IAB ALM: 3 trends dominating the conversations with advertisers right now

The advertising industry is no stranger to disruptions. Every January, industry pros convene at the IAB’s The Annual Leadership Meeting (ALM) to discuss the trends they anticipate in the upcoming year. At this year’s ALM in Marco Island, Florida, we saw 3 key themes emerge:

1. A fragmented ecosystem

The rise in social media consumption and the subsequent fragmentation of digital and social channels means that brand marketers must find better ways to scale creative and maximize their media investment or risk missing their goals.  There’s no question that generative AI is the starring role in advancing the renaissance.   

As IAB CEO, David Cohen, noted: “We are at a critical inflection point in our digital evolution,” and fragmentation is at the center of it. According to our Digital AdvertisingTrends Report, 50% of advertisers struggle to reach the right customers across multiple platforms.

There are many factors that make this challenging:

• Planning: Understanding the best channel and funnel stage mix to use to drive ROI. A strong platform mix is key to finding incremental reach and unlocking new buyers.
• Execution: Repurposing creative for new formats, especially new formats like short-form video. Driving a holistic customer journey across a fragmented ecosystem requires care at every step.
• Reporting: Understanding incremental reach and ROAS across channels. We heard strong calls for interoperability of data, and sessions on best practices for data collaboration between retailers and publishers.
  

At Smartly, our goal is to address these challenges and bring the fragmented ecosystem together.

2. Creative is the new performance lever‍

Since cookie deprecation entered the conversation, marketers have been seeking new ways to optimize performance. 

Creative has risen as the answer: 70% of an ad’s performance is determined by creative. IAB ALM sessions discussed the need to understand your audience, tailor your creative strategy, and focus on building brand trust, not just stopping the scroll.

We built towards this years ago when we released our Creative Editor, which allows marketers to easily build and scale creative. Now, we believe AI is the next frontier.

The challenges in ad creative are captured well by a quote from Jason Spero, Global Product Lead at Google. “Creativity is at the heart of marketing, but we all know how impossible it is to deliver the volume and velocity we need at the personal level. AI is making this possible… [it] is changing the foundation of everything we do in marketing”

3. AI is changing everything

AI dominated the conversation in 2023 and shows no signs of slowing down in 2024. Many IAB ALM sessions were AI-focused, including our own, where Arto Tolonen (Head of AI Product Lab) and I spoke to the audience about Unlocking the Power of Ad Creative with AI.

Here’s our perspective:

• 2023 was a year of AI exploration. Advertisers tried point solutions and played with tools for image, text, video, and audio generation. They saw the many benefits that Generative AI can offer: faster production, new creative possibilities, and improved performance. In the 2024 Digital Advertising Trends Report, we learned that 96% of advertisers are already exploring or investing in generative AI.
• We believe that 2024 will be the year of sophistication and integration. Here’s what that means:

• Sophistication: enterprise-first features enabling governance, control, and customization will start to be table-stakes. Solutions that allow creatives to generate without the need for a legal team’s review of each output will rise to the top.
• Integration: move beyond point solutions to tools that take you from idea to ad, and integrate with the workflows you already know. From insights to generating assets to scaling across variations to post-launch optimization, AI will support you through every step.
  

In our session, we highlighted a few performance-based case studies that show the impact of generative AI. Highlights include Emma Sleep’s 246% CVR improvement with background enhancement at scale, and Foot Locker’s 28% CPA improvement with a mix of creative insights, background generation, and copy personalization. More on this soon.

By leaning into AI and machine learning, in combination with geographic and other personalized data, we can better understand customers at scale and their journey between screens. “AI helps you build trust and optimize ad spend,” noted  Kelly MacLean, VP, Amazon DSP, Amazon Ads. “Unlock and accelerate the future.”

The advertising industry is at an exciting inflection point. With disruption, we believe there’s opportunity. Interested to partner with us on the solutions to these 3 key disruptions? Reach out to learn more about our AI Lab today.