Advertising is on the brink of a transformative change due to the rise of generative Artificial Intelligence (AI), creating a window for businesses to reevaluate their models and shift towards value-based pricing. The application of generative AI allows firms to construct bespoke advertisements that resonate profoundly with the target market, driving marketing success.
Embracing AI, particularly generative AI, has become a new focal point for the advertising industry. This impressive technique can generate new content and ideas, stream processes, and enhance creativity. It also enables real-time adaptability of ads based on customer interactions, heralding a new era of productive, customer-centric advertising.
Statistics predict an enormous contribution from AI in advertising by 2024, with it accounting for 90% of all advertising revenue, amounting to over $1.3 trillion. Rather than just automating tasks, AI’s role will extend to enhancing human abilities and competencies in the advertising sector.
Using value-based pricing
The emergence of AI coincides with the shift towards value-based pricing, which emphasizes the results delivered to an advertiser. Integrating AI into this new pricing methodology marks the beginning of a change in the business landscape towards value rather than hours worked or projects completed.
However, transitioning to a value-based pricing model requires improved creativity, strategy, emotional intelligence, and cultural awareness – areas where machines currently fall short. Significant investment in research and development and professional training should overcome these challenges, potentially revolutionizing the industry.
Agencies adopting an AI-dependent value-based pricing system should start small, test rigorously, and use setbacks as learning opportunities. Success hinges on aligning products and services with genuine customer value and needs rather than leveraging technology hype. Building enduring relationships with tech vendors can also provide the additional expertise to maximize the potential of AI in value-based pricing.
While generative AI is still emerging, its incorporation offers a turning point for the advertising industry. Generative AI can streamline procedures and build hyper-personalised campaigns that resonate strongly with audiences. Blending this innovative technology with traditional strategies can unlock a new, impactful level of relevancy in advertising, potentially redefining the industry’s future trajectory.
