How AI/ML is Revolutionizing the Ad Business for TV, CTV, and Digital Outlets

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In this special guest feature, Alex Persky-Stern, CEO of Waymark, discusses how AI is opening a path to offset a number of challenges faced by media companies – especially in the local advertiser market. Waymark is using creative AI to make professional video production easier than it’s ever been. The tech startup has combined breakthrough generative models to become the first natural-language video creation platform. With their tool, anyone who can type basic instructions can produce ready-to-air commercials fit for TV, CTV, and digital.

It’s a hard time to be in media. In recent weeks, Warner Bros. Discovery, Paramount Global, Comcast, Gannet and Vice Media have all slashed their workforces. Disney, Roku, and AMC Networks have announced that they plan to do the same. 

Bracing for the worst makes sense. Media companies face high inflation, slow ad revenue growth, and a tough economic outlook. At the same time, many are scrambling to keep up as they manage the decline of linear viewership and mass consumer adoption of streaming services. 

However, there are bright spots ahead, and AI is opening a path to offset some of these challenges – especially in the local advertiser market.

Local Advertisers as Growth Levers

Despite the widespread uncertainty and grim austerity measures, not all of the news is bad. As an Axios report points out, “the [ad] market is still growing, it’s just growing slower compared to the historical highs of 2021.” The pivot to streaming will also pay off: it’s expected that $19 billion will be spent on CTV ads by the end 2022. 

What’s more, it seems that these seismic shifts have opened up an unlikely revenue base: local business. Local businesses have emerged as perhaps surprisingly enthusiastic adopters of streaming ad space. According to a Borrell Benchmarking Report, local digital ad spend will hit $92 billion by 2025. In that same report, almost 20% of media companies surveyed indicated that video streaming had already become their top selling digital product to local advertisers. 

This trend makes sense: local businesses tend to be small to medium sized businesses (SMBs), with smaller ad budgets. They have always needed to focus on methods that offer high ROI, and hyper-targeted audiences: streaming offers this to them. The challenge for many media companies is to recruit untapped SMB advertisers to their AVOD platforms before their competitors do.

Leveraging Artificial Intelligence and Machine Learning (AI/ML)

Fortunately, AI/ML models are already positioned as powerful allies. They offer opportunities to cut costs, remove friction from the ad sales market, and offer incredible ROI through hyper-targeted content:

Audience Segmentation

Segmentation is standard practice in the advertising world. It involves dividing an audience into specific subgroups, based on shared characteristics like age range, income level, education level, interests, etc. This allows for sharper personalization of ad content, and placements in front of audiences who are more receptive to it. 

When run by humans, these sub-groups tend to stay fairly generic, and are comparatively broader. However, when machine learning is applied, segmentation can be done at both scale and speed to reveal far more granular insights in a fraction of the time. This immediately lays the groundwork for far more sophisticated targeting strategy that offers an appealingly robust ROI for local businesses. 

Evolving the Ad Sales Market

For a long time, TV ad sales were an intensely manual process. They involved a marketing representative negotiating with a media account executive based on a predetermined price structure and inflexible ad placements ahead of time. 

The industry has since embraced programmatic advertising, which offers marketers real-time bidding and algorithmically adjusted ad placements. This is an ideal environment for AI, which has the capacity to learn and adapt to information in real time. Because of AI’s ability to handle massive quantities of information in seconds, marketers can identify targets at scale, optimize campaigns in real time, and boost their chances of hitting their sales goals.

Content Creation

Generative AI has seen some of the biggest advances in recent months. In 2022, we unlocked the ability to create natural language text, audio, and visuals from very basic inputs. 

It goes without saying that this is a game changer for quality content creation, which has historically been prohibitively expensive for local businesses. The smartest providers will use these possibilities to their advantage and offer support in creative capacity and generation. In doing so, they will be able to overcome one of the biggest hurdles for the SMB market.

Media companies across the board are learning that they will need to take decisive action to weather the economic headwinds facing their industry. By seizing on the joint opportunity presented by emerging technologies and nascent SMB advertising interest, they increase the odds of positioning themselves as winners in 2023.

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