Meta sees AI changing advertising 'in a big way'

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AI is all the buzz—and the world of advertising does not appear to be an exception. Meta has high hopes for the role of artificial intelligence in advertising, with CEO Mark Zuckerberg saying on a recent earnings call that “AI is going to change advertising in a big way.”

Meta Head of Global Business Nicola Mendelsohn joins Yahoo Finance Live at the World Economic Forum in Davos, Switzerland to discuss the incorporation of AI in advertising and how the company is leveraging AI for advertisers.

Mendelsohn states that current AI tools in its Meta Advantage suite have assisted in “really significant growth for advertisers" who have seen “better targeting and better performance.”

Mendelsohn sees a “cautious optimism” from advertisers who utilized internet advertising less in 2023.

According to Mendelsohn, access to tools are not limited to size, noting: “It’s always been about the democratization of digital marketing,” with companies of all sizes utilizing features such as reels for advertising.

With the upcoming presidential election, Mendelsohn states the company is “constantly working out what our [Meta’s] playbook is,” in terms of political advertising regulations—not just in the US but globally.

It's all part of Yahoo Finance's exclusive coverage from the World Economic Forum in Davos, where our team is speaking to top decision-makers as well as preeminent leaders in business, finance, and politics about the world’s most pressing issues and priorities for the coming year.

Editor's note: This article was written by Eyek Ntekim.

Video Transcript

[AUDIO LOGO]

- On Meta's last earnings conference call, CEO Mark Zuckerberg said that AI is going to change advertising in a big way. And we have the perfect person to talk about that, the head of the Global business group at Meta who's in charge of advertising among other things. Great to see you. Nicola Mendelsohn is here with us in Davos. So Nicola, it's already changing advertising in many ways. So talk to us about what you're already seeing and what we may yet see in terms of the two.

NICOLA MENDELSOHN: OK. So back in '22, we brought together all of the products that we have that are actually powered by AI into our Meta advantage suite. And what we're seeing now is that our advertisers on the whole are using at least one of those products. And the reason they're doing that is because it's giving them better targeting and better performance. On average, they're seeing about a 32% increase in return on their advertising spend. So this is really significant.

So this is where we are already today. We're going to continue to be investing to deliver stronger performance for our advertisers. But also when you start to think about generative AI, well, that's where we're really going to see some exciting changes, and we already are. So when it comes to-- we launched last year our whole generative AI sandbox, and we're seeing our advertisers now starting to do image creation in there. We're starting to do image enhancement. We're starting to see copy being done.