With artificial intelligence dominating headlines and the race for AI-driven solutions accelerating, the technology landscape is experiencing a tipping point.
From groundbreaking advancements to widespread overuse, the balance between innovation and necessity is increasingly blurred, highlighting the urgent need for clearer rules to navigate AI’s evolution and its practical applications.
The excessive use of AI
Open any technology news website and there’s hardly a day without a new AI-something invented. The world is witnessing an over-reliance on AI that seeks to fill every gap and address all shortcomings — both when necessary and not.
Currently, there are no clear rules on how AI is implemented. As long as this continues, the industry will only get cluttered with AI’s failures. Although, in certain domains, artificial intelligence is a real game changer.
For example, Meesho, a Softbank-backed online shopping site, reduced expenses by 75 per cent through its first GenAI-powered voice bot. It can also become a waste of resources.
Research by the RAND Corporation indicates that over 80 per cent of AI projects fail, which is twice the failure rate for non-AI technology startups. This frustration is often leading to unmet expectations and growing trust issues surrounding AI.
Meaningless AI projects will get shut down and ignored eventually at some point and new rules of Right and Wrong will help us navigate the evolution of AI better.
Practical applications of AI
The priorities of tech companies are slowly shifting from competing based on model scale and size to practical implementation and use cases for them.
The latest McKinsey Global Survey on AI reveals that 65 per cent of organisations now regularly use gen AI, nearly double the figure from ten months ago.
It is no surprise that, for instance, Inflection AI is transitioning from building next-gen models to making enterprise tools based on AI, after claiming last year to outperform OpenAI, Meta, and Google.
The goal to improve operations is also shown by Zoom’s latest introduction of the AI Companion 2.0 and tailored AI options for different industries that change focus on leveraging company knowledge for better summaries and support. Yasmina, the voice assistant, is another practical product built with artificial intelligence.
Searching for new advertising inventory
Digital advertising accounts for 70 per cent of global ad investments in 2024, according to Statista. With rising privacy concerns, brands are increasingly seeking alternative inventory sources.
Platforms such as retail media and streaming content are emerging as viable options for brands aiming to connect with consumers in a more meaningful way. Uber, as an alternative ad placement, is experiencing significant growth, with annual earnings projected to exceed $1bn. Likewise, nearly 30 per cent of Instacart’s revenue came from advertising last year.
Walmart has acquired TV manufacturer Vizio to strengthen its position in connected TV advertising and expand its advertising reach.
Quick commerce companies from India like Blinkit and Zepto are also seeing a big boost in ad revenue, with expectations to surpass $117mn this financial year. This increase is fueled by their growing user base and the need for brands to stand out.
The growing importance of offline advertising in retail
Many experts agree that retail transactions remain primarily in-store, driving a growing focus on incorporating offline operations into holistic marketing strategies.
Out-of-home (OOH) advertising continues to grow, backed by the surge of digital screens, programmatic buying, and integration with digital media.
Besides, according to a study from the OAAA and The Harris Poll, 76 per cent of recent digital out-of-home (DOOH) viewers took action after seeing an ad, such as watching a video (38 per cent), visiting a restaurant (36 per cent), purchasing in-store (30 per cent), word-of-mouth conversations (30 per cent), and visiting a store (29 per cent). It is not surprising that retailers are trying to be on top of that with in-store, place-based ads.
In this context, a full-funnel retail media strategy blending digital ad strategy with offline marketing will become essential for retailers.
By Sergej Loiter, CEO of Search, AI, and AdTech at Yango
