Take a quick look at the latest securitiesand you would be forgiven for thinking that the generative artificial intelligence the bubble bursts, because Wall Streetat least.
Marketers, on the other hand, take a longer-term view.
Stocks have tumbledrevealing a stark reality: Once-touted innovations in next-generation AI are slowing, while the costs of maintaining the technology are skyrocketing as businesses struggle to generate the profits they need.
Gartner’s well-known study on the hype cycle places gen AI for marketing firmly in the “peak of inflated expectations” phase, meaning that product adoption is on the rise, but hype still trumps hard evidence of its effectiveness. Sequoia Capital adds that for an AI company to achieve true profitability, it will need to generate $600 billion in revenue.
Despite these concerns, marketers, who are experimenting with the technology to enhance creativity rather than use it for profit, remain optimistic about the long-term benefits of generative AI in advertising.
“We’re still in our early days, and many brands and marketers are hesitant to fully commit to generative AI, especially from a brand safety perspective,” said Jason Snyder, CTO at Momentum Worldwide. “Most implementations are more like stunts than fully integrated strategic uses. In that sense, marketers are somewhat insulated because the focus is on leveraging AI to enhance human capabilities, rather than relying on it as a standalone profit center.”
This makes it easier for brands to abandon tools that don’t work.
Unrealistic deadlines
Two years into the generational AI boom, its application among marketers is still largely experimental, and a clear understanding of the return on investment is likely more than a year away, industry sources say.
Even high-profile AI campaigns, like Coca-Cola used AI to generate a new flavor last Septemberdid not demonstrate strong revenue attribution or sales lift from the brand’s AI efforts, according to Snyder, whose agency was behind the Coca-Cola campaign.
“There may not be enough data yet to support this level of modeling,” he added.
Training teams on AI tools also impacts how quickly brands can assess ROI.
“The potential of the technology has not been overstated, but the time frame to realize it has been,” said Jacob Bourne, an analyst at eMarketer.
For example, agentic AI (models that can take autonomous actions, such as searching for and booking flights for people) was expected to be a bigger trend this year for brands, particularly travel brands, but its deployment has been limited to a few notable examples, such as Qatar Airways.
