, more agile and dynamic approach and write a new playbook to meet new performance levels.
The old ad sales script is exactly that: old. With $750 billion in digital ad spend changing hands at the speed of thought, the competitive edge will go to platforms that drive clear, measurable and high touch value for advertisers. Success will no longer be measured by proxy media metrics such as click-through rates, shares and views, but by actual dollars returned. Marketing, long considered a cost center, is now a key performance lever and a powerful enabler of a purpose-driven enterprise.
Platforms using and scaling AI and agentic computing are delivering better results for advertisers. Investing in AI and quickly integrating it to improve ROAS and buyer experiences can be transformative.
Learn how Uber and e-commerce leaders are addressing the new advertising landscape with Accenture´s help.
1GroupM 2024 Global Midyear Advertising Forecast
