Meta bets its advertising scale can differentiate new generative AI tools

2023/05/17 Innoverview Read

 Meta Platforms is introducing new advertising products that use artificial intelligence (AI) to help marketers run campaigns more efficiently. The tools, detailed to reporters at Meta’s offices in Manhattan Thursday, show the Facebook and Instagram owner following its tech peers in investing more heavily in AI as the sector hits fresh peaks of hype driven by the popularity of software like ChatGPT. 

While Meta has leveraged AI for years, its latest moves represent a push into the experimental category of generative AI that can quickly produce images and copy that are more convincingly lifelike. Key to this strategy is a new AI Sandbox tool that will initially offer three functions. Billed as a “testing playground” for generative AI, the feature lets advertisers create multiple variations of text copy and generate background images based on text inputs, along with automatically cropping images to best fit different Meta surfaces, like Stories or Reels. 

Executives acknowledged the popularity of rival generative AI products that have already been on the market for months but suggested that the sophistication and scale of Meta’s ad infrastructure could set it apart. AI Sandbox is being trained on Meta’s internal data, along with information from public sources and data that the company licenses. 

“Where we see our unique opportunity is to tightly integrate these features over time into our products, which will allow advertisers to do a number of powerful things,” said John Hegeman, vice president of monetization at Meta, during the event.

AI Sandbox is currently being tried out by a “pretty small” number of advertisers, including the direct-to-consumer cosmetics brand Jones Road Beauty, which was present at the event. Starting in July, availability of AI Sandbox will be expanded. 

“We are using it in our business to write copy, we're using it to help with asset production and ideas,” said Jones Road Beauty CMO Cody Plofker of generative AI. “There's still a long way to go with a lot of the tools, but I'm really excited about the potential ability to produce and create more creative in less time.”

Meta hopes to get buy-in from a diverse range of industry verticals for AI Sandbox, per Hegeman. The executive also indicated that the capabilities could eventually extend into more complex formats like video. Other aspects of the development roadmap seemed contingent on how advertisers respond to the tech.  

“This will be a gradual process where we ramp up to more and more folks over time,” said Hegeman. “The exact timeframe will depend on some of the feedback that we're getting as we continue to evolve and improve the capabilities.”

AI in the spotlight

While AI Sandbox is the flashiest new offering Meta is launching, the company highlighted other AI-powered advertising services. Deeper in the weeds, the firm showed off a system called Meta Lattice that can better predict advertising outcomes and improve optimization without relying on multiple, siloed models, which was common at Meta in the past. 

Meta is also building out its Meta Advantage suite of ad products focused on automation that launched last year. Advantage+ Shopping, the program’s commerce-oriented feature, improves cost-per-action by 17% and return on ad spend by 32% on average, according to slides shared during the presentation. 

“These sorts of results are really leading to higher adoption,” said Nicola Mendelsohn, head of Meta’s global business group. “We're seeing now three times as many advertisers using [Advantage+ shopping campaigns] weekly than just six months ago.”

Within the next month, brands will be able to switch over their manual campaigns to Advantage+ at the click of a button, a bid to spur even more brands to try out the AI tools. Automated reports that compare the outcomes of Advantage+ campaign to manual sales campaigns are in the process of going live as well. 

Meta Advantage is also trying to help advertisers broaden their reach through Advantage+ audiences. Brands can share their target audience suggestions, which Meta’s system scans to see if it can identify people outside of those parameters who are likely to convert. Other AI perks include the ability to make small tweaks to creative, like adjusting the brightness or text placement in an ad, and a method for picking the best videos to display in Catalog ads.

Meta has put AI front and center in recent months, viewing it as a central pillar to growing its TikTok clone Reels and its longer-term metaverse ambitions. Meta’s revenue grew again in the opening stretch of the year after several consecutive quarters of declines, a bump leadership attributed to the new efficiency enabled by AI. One of Meta’s fastest-growing categories is business messaging on platforms like WhatsApp, where the firm has envisioned the potential for future-facing tech like virtual agents. Customer experience is one of the most valued use cases for generative AI among executive leaders, a recent Gartner survey found.  

“We really see that messaging is the next pillar of our business,” said Mendelsohn. “You’re going to see us investing more in this space.”  

Meta’s ad sales have been hampered by a weak economy and ongoing challenges from Apple’s App Tracking Transparency (ATT) that have required fundamental aspects of its infrastructure to be reworked. AI is one of the ways Meta is addressing the headwinds, though Hegeman said AI Sandbox and Advantage+ are not specifically responding to ATT.  

(Copyright: MarketingDive Meta bets its advertising scale can differentiate new generative AI tools | Marketing Dive)