Artificial intelligence (AI) continues to revolutionise numerous industries, and the realm of advertising is no different. Recent data from MediaRadar indicates a sharp rise in AI advertising expenditure over the last two years.
Todd Krizelman, the CEO of MediaRadar, provided insights through a LinkedIn video, highlighting the introduction of 54 advertisers in Q3 alone that had not been previously observed. He stated, “There are 54 of the advertisers running in Q3 so far that are totally new. We haven’t seen them running and that just reflects there’s so much new funding around AI.” This expert view underscores the rapid acceleration of AI advertising and offers a comprehensive view of the current AI advertising scenario.
Detailed Breakdown of AI Advertising Spend
From January 2022 to August 2023, MediaRadar’s data on AI advertising spend sheds light on the amount invested, the leading companies in AI advertising, and the distribution of expenditure across various media channels such as TV, print, digital, and events.
Growth in AI Advertising Expenditure The investment in AI advertising has seen a substantial rise. Since January 2022, over $21 million has been spent on advertising AI products by 270 companies across various platforms including national TV, print, and digital. From January to August 2023, over $9 million has been spent, marking a 9% increase from the $8.3 million in the same timeframe the previous year.
Dominance of Digital AI Ads Of the total $10.7 million AI ad spend this year, including significant events, digital advertising constitutes $6.2 million or 58% of the overall spend. In terms of digital expenditure, display and paid social command the largest portions with $2.3 million and $2.2 million respectively.
Recent Trends in AI Advertising
Surge in Q3 2023 Investments There’s been a notable uptick in recent months. In Q3 2023 (spanning June to August), close to $6.8 million was spent on AI advertising, marking a significant 60% rise from the $4.2 million in Q3 2022.
Increase in AI Advertisers The summer of 2023 saw an 87% increase in the number of AI advertisers, with 120 AI brands investing in advertising. This is a stark rise from the 70 AI advertisers in the summer of 2022.
AI Advertising Budget Analysis
Companies spending more than $100,000 dominate AI advertising. While 93% of the 192 AI advertisers spent under $100k in 2023, amounting to a total of $2 million, the 7% investing over $100,000 contributed to $7 million of the expenditure.
Leading Brands in AI Advertising MediaRadar identified several brands leading AI advertising in Q3 2023, including IBM (with IBM Watson), Dialpad, Salesforce (featuring Slack GPT), and YourHana.AI. IBM, having realised AI’s potential as early as 2006, continues to be a market leader with Watson. Their investment patterns have shaped the AI industry’s growth trajectory, with many other companies following suit.
Prospects of AI Advertising
In conclusion, MediaRadar’s findings suggest that AI advertising is on a growth trajectory, with an increasing number of brands allocating larger budgets towards AI-focused products and services. While digital channels are the primary mode of advertising, TV and print maintain their relevance. Predictions indicate that the momentum in AI advertising investment is likely to surge in the coming years.
Brands aiming to capitalise on AI’s dominance should observe and learn from the leading brands already executing innovative campaigns. The present moment offers a prime opportunity for brands to establish their foothold in the rapidly evolving AI advertising landscape.
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