PEARMAN PULSE - JUNE
Pearman Media
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AI……(ARTIFICIAL INVASION??)* ?
We know everywhere you look there is an AI story (possibly written by AI) or an AI conference. We are at the tip of the AI iceberg with probably less than 10% of its capabilities known at this point. AI is best described as machine-generated ‘brainpower’ to fast-track discoveries in the fields of science, technology and medicine that might have taken human minds decades to deliver.
Is it the end of the human race? In a 2014 BBC interview, Stephen Hawking said AI could spell the end of the human race. The man regarded as the “godfather of artificial intelligence”, Professor Geoffrey Hinton, also believes it poses an “extinction-level threat” to humanity. Nonetheless, many are optimistic about AI’s ability to enhance society. Like the introduction of computers and Facebook, it is clear that those who don’t embrace, learn and use AI, risk being left behind in this rapidly evolving landscape.
Is my job safe? With the introduction of computers, there was much fear about job losses where in fact jobs were created. Computers did reduce jobs that possibly were not sort after such as Lift operators, Switchboard operators, Cashiers, Factory workers and Data-entry clerks. The jobs computers created in IT, Software and Tech are enormous. We predict the same thing will happen with AI although we would not recommend starting a career as a Telemarketer, content writer, graphic designer or taxi/Uber driver.? There is an interesting thought that as the Boomer generation exits the workforce there are not enough Gen X?to take their place. Assuming AI will replace some of the more mundane jobs then this will be a good thing. The best way to think of AI is as an Intern. AI will not replace people, it will enhance for many of us, our work, and speed it up massively.
AI programs. The list of AI programs is enormous. We asked ‘Perplexity’ AI for a list of AI programs and were told in 2023 there were around 58,000 AI companies operating globally. The 10 popular programs it gave us included ChatGPT (by OpenAI), Midjourney, DALL-E (by Open AI), Jasper, Grammarly, Copilot, Replika, Synthesia, Lensa, Bing AI (by Microsoft). As you can see, there seems to be an infinite number of AI programs for various functions such as content writing, image generation, grammar checking, coding, conversations, data analysis, pattern recognition, etc. A couple of weeks ago, Open AI announced their latest model named GPT-4. The new model will accept any input; including text, audio, image, or video and can generate output in any form as well. It’s been designed to create more natural human-computer interaction.
AI in advertising. In the advertising sector, AI has been a cornerstone of digital marketing for years. Programmatic advertising is the automated buying and selling of advertising space and is offered on nearly every medium including display, native, video, audio, digital OOH, and TV. Meta (i.e. Facebook and Instagram) has also revealed the rollout of generative AI features for advertisers in Australia and New Zealand. Image Generation and Text Generation will enable users to create variations of images, ad headlines, and text based on their original ad. Meta plans to build this feature into Meta Llama 3, which is their answer to an AI language model. Another example of AI’s impact in media is AdCreative.ai, which is the no. 1 most used AI tool for advertising. For now, these tools still need a person on the other end of the automation to activate these processes.
Copyright issues. Copyright is an ongoing issue for all AI platforms, one which has yet to be addressed by legal systems that are playing catch up. It’s difficult to determine who exactly owns content generated by AI. Is it the user, the AI developer, or the data sources that informed the model? In response, developers are beginning to form partnerships with publishers to use their content. OpenAI recently signed a deal with News Corp to allow it to learn from its content. The New York Times is currently suing OpenAI and Microsoft for copyright infringement, alleging that millions of their articles have been used to train the language learning model. As a result, models like ChatGPT have become competitors to publishers like The New York Times while benefiting from their journalism. Whether you love it or hate it, AI isn’t going anywhere. As Foxtel suggests, we recommend you - Get on Board, Get on Board!
*Note: This piece was not written by AI but did have some AI help. ?
WHAT'S NEW IN MEDIA -? TRUST and DISTRUST
Roy Morgan’s latest quarterly survey of how consumers Trust and Distrust Brands in Australia has just been released. Morgan makes the point that Trust is the underpinning foundation of brand reputation. It creates customer loyalty, promotes advocacy & referrals, enables first-party data collection, and impacts revenue growth and market capitalization.
The value of Trust or Distrust can be clearly seen when looking at Medibank and Qantas. In October 2022 Medibank had a data breach and the level of distrust rose enormously resulting in close to a $2 billion reduction in its market value in one day. Qantas was previously one of Australia’s most trusted brands but is now the country's 3rd most distrusted brand. Distrust has come due to Call Centre delays, cancelled flights, snail-paced refunds and the refusal to pay back any Government welfare over the pandemic. Despite returning to billion-dollar profits in 2023, Qantas market capitalization dropped 35% over the past 12 months. This wiped $3.47 billion off its capital value.
The industries that lost Trust in the Mar24 quarter included Retail, Supermarkets, Insurance, Utilities and Banks. Interestingly, gambling improved although overall it is still distrusted. Maybe that is a case for spending obscene amounts on advertising. Each major brand is ranked and the brands with the biggest increase in consumers trusting them were Cotton On, Nintendo and Youi. Australia’s most trusted brand is Bunnings. Brands that had significant decreases in consumer trust were Coles, Allianz and Woolworths. After 3 years of being Australia’s most trusted brand, Woolworths has dropped 32 rankings. Coles fall from grace is far worse as it spent 3 years being the 2nd most trusted brand and has fallen 221 rankings to now be Australia’s 9th most distrusted brand. The most distrusted brands in Australia are Optus (No.1), Facebook (2) and Qantas (3). The biggest drivers of distrust are huge profits, not putting customers first, and price gouging.
Morgan reminds us of the old Dutch saying that “Trust arrives on foot and leaves on horseback”. ?
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DIGITAL – ALL DSPs ARE NOT EQUAL
WARNING: Plug for Indie Agencies! A benefit for most Independent Agencies is that we are not tied to certain deals that the Multinational agencies may be. One clear example is in the DSP (Demand Side Platform) that we may use. The multi’s tend to have a deal with around one or two and all the buys need to go through these.
DSPs are not all equal and it is important to have the ability to choose the DSP that best suits the brief and objectives. The DSP is the platform between the media agency and the media that the advertising is appearing in. It enables us to activate & analyze the data across every placement where the advertising is appearing and then through ‘bidding technology’ we can move the advertising to deliver the best results.
The two biggest DSPs are DV360 (Google owned) and The Trade Desk (TTD). The difference between these two is that DV360 is effectively a ‘walled garden’ and owns inventory while TTD is an ‘open source’ but does not access YouTube or ‘search intent’ like DV360 can. There are a multitude of DSPs that we can use, and each has a particular inventory (media), tech and measurement that can be exclusive, limiting opportunities when confined to a single platform. Accessing a broader spectrum of inventory and capabilities in line with specific campaign goals, enables brands to achieve scale and performance through diversifying placements.
Running campaigns across multiple DSPs may raise concerns about?duplicating audiences. Whilst duplication is a risk, the benefits of an agnostic tech-stack approach outweigh the potential downside. Various DSPs bring unique algorithms & data points, leading to optimized overall results. Brands can strike a balance by acknowledging the risk of duplication & embracing the broad benefits of accessing or leveraging multiple DSPs. It is important to have flexibility so that we can match the client with the correct DSP. For instance, if ‘Retail’ is the brief then Amazon may complement our primary DSP, while if search intent is vital, DV360 may be used. Some DSPs are also preferred due to their creative execution capabilities.
Having various DSPs to use is not only important to match the campaign brief and objectives but also maintains competition and potentially keeps prices in check. ? ?
SMI UPDATE – APRIL?2024 ?
Apr’24 has been a tough month with a total spend of $629 million and -5.6% compared to the previous April billings. The year-on-year decline sits at -1.8% which does not seem too dire. However, excluding the Covid-affected months of Apr’20 & Apr’21, we need to go back to April 2017 to find an April month that spent less than $630 million. It is getting a great deal harder to forecast anything. Five of the last six months have shown negative growth. Interestingly, Mar’24 was -6.6% when we last reported but the updated Mar’24 which now includes late bookings has it just tipping into positive territory at 0.21%. It is feasible that Apr’24 could be positive (YOY) in the next SMI update.
7 of the top 10 categories declined in YOY spend although the top 5 performed reasonably well helping to stem the decline of the month. The top 5 categories are Retail (-0.9%), Auto Brands (+10.4%), Insurance (-2.1%), Government (+2.1%) and Food (-0.1%). Surprisingly, Gambling decreased -19.6%, Travel was down -15.2% and Restaurants were down -13.6%. The Federal election is due before 24th May 25 and State elections are due for QLD (26th Oct 24) and WA (8th Mar 25).? One thing we can forecast with confidence is that Government spend will at least continue to increase soon. ?
In really big news, for the first time in memory, News Publishing was the only medium to increase spend from Apr23 to Apr 24. News Publishing increased +1.8%. Cinema had a bad month and was down -35.6% and Magazines were not much better at -25.3%. Television was down -9.0%, Radio -3.7% and Digital was -3.5%. Outdoor was the second-best performing medium at -1.5%. ?
FAST FACTS