How AI Is Reshaping the Advertising Industry

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Alex Ossola (0:19)

Hey, What's News listeners, it's Sunday, February 8th. I'm Alex Ossola for The Wall Street Journal. This is What's News Sunday, the show where we tackle the big questions about the biggest stories in the news by reaching out to our colleagues across the newsroom to help explain what's happening in our world. On today's show, artificial intelligence is reshaping the advertising industry. We get into the visible and subtle ways AI is changing commercials and what it means now that AI companies themselves are getting in on the action. It's Super Bowl Sunday, which means it's the advertising industry's, well, Super Bowl. This year, 30 seconds of Super Bowl ad time costs more than $8 million for many companies. And that's just for the time. They can spend tens of millions more on making the ads themselves. So increasingly, companies are turning to artificial intelligence to cut the cost of making an ad. At the same time, AI companies themselves are getting into the advertising game too. I sat down with WSJ journalist Katie Deighton and Suzanne Vranica, who cover advertising all year round about what this year's game has in store and how the industry is changing.

Katie, Suzanne, thanks for being here. Have you seen any of the ads ahead of this year's Super Bowl, and what are some of the big takeaways? Katie, let's start with you.

Katie Deighton (1:39)

Yeah, we have definitely seen the ads. We are getting this similar variety that we've had for the past few years. So a lot of tech brands in there, but also a lot of brands that people would probably think of as household names.

Suzanne Vranica (1:53)

We've seen probably everything. There are a few surprises. Companies can spend up to $50 million just to create the spot. If you include CGI, celebrities, you're going to see tons of celebrities. And we've seen this as a trend for the last five years.

Alex Ossola (2:10)

So it sounds like some things are definitely going to be the same this year. But over the past year at least, it seems like something's been shifting, right? The amount of AI in advertising seems like it's really having its moment. So, Suzanne, I want to ask you a little bit about how AI companies themselves are getting in the Super Bowl this year.

Suzanne Vranica (2:29)

Every year, there's a big category that comes out, and this year, it's going to be the AI Bowl, definitely. You've got Anthropic that's making their Super Bowl debut, OpenAI is expected to air a spot, Microsoft is going to be pushing Co-Pilot, so that's a lot.

Alex Ossola (2:44)

Is it new that these companies are getting in on advertising like this?

Suzanne Vranica (2:48)

Over the last two years, there's basically been an ad battle that's starting to form. They're pouring billions of dollars into creating these companies, and now there's a death match going on for users, because they have to make sure that users know which chatbot. Do you like Chat Cheap ET.? Do you like Claude? And so it's name recognition, and there's nothing better for name recognition in today's world than the Super Bowl Sunday. You're going to get 100 million viewers typically, and you can look back in history, and companies have launched successfully year after year on the Super Bowl.

Alex Ossola (3:21)

Do the ads have to be good?

Suzanne Vranica (3:23)

The ads have to really be good, because there's so many competing for attention, right? And so if they're not good, you're going to get negative stories the next day, or worse, no one's even going to remember them. So there's a big competition on whose are going to be the most creative, and that's why you see lots of companies putting multiple celebrities, hoping that helps them stick out.

Alex Ossola (3:44)

And for these AI companies, are they using AI to make their ads?

Suzanne Vranica (3:48)

They are not in most cases. What they're using AI for is the research, or to brief their agencies, or some of the grunt work that happens. Obviously, we've seen lots of companies put AI creative out there, and it doesn't look great in many cases. That's the future, there's no doubt, but right now people are using it on the back end, more than the front end, and I think Super Bowl, no one wants to risk the millions of dollars that it costs, with people being upset about what it looks like.

Katie Deighton (4:14)