I still believe efficiency can impact spend on advertising but it may lead to a lower percent of GDP. It doesn’t appear to me that advertising inefficiency is the fault of bad tech or bad media, rather it is bad actors. New tech invites new forms of fraud. Maybe AI solves for fraud, but what seems more likely is that it will introduce new forms of fraud as it solves for the old ones. But if advertising does somehow get more efficient, it gives brands and agencies reasons to spend less (until media pricing catches up, at least). And, following the model you laid out, I could imagine retail stealing that share.
Another potential ad spend lift might be that AI essentially enables a million businesses to be generated using generative training and agents, but without developing brands none of them will win - this is likely to be true in DTC digital services for sure
Insightful… could maybe argue that over the last twenty years the same bundling effect has happened as search spend went from discretionary demand generation to including defensive spend on brand terms (essentially spend on navigation) and social media integrated PR spending..
Thank you Myles. Well done.
I still believe efficiency can impact spend on advertising but it may lead to a lower percent of GDP. It doesn’t appear to me that advertising inefficiency is the fault of bad tech or bad media, rather it is bad actors. New tech invites new forms of fraud. Maybe AI solves for fraud, but what seems more likely is that it will introduce new forms of fraud as it solves for the old ones. But if advertising does somehow get more efficient, it gives brands and agencies reasons to spend less (until media pricing catches up, at least). And, following the model you laid out, I could imagine retail stealing that share.
Another potential ad spend lift might be that AI essentially enables a million businesses to be generated using generative training and agents, but without developing brands none of them will win - this is likely to be true in DTC digital services for sure
Insightful… could maybe argue that over the last twenty years the same bundling effect has happened as search spend went from discretionary demand generation to including defensive spend on brand terms (essentially spend on navigation) and social media integrated PR spending..