Advertisers are backing the AI boom with AI-related spending. So far in 2023, they’ve spent nearly four times as much on AI product advertisements as they did last year through the same period, according to a new report by ad intelligence and sales enablement platform MediaRadar.
Advertisers have spent $40.2 million promoting AI products and solutions through September 2023 — up from $10.9 million through 3Q 2022. In 3Q ‘23 alone, AI advertisers spent $35 million, a 550% increase from summer 2022.
Throughout the year, tech companies of all sizes have updated their platforms with AI capabilities and released new genAI tools. Many are now spending on ads to promote these products and updates.
Big spenders. Over 360 advertisers were included in MediaRadar’s data set. Some of the top advertisers included IBM (IBM watsonx), Microsoft (Microsoft 365 Copilot), Dialpad, Salesforce (Slack GPT), and YourHana.AI.
Six percent of advertisers spent over $100,000 in AI ads, accounting for more than $36 million in ad spend.
TV and digital. IBM watsonx was the driving force in Q3, investing in TV (54% of spend) and online video (32%), MediaRadar found.
Within the digital landscape, online video reached $11.7 million. Digital display and paid social each received around $3 million in spend.
Here’s how the spend has been allocated this year:
Summer surge. The number of AI advertisers in Q3 2023 increased 135% YoY, with 180+ AI advertisers compared to around 80 during the same period in 2022, MediaRadar’s study found.
July 2023 saw a month-over-month increase of nearly 200%, reaching $2.9 million, while August finished with a 19% YoY to $3.5mm.
September spiked over 730% from August. This was fueled by new advertisers and IBM watsonx upping its ad spend.
Why we care. The ads are working apparently. Nearly 85% of marketing decision-makers and CMOs say they already use AI tools, 41% using them regularly, according to a survey from Matter Communications. The awareness through ads and industry-wide discussions, coupled with widespread use, and intent to invest in AI even more next year, sets the stage for substantial growth. It’s not just about inflated expectations and hype if marketing practitioners are actually implementing these tools in their workflow already, and looking to do more in the new year.
Dig deeper: What does the future hold for genAI? The Gartner Hype Cycle
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