Meta, the owner of Facebook, Instagram and WhatsApp, plans to allow advertisers to fully create and target campaigns using artificial intelligence tools by the end of next year. The move has sent shock waves through the traditional marketing industry, posing a direct threat to advertising and media agencies that handle client campaigns and budgets.
The AI tools under development, first reported by the Wall Street Journal, will enable brands to create ads using a product image and a planned marketing spend. The technology will generate the entire advertisement – including imagery, video and text – and target it to users based on factors such as geolocation. For example, a holiday company could tailor offers to users' likely destinations of interest.
Investors reacted swiftly, selling off shares in some of the world's largest marketing services groups on Monday. WPP dropped 3 per cent in early trading, while Publicis Groupe and Havas fell 3.9 per cent and 3 per cent respectively. Meta already generates $160bn (£118bn) annually from advertising, and the AI rollout could significantly swell that revenue.
Meta's chief marketing officer, Alex Schultz, said the company believes in the future of agencies and that AI will allow them to focus on creativity. However, he added that AI tools would help 'level the playing field' for small and medium-sized businesses that cannot afford agency services. 'Millions of small businesses rely upon our platform to grow... that's where AI can help level the playing field,' Schultz said in a LinkedIn post.
Mark Zuckerberg, Meta's chief executive, has referred to the development as 'a redefinition of the category of advertising'. In April, Meta updated its capital expenditure outlook, planning to invest between $64bn and $72bn in 2025, including building out AI infrastructure, up from an earlier forecast of up to $65bn.
