Advertisers embrace AI for video, but demand sales, not just views: IAB

Advertisers are rapidly adopting Generative AI to create video ads, with half already using the tech, but the focus has pivoted from creative novelty to a strict demand for measurable business outcomes like sales and store visits, according to a new report from the IAB.

The new creative director: The adoption of AI in advertising is accelerating, with nearly 90% of buyers now using or planning to use GenAI for ad creative. This tech is leveling the playing field, with IAB CEO David Cohen noting, “The democratization of advertising and marketing is entering an exciting new phase,” as smaller businesses can now produce high-quality video at scale.

Results or else: The era of chasing vanity metrics is over. The most important KPI for video advertisers is now tangible performance that drives direct sales and in-person store visits. According to the report, failure to deliver on these outcomes is now the number one reason advertisers walk away from a streaming partner.

Humans still wanted: While ad dollars pour into CTV and buyers expect nearly half of its inventory to be automated, it’s not a fully hands-off future. More than 80% of digital video buyers still want human assistance from their partners to navigate the complexities of programmatic CTV ad campaigns.

The new contract: The message from advertisers is clear: while AI makes creating ads easier and cheaper, the bar for performance has been raised. The platforms that can prove they drive real-world business results will win, while those who can’t will be cut.

Beyond the ad buy: Meanwhile, the industry is also grappling with how AI models scrape publisher content without fair compensation, prompting new initiatives for monetization. At the same time, the technical plumbing of advertising is getting an overhaul to dramatically speed up programmatic ad transactions.

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