The owner of Facebook and Instagram is to help advertisers to fully create and target campaigns using artificial intelligence tools by the end of next year, in a move that sent shock waves through the traditional marketing industry.
Mark Zuckerberg’s Meta, which also owns WhatsApp, aims to directly target brands’ marketing budgets, posing a threat to the advertising and media agencies that handle client campaigns and budgets.
The AI tools under development, first reported by the Wall Street Journal, will allow brands using Meta’s advertising platform to create ads using a product image and a planned marketing spend.
Meta’s platform already offers some AI tools that allow advertisers to tweak existing ads before they appear on Facebook and Instagram.
However, the new tools could disintermediate the traditional advertising creation, planning and buying roles played by agencies, as well as open up a long tail of advertisers with small budgets that cannot afford to retain marketing services companies.
The AI tools would create the entire ad – including imagery, video and text – and also target it to users in line with a client’s budget.
Targeting such as geolocation would enable an advertisement for a holiday company, for example, to be tailored to offer deals specifically related to users’ likely destinations of interest.
Investors quickly sold off some of the world’s largest marketing services as news of Meta’s planned AI rollout, which could significantly swell the $160bn (£118bn) the company already makes annually from advertising, emerged on Monday.
Shares in WPP dropped 3% in early trading, while the French companies Publicis Groupe and Havas suffered 3.9% and 3% falls respectively.
Zuckerberg, who is heavily focused on driving AI-powered advertising, has referred to the development of new tools as “a redefinition of the category of advertising”.
In April, Meta updated its outlook on spending for the next year with plans to invest between $64bn and $72bn in capital expenditure, including the cost of building out AI infrastructure.
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The company had originally said it expected to spend up to $65bn in 2025.
Meta has said that ramping up its AI capability for brands is not a move to kill off traditional agencies.
“We believe in the future of agencies,” said Alex Schultz, the chief marketing officer and vice-president of analytics at Meta, in a recent post on LinkedIn. “We believe AI will enable agencies and advertisers to focus precious time and resources on the creativity that matters. While we think there will ultimately be more automation in marketing, the role that agencies play is going to become ever more important through their ability to plan, execute and measure across platforms.”
However, Schultz added that AI tools would help “level the playing field” for small and medium-sized businesses that do not have the time or financial scale to use agencies.
“Millions of small businesses rely upon our platform to grow,” he said. “For these businesses who aren’t able to work with an agency, or don’t have time during their busy days to think about their creative or targeting, that’s where AI can help level the playing field.”
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