Navigating the AI Hype: Key Trends and Strategies for Brands and Advertisers
In the fast-evolving world of commerce media, the integration of artificial intelligence (AI) is now more than just a trend—it’s a necessity. As AI permeates every facet of the ecommerce ecosystem and the FOMO accelerates, companies that may have just barely completed their digital transformation face the need for an AI transformation that can present as many challenges as opportunities. And the FOMO is founded – already, many AI models have been infused into the product roadmaps of many big, influential companies in any industry you can think of. This means the biggest players, like the Instacarts, Amazons and Walmarts of the world, have a big lead in leveraging AI for commerce and retail media.
After nearly 20 years at Microsoft and working globally to bring AI products to market, I am struck by how critical it is right now for all brands to cut through the noise and determine exactly where and how they should be leveraging AI in their marketing mix. Over the past year, AI has quickly become table stakes in order to stay competitive beside companies you know are already investing heavily in AI.
In this article, we’ll cut through the noise to delve into some truly important trends that brands will benefit from understanding right now.
A New Boom
2024 marks the onset of a big surge in AI capabilities, especially for commerce and advertising. With advancements in automated content understanding, creative generation, hyper-personalization and marketing efficiency, a huge new wave of technology startups is emerging.
Investments toward AI ventures increased eightfold from 2022 to total approximately 25 billion by the end of 2023.
TechCrunch
Y-Combinator’s winter 2024 cohort was at least 50% AI startups, according to a note from President Garry Tan. These startups are vying to create generative and predictive AI solutions that will solve for commerce media challenges and inefficiencies, quickly imparting a competitive advantage for brands that are paying attention.
For brands and advertisers, the AI journey should begin with plugging in and keeping track of news around the development of AI tools in order to stay technologically relevant and agile in marketing strategies. Here are a few must-know developments and use cases that should be on the radar for brands and advertisers:
Spotlight on Multimodal Generative AI
As AI adoption expands and an increasing number of companies put out competing large language models (LLMs) and open-source agent frameworks, we will see a rapid evolution of LLM capabilities, and a shift to prioritize multimodal generative models, or gen AI that can process multiple types of data (text, image, video) at the same time for more nuanced understanding, evaluation and generation. Brands and retailers need to stay in the know about these advancements in order to identify the latest and best tools to streamline operations, speed up data-driven decision-making and remain competitive. Winners will emerge as those who adeptly incorporate AI innovations into their strategies, stay agile and iterate on the fly.
Co-Pilots as Key Business Tools
As AI-driven data processing proliferates throughout all the major platforms we use, the need to get answers and iterate fast will make AI-based copilots indispensable for brand marketers. These tools empower companies to extract insights rapidly, optimize spend and navigate the dynamic landscape of commerce with the ability to surface insights and make changes moment-to-moment. In a market that evolves at high speeds, AI co-pilots can process all the available data across your entire stack at any given moment and make recommendations that enable companies to make informed decisions with agility. Be on the lookout for solutions that offer a co-pilot and ask lots of questions about its data query and output capabilities to make sure it can surface the types of insights that help your product and marketing teams make timely decisions that move the needle.
Semantic Search and Chat Commerce Interface
The advent of AI-powered semantic search (search that imbues meaning or intent into keywords and phrases) represents a paradigm shift in how consumers find products, and therefore how brands connect with customers. An example is the ability to search birthday party on a retailer’s website, and get a grouping of results that includes all the items typically associated with this kind of fete, including games, supplies and decorations, as well as cake and snacks. Results might even include retargeting if the retailer has strong first-party or loyalty program data.
As consumers gain more experience with AI and realize that it makes search more productive and enjoyable, this will drive adoption among retailers and D2C websites. Retail giants like Walmart and Instacart are already leading the charge, offering AI-powered semantic search capabilities that streamline the shopping experience and make tasks like recipe building a snap.
While AI-driven search gains in popularity, retailers will have to adapt their monetization models accordingly. This will mean some back-end transformation to accommodate the new monetization models. Marketers should expect keyword games to be less impactful. Adding more detail to product descriptions about things like specific use cases could make a product detail page perform better in an AI product recommendation chat.
The takeaway for brand marketers and digital shelf decision-makers is that keyword intent and product tag strategies will have to be evaluated in light of this new AI-based query capability to ensure search remains an effective channel. Brands that adjust spend and start leveraging AI this year will be able to keep the competitive edge in traffic and conversion, perhaps even get ahead of the competition.
Ready or not, the integration of AI into commerce is reshaping the industry landscape, presenting both challenges and opportunities for brands. By tuning out irrelevant noise, staying abreast of key trends and leveraging emerging AI tools effectively, brands can not only adapt to the evolving market dynamics but also gain a competitive edge in an increasingly AI-driven ecosystem. As we ride the AI wave past the hype, the ability to adapt your martech mix and iterate swiftly will be paramount in driving success in commerce.
