Australian customers are ready for AI-driven experiences, so why aren’t brands?

Simon Stone, GM international at LoopMe, explores why brands are hesitant to dive into AI despite Australian customers' enthusiasm for it.

The ad tech market in Australia might be small in size, but it's dynamic in outlook. As the industry prepares for a rollercoaster 2024, the region is set to grapple with similar key topics influencing the industry globally, such as transparency and AI.

According to Adobe's 'State of Digital Customer Experience' report, only 6% of ANZ brands use AI to enhance customer experiences. This pales in comparison to the 18% doing the same globally. 

Brands in Europe and the US are investing more in integrating AI into their workflows. Despite the hype around the technology, ANZ brands still need to match the consumer interest and global adoption surrounding artificial intelligence (AI).

What this means for brands

The use of generative Al enables far more than just custom content at scale. If bots were to be trained on reams of first-party customer data, they could enhance a brand's understanding of their customers. 

According to the report, 56% of executives believe digital experiences will be more personalized thanks to AI, and 52% expect to leverage the technology within 12 months.

The digital advertising industry is already embracing AI models so powerful that brands can predict the success of an advertising campaign before spending a single penny. 

AI models can accurately forecast not only consumers' interests but also how likely they are to make a purchase at any point in a browsing session. Advertisers can leverage this technology to optimize campaigns toward their unique marketing goals. 

Using predictive AI models, brands can ensure ads are only delivered when they are most likely to meet KPIs. This also improves customer experience by ensuring only relevant ads are served.

Roadblocks to AI adoption

Failure to see the bigger picture might be why ANZ brands are falling behind in the AI race.

According to Accenture, it could take businesses up to 18 months to implement AI solutions. With businesses wanting to see results quickly to justify the financial investment in AI, extended timelines could be a significant barrier to adoption.

Another factor is that AI systems require a lot of data to train them, but the ad tech industry is faced with limited access to high-quality data, which can make it difficult to develop and train AI models that are accurate and reliable. In addition, the model should also be compatible with existing systems.

A lack of available AI skills in the workforce is another reason businesses waver in utilizing AI. Investing in acquiring or training employees with a strong understanding of AI solutions is essential for adoption to be a success.

Finally, regulatory requirements and security concerns might discourage businesses from investing in a robust data governance program to monitor data ownership, quality standards, and security protocols.

How can businesses practically adopt AI to improve customer experience?

Most businesses are using or plan to use AI in a number of business operations including, attracting new customers (81%), campaign planning (79%), audience definition (73%), campaign performance measurement (69%), and experience delivery (66%). 

Hiring the right talent or establishing upskilling initiatives to work with AI will be critical for success. To do this right, businesses might need to partner with experts to help with a guided rollout. It will also help to study successful case studies in your industry of businesses who have done the same. Comparing their technology infrastructure to yours will be a good starting point to check feasibility.

Once you've decided to embrace AI, it's imperative to create policies around using AI within the organization. Of course, all this will require a dedicated budget for such initiatives.

The similarities with CTV

Nearly five million Australians have used FAST channels or platforms in the past 12 months; however, the region is still reluctant to embrace connected TV (CTV) due to misconceptions surrounding its management and quality as a platform.

However, a study by Samsung Ads revealed that brands advertising on streaming platforms are perceived to be five times more modern and innovative than those advertising in non-streaming environments.

Respondents also perceived brands advertising on streaming as three times more relevant, premium and unique than those brand ads seen in non-streaming environments, reiterating the value and opportunity presented by CTV.

Let’s not forget about sustainability 

As with most industries now, the country's adtech industry faces a sustainability issue. According to data from Scope3, the Australian programmatic advertising industry is the second most carbon-emitting, compared to the USA, the UK, Germany, and France.

By adopting a consistent framework, the industry can measure and optimize both economic and environmental outcomes to create long-term sustainable media solutions.

More transparent data collection and efficient data processing algorithms and technologies will help reduce the energy consumption associated with data handling.

While digital advertising and data protection both serve public interests, enabling access to data in privacy-compliant ways is important for data-driven innovation. 

By keeping in mind the evolving state of the industry, brands should prepare themselves to weather the storms of change in 2024 and emerge as a stronger presence on the other side.