Did you hear that? That’s the sound of a group of gen AI adtech startups dying.
According to a new report by The Wall Street Journal, Meta plans to let brands fully create and target ads using its AI tools by the end of next year.
Here’s a summary from Reuters:
“A brand could provide a product image and a budget, and Meta’s AI would generate the ad, including image, video and text, and then determine user targeting on Instagram and Facebook with budget suggestions, the report said.
Meta also plans to let advertisers personalize ads using AI, so that users see different versions of the same ad in real time, based on factors such as geolocation, according to the report.”
Are you surprised? You shouldn’t be. With rapid advancements in AI for image and video creation, it was inevitable that creative work would be cannibalized by larger AI companies. Meta wants its tech to be a one-stop shop, and intelligent creative automation is key to that.
Why This Matters:
Last week, Crunchbase reported that most of the startup funding over the last year has gone to AI startups. While they didn’t break down funding by industry, there’s no shortage of creative-focused companies—like Icon—that have been funded on the promise of streamlining creative production through AI.
But what happens when the top platform for SMB and DTC brands—armed with massive AI compute and consumer data—decides to do it all itself? Meta has been heading in this direction for a while, but this could be the final blow for startups trying to carve out a niche in AI-generated ad creative. Meta is set to offer everything, all in one platform.
Experts React:
Here are some top posts on X about the news:
Our Take:
Over the weekend, we listened to a podcast where someone said that advertisers want “an easy button” to stay on the open web. Meta is promising to deliver exactly that for its ecosystem. And for creative work, if the quality is there, Meta’s AI might just be the easy button (smaller) brands have been waiting for. This is especially powerful for SMBs that don’t have the resources for extensive creative testing and production—automating the process levels the playing field.
Larger brands, of course, will likely still have a need for human oversight and refinement. Caution about relying solely on generative AI for ad creative will persist, we think, as they want to ensure they maintain control over brand suitability and voice, among other things. Ceding control entirely to an AI sounds helpful and horrific simultaneously.
