Toby Tam.
Australia’s advertising recession is shaking the foundations of marketing.
Budgets are shrinking, and the once-reliable pillars of marketing, martech, agencies, and labour are feeling the pinch (don’t believe me? See the data). CMOs are reallocating budgets to prioritize paid media spending while cutting back on investments in martech, agency services, and internal teams. But these shifts come with undeniable consequences:
Tighter team resourcing: Teams are stretched thin, leading to faster burnout and critical skill shortages.
Shorter project timelines: Time constraints diminish the strategic and creative depth of campaigns.
Short-term focus: With an eye on immediate results, long-term gains and competitive advantages are sacrificed.
So in an era where marketers are asked to do more and more, with much less and less, how can we cope?
AI as the Productivity Multiplier
Enter AI: not the shiny new tool of the future, but a powerful ally to marketers of the present.
Now, let me be clear: AI is not a magic solution that will whisk away all your problems. It’s widely understood that large language models (LLMs) like ChatGPT don’t “understand” knowledge; rather, they excel at predicting what answers should look like.
AI, however, has its limitations:
Outdated Training Data: OpenAI's GPT-4 is trained periodically, with the latest training data extending only up to April 2023. This periodic update cycle means they cannot incorporate real-time changes in platforms or shifts in consumer behavior, limiting their ability to provide fully current insights.
Restricted Contextual Understanding: Without access to real-time information or proprietary tools, AI struggles to capture the nuanced complexities of localized strategies, resulting in broad recommendations often perceived as "generic."
Risk of Misinformation (Hallucination): Given these limitations, AI models may occasionally "hallucinate" by presenting inaccurate or fabricated information with confidence. For instance, they might reference outdated Google Ads features or nonexistent targeting options on Meta platforms. Such inaccuracies pose risks for media strategy and decision-making. A study by BCG and Harvard Business School found that unchecked reliance on AI tools for business problem-solving could decrease output by 23% compared to teams that did not use AI.
However, in an environment where teams are shrinking and turnaround times are becoming more demanding, AI can step in to automate routine tasks and free up time for high-value, strategic work. For instance, AI-powered tools can:
Streamline data analysis: Sifting through mountains of marketing data is time-consuming and prone to human error. AI can identify actionable insights quickly, allowing marketers to focus on what really matters.
Accelerate creative processes: Need campaign copy or audience-specific messaging? Generative AI can draft options in minutes, which can then be refined by human expertise. This case study by Monks shows them halving design & production hours whilst improving cost-per-purchase by 31% by integrating AI into their production workflow.
Improve media buying efficiency: AI tools optimize ad placements and budget allocations in real-time, ensuring every dollar spent works harder. Platforms like Meta and Google have long since introduced tools like PMAX and Advantage+ into their buying platforms to maximise ad platform efficiencies.
Balancing the Short and Long-Term
A large part of the marketing budget reallocation has been the overemphasis on maintaining market share provided by short-term paid media gains. AI can help balance this equation by:
Personalization at scale: AI-driven personalization creates deeper connections with audiences, fostering loyalty and improving long-term customer lifetime value. Platforms like TikTok have become media giants through their AI powered “For You Feeds” tailored to users.
Scenario modeling: Advanced AI models can simulate campaign outcomes, empowering marketers in the AUNZ market to make smarter investment decisions for immediate ROI and long-term growth. Acting as a simplified MMM tool, helping to pinpoint things like whether it was your investment in 9News or DOOH that drove brand consideration, ensuring every dollar works harder.
Trend Spotting: AI’s ability to forecast and identify trends enables marketing strategies to stay ahead of evolving consumer demands, safeguarding long-term relevance. By integrating AI APIs with RAG models connected to AUNZ-specific consumer data, brands can unlock timely, localized insights to shape strategies that resonate deeply with their target audiences.
The Role of Marketers in an AI-Driven World
AI is only as powerful as those who use it (think when the internet or social media was first introduced into the scene). To thrive in this AI-enhanced landscape, marketers need to shift their roles and become:
Strategic Cultivators: Marketers should act as directors, guiding AI tools with their industry expertise to ensure outputs align with brand objectives and resonate with audiences.
Data Stewards: By leveraging secure AI environments, marketers can integrate proprietary data for richer, more accurate insights while maintaining data privacy.
Future Thinkers: Embrace RAG models by integrating AI with datasets like Roy Morgan, Nielsen, or Australian government data (if you’re getting creative) to uncover emerging trends and stay ahead of market shifts.
Australia’s advertising recession presents challenges, but also opportunities for innovation. AI is not just a buzzword; it’s a practical, scalable solution to many of the issues marketers face today.
Think of AI as the unpaid intern with limitless energy, ready to take on repetitive tasks, distill data, and spark ideas to free up your team to focus on strategy and creativity. By pairing AI’s capabilities with human expertise, marketers can maintain (or even elevate) the quality of their work despite shrinking budgets and resources.
I’m not saying it's right, but it is the reality we face. So how do we plan on thriving in the next decade?
Toby Tam, Media Strategist and Planner, APAC at Monks