Imagine new artificial intelligence (AI)-assisted ads where consumers talk directly to have a text-based conversation within the ad space.
GMS, a longtime AI-communications company based in Switzerland, has seen the future, and it is something called Generative Response Ads. The concept is simple but powerful: Consumers engage in dynamic two-way dialogue with brands via a brand-specific AI model.
“Advertising has historically been one-way. We are laying the groundwork for a new era of interactive advertising and engagement that preserves the customer’s anonymity,” Marina Petrova, head of GenAI business at GMS, said in an interview. “This is redefining how advertising works. Buyers ask and receive real-time answers. The one comparison I can make is to the debut of the first banner ad 30 years ago by AT&T.”
The format evolves beyond static displays and comes at a crucial time – a record holiday season — when brands need a deeper connection with inflation-strapped consumers to boost sales and engagement.
The new form of AI-powered ads are being tested by a telecommunications giant and mobile phone/network operator and have sparked interest among retailers and a performing arts business, Petrova said. In one scenario, a shoe shopper asked the digital assistant questions one would ask a salesperson: Shoe size, color, price and availability.
If the Generative Response Ads for a specific brand are unable to answer a product question, the user is either directed to a human or the company web site, she said. “The capability goes far beyond a chat bot,” Petrova said.
The intersection of technology, marketing and business “creates an immediate connection” and it clarifies inventory levels, Petrova said. “It will take time, but every transaction will be conversational in the future. “This is a prime example of how AI will help consumers build stronger connections with brands as they get the answers they want immediately without any extra research on their end.”
“While conversational marketing is nothing new, advertisers can increase their reach massively with the help of AI-assisted conversational ads. This format is particularly good at conversion campaigns, enabling consumers to make the purchase decision faster with answers to their specific questions,” Riikka Söderlund, chief operating officer at Katana Cloud Inventory, said in an interview. “This puts pressure on brands having real-time product and inventory data connected to their e-commerce. AI can only operate based on available data, so having visibility to what is in stock is crucial.”
Chief marketing officers increasingly are harnessing AI to generate content directly for customers, whether through blogs, social media, sales collateral and tailored communications, a new report from Callan Consulting revealed last week.
Still, the concept of two-way communication with a live ad in real time does come with risks, warns Greg Zakowicz, senior e-commerce expert at Omnisend.
“This is a good example of throwing everything AI at the wall to see what sticks,” Zakowicz said in an email. “If done well, I could see platforms and advertisers having a lot of success with it, however, early stages of projects like this often have some hiccups that need to be smoothed out. If shoppers don’t easily find what they’re looking for, or results are strongly biased toward ads, consumers will have a frustrating experience and likely tune them out moving forward. However, if the right balance is achieved, platforms offering these services are likely to see their ad revenue take off.”
