How much AI is too much AI this festive season?

As we enter into the festive season, and brands prepare to roll out ads and campaigns, industry watchers are already on the lookout for what trends will dominate marketing this year. And of course, also how big a role AI will play.

From last year’s celebrated and oft-cited festive ad featuring Shah Rukh Khan by Cadbury to similar tech-driven efforts by other major brands, AI has become part and parcel of the season’s ad campaigns. However, it also begs the question: how much is too much?

As artificial intelligence (AI) revolutionizes the advertising landscape, experts warn of a potential paradox: while AI-driven ads promise increased efficiency and personalization in the short term, they may lead to skyrocketing ad spend in the long run.

The immediate advantages of AI in advertising are clear. Professor Sunil Gupta of Harvard Business School noted in a recent lecture attended by this reporter, “There is a lot of academic research which shows that AI can actually outperform humans and many creative idea generations. And of course, once you have some interesting ideas, you can iterate on them and add some of the human element as well. The personalized promotion through AI can increase revenue, and the click-through rates can also be higher.”

John Paite, Chief Creative Officer at .Monks India, echoes this sentiment, stating that AI has brought the “once elusive 'golden triangle' of faster, better, and cheaper” within reach. This efficiency boost is particularly evident in content creation, which Paite describes as “much easier, faster, and with more finesse than ever before.”

However, as AI-driven ad creation becomes ubiquitous, a new set of challenges emerges. If every company starts producing these ads at scale and personalizing at scale, consumers will be bombarded with ads by every large and small company. Inevitably, their effectiveness will go down because both a startup and a large company can create multiple ads, and it will all be automated.

Sudish Balan, Co-founder and Chief Creative Officer at Tonic Worldwide, concurs, highlighting the risk of user fatigue, especially if the content becomes repetitive, uninspiring, or even offensive. He cautions against an over-reliance on AI, which could lead to “the erosion of creativity, inconsistent brand tone, and the production of content that feels impersonal or disconnected.”

The core paradox is that while the cost of production will go down, the cost of media will go up because the effectiveness will go down as consumers are saturated with umpteen ads.

Gupta drew a parallel with the rise of digital advertising giants. “If you look at the history of what happened with Google and Facebook coming into the marketplace about 15 years ago, the advertising spend in the US in the last 15 years has gone up dramatically. The advertising expenditure in the US has almost doubled from 2017 to 2023. But the population grew by roughly 5% in this time period, while the ad growth is almost double, which means the per capita expenditure has gone up.”

Experts warn that this trend will accelerate with AI, because the production of ads and personalization at scale will be that much easier, which means every company will do it, which means getting impact on the consumers will be that much more difficult.

To address these challenges, experts recommend a nuanced approach that leverages AI's strengths while maintaining human oversight and creativity. Balan advocates for human oversight, careful management through continuous assessment of ads and optimisation to mitigate negative outcomes. He emphasizes the need to “focus on leveraging AI's efficiency in creative development and personalization while balancing it with human-driven strategies for maintaining effectiveness.”

Noting that media budgets almost always go up rather than down, Vincent Kola, Creative Head - Video, SoCheers, points out that in the battle to acquire and engage as many eyes as possible in the market, brands are the aggressors that will not stop trying for sure.

“So, a great way to tackle AI-generated ads and low effectiveness, in my opinion, is to spend more on ‘real’ ads. Old school, classic advertising consisting of great campaigns and brilliant ideas, will always stand out in a market cluttered with artificial garbage. As audiences get more conditioned to AI-generated ads, brands can break algorithms with creative advertising that is human, organic and effective,” he says.

Abhishek Upadhya, SVP of Digital Innovation and Strategy at HiveMinds, observes that AI-driven ads are currently solving largely for pace of execution and scale of operation—the insight behind a creative is still hit or miss. “In situations where it's a miss due to the aforementioned scale, a poorly designed creative reaches a large audience due to the proliferation of AI-led testing on creative variants. It's a purely numerical way of finding creative-market fit without using the required rigour needed to vet a creative,” he observes.

Neha Soman, Co-Founder & CBO of Hypergro AI, stresses the importance of quality over quantity, noting, “To prevent user fatigue, brands must prioritize quality over quantity. Implementing strategies such as diversifying ad formats, utilizing AI user-generated content (UGC), and ensuring relevance through precise targeting can enhance engagement.”

Upadhya also suggests a “Man+Machine model of vetting insightful creatives generated at scale” as a potential solution. He notes that while there may be short-term disruptions, the industry has an excellent course-correcting mechanism when fed with quality directional events.

Kola says there’s a high possibility we might see a spike in ad spends to increase impact. “However, on the flip side, we might also see a slight increase in ad spending from smaller brands with limited budgets, as they aim to leverage AI and other tools to enhance their market presence,” he notes.

As the advertising landscape evolves, brands must adapt their strategies to harness the power of AI while mitigating its potential drawbacks. The experts' consensus is clear: while AI offers unprecedented opportunities for efficiency and personalization, its responsible and creative use will be crucial in navigating the complexities of future advertising ecosystems.