AI and Chatbots in Advertising

The Impact of ChatGPT on Advertising

The Impact of ChatGPT on Advertising
Reading Time: 3 minutes

Advertising is a critical component of business strategy, and innovation in the industry is necessary for staying competitive. Some of the tools and resources organizations have begun leaning on for this competitive edge are through technological advancements and AI-powered tools.

More specifically, AI chatbots, like the popular (and controversial) ChatGPT, are becoming increasingly popular in advertising. Business leaders are using them for service support, ad personalization, research analysis, and much more.

But before jumping on the bandwagon, it’s best to analyze the impact of AI tools, such as ChatGPT, in the advertisement industry as a whole. 

A role for ChatGPT in advertising

For those still unfamiliar with the tool, ChatGPT combines natural language processing (NLP) and AI-driven technology to generate automated responses to user queries. Prompts can be as simple as writing Google ads or as complex as developing strategies for showcasing company products and services.

When it comes to advertising, ChatGPT can assist in a variety of ways that appeal to the needs of the industry. For instance:

Short-term support

  • ChatGPT can respond quickly to customer inquiries and provide advanced analytics for tracking the performance of campaigns in real time.

Medium-term support

  • Companies can gain insight into customer behavior, allowing them to target audiences more accurately and efficiently, reducing costs and increasing ROI. 

Long-term support

  • Content customization based on individual customer preferences and automated lead generation helps businesses scale their marketing campaigns, quickly identify potential customers, and convert them into paying customers.

What are the benefits of ChatGPT for advertisers?

Getting down to the nitty-gritty of advantages may seem redundant at this point, but for the organizations reaping the rewards, the results speak for themselves. From companies like Microsoft, Sephora, and Coca-Cola to Duolingo, Slack, and even Snap Inc., ChatGPT has struck a cord for powerfully valuable AI capabilities.

Companies can leverage ChatGPTs:

Chatbots for customer service

Companies can develop AI-powered chatbots using ChatGPT to interact with customers, answer inquiries, and provide personalized recommendations. Automating customer service tasks such as answering FAQs and resolving issues frees up time for employees to focus on more complex tasks. Plus, implementing these chatbots on websites, social media platforms, or messaging apps enhances customer engagement and drives conversions.

Personalization of ads and better targeting

Using ChatGPT to analyze customer data for personalized ads makes them more relevant to users. Independent ad tech advisor, Ivan Guzenko, explains in a recent Forbes piece that “…advertisers can ask ChatGPT to suggest different ideas for personalizing banners for each audience segment. Additionally, they can create audience segments and collect and analyze data based on chosen segmentation criteria.” As a result, advertising has become much more effective in reaching its intended audience than ever before.

Social media advertising

Instead of traditional static ads, companies can create conversational ad experiences using ChatGPT. These ads can simulate conversations, allowing users to engage with the brand or product in a more interactive and personalized manner. Based on specific social media goals, companies can also utilize social media analytics for peak engagement and optimizing ad campaigns.

AI-powered copywriting

ChatGPT can write compelling copies for a landing page, call-to-actions, promotional video scripts, and even ad campaigns for various channels. Though only recommended to use at face value if prompts are tailored for maximum efficiency, copywriters can explore copy suggestions, refine, shorten, or rewrite messaging, and enhance their creativity in advertising efforts.

The challenges and limitations of ChatGPT

Of course, nothing is perfect. Though ChatGPT offers immense potential for the advertising world, it’s crucial to acknowledge its shortcomings. Companies must be aware of the ethical implications, quality limitations, output relevancy, and overall disadvantages before investing in this tool.

Here are four key areas that warrant consideration:

  1. Ethical concerns: Dr. Ridoan Karim with New Straits Times is clear when pointing out that ChatGPT “raises legal and ethical issues related to copyright, privacy, misuse, bias, and transparency.” Addressing ethical concerns requires careful monitoring, ongoing evaluation, and mindful guidelines for content generation.
  2. Accuracy of data and outputs: ChatGPT’s responses are generated based on patterns learned from vast amounts of data. However, it can inadvertently generate false claims, incomplete answers, or content that lacks proper context. Relying solely on ChatGPT’s outputs without human oversight can pose risks to the credibility and reliability of advertising content.
  3. Need for human oversight: While ChatGPT autonomously generates “ready-to-use” responses, human oversight is essential for quality control. Combining the power of AI with human expertise helps create a balance between automation and company branding. Without guided reviews and edits, a generated copy will fall on confused audiences if expressions or styles are unrecognizable for specific brands.
  4. Technical limitations of ChatGPT: It’s important to remember that this tool has limitations that can impact its performance. It’s reasonable for emotional and social contexts to get lost in translation when attempting to produce results. Using precise and informed directives can help reduce ChatGPT’s struggle to interpret complex prompts.

Future of AI in Advertising

The advertising industry already looks very different from what it used to be. With more developments, support, and investments in the capabilities of AI, there is a lot to look forward to. As these AI technologies continue to evolve, we can expect to see even more advanced and intelligent chatbots that can provide greater value to businesses and their customers and improve in areas where it currently falls short.

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