Gen AI in marketing: Super-smart assistant or privacy headache - The Pros & Cons

The Generative AI market is estimated to reach $0.64 billion in 2024, growing at a CAGR of around 46.32% between 2024 and 2030, leading to a market volume of approximately $6.28 billion by the year 2030 as per industry reports. The reports also suggest that Generative AI has the potential to boost the GDP of India by $359-$438 billion by 2030.

Generative AI or Gen AI provides several advantages for marketers, by way of automation of the marketing communication process and in saving time, resources, and capital for strategic thinking and brainstorming. It helps in generating targeted and personalized ads, by identifying the appropriate customer segments and developing engaging, interactive content tailored to their tastes and preferences. The processes such as gathering insights for marketing campaigns, content design, execution, targeting, etc., that used to take much time, can now be done in less amount of time. Moreover, Generative AI gathers data and research about the target consumer personas and their preferences at a rapid pace, aiding marketers in gathering and analysis of data, enabling automated testing and hyper-personalisation. Even if Gen AI is not integrated entirely into the marketing communication process, it can be a great tool for marketers to get new ideas in less time and deal with tight deadlines.

According to a McKinsey report, Gen AI could contribute up to $4.4 trillion in annual global productivity. In the marketing sector alone, the productivity gains could increase marketing spend efficiency by 5-15 per cent, translating to approximately $463 billion annually.

Gen AI also helps employees to invest their time and energy towards more complex tasks, by the way of automation of manual ones and others such as drafting emails for email marketing campaigns, generating imagery, videos, etc. It further helps to offer product recommendations and to decipher customer feedback, resulting in reaching the right product and service to the right consumer. It assists in exploring opportunities for product innovation, however comes with risks of adherence to data privacy, copyright violation, and generation of unverifiable facts.

However, Gen AI is not without its downsides. According to digital marketing experts in the US, one of the biggest risks of utilizing Gen AI in marketing are legal and ethical concerns as per a report by NP Digital, along with serving wrong information, mechanical or similar content with a lack of human creativity and SEO.

A Forbes report suggests relying too much on AI for generating content can lead to the loss of the brand’s voice and its authenticity factor. It can also lead to communicating messaging that is in non-alignment with the values of the brand, requiring accurate quality control measures.

In this two-part series, Adgully seeks to understand the pros and cons of utilizing Gen AI in marketing, how it is helping to create targeted and personalized ads, the cost factors involved in utilizing Gen AI in marketing, how it is enhancing marketing efforts and impact and the various ways in which Gen AI is helping marketers, as well as the Do’s and Don’ts of using Gen AI in marketing.

Weighing in the Pros and Cons

Speaking about the pros and cons of utilizing Gen AI in marketing and how Gen AI is helping in the creation of targeted and personalized ads, Swati Nathani, Co-Founder, Team Pumpkin, said, “Gen AI is a game-changer for marketing. It’s like having a super-smart assistant that knows your customers inside and out. It can identify specific customer segments, predict preferences, and generate tailored ad copy and visuals. This level of customization leads to higher engagement, click-through rates, and conversions. But, like any powerful tool, it comes with risks. Privacy concerns, ethical questions about biases, and the potential to spread misinformation are real challenges that need careful handling.”

Valay Lakdawala, Co-Founder & Director - Client Relations, Neoniche, commented, “Imagine every marketer’s dream: reaching the right audience with the right message at the right time and place. This is what Generative AI has in store for marketers. It brings us closer to achieving hyper-personalization at scale, making marketing more efficient and effective. Gen AI offers numerous advantages, such as enabling hyper-personalization, improving efficiency, and providing deeper customer insights, which collectively enhance the effectiveness of marketing campaigns.

• Hyper-personalization: Delivers highly relevant content tailored to individual preferences, enhancing customer engagement and satisfaction.
• Efficiency: Automates content creation and testing, reducing time and effort.
• Scalability: Generates content at scale, ensuring consistent messaging across multiple platforms.
• Customer Insights: Analyzes vast amounts of data, providing deeper insights into customer behavior and trends.
• Innovation: Helps marketers identify new opportunities and innovate faster, staying ahead of the competition.”

Commenting on the cons of utilizing Gen AI in marketing, Lakdawala said, “However, challenges include a reliance on high-quality data, privacy concerns, high initial costs, and the potential risk of inaccuracies and over-reliance on AI, which can stifle human creativity.

• Data Dependency: Requires high-quality data to produce accurate results; poor data quality can lead to ineffective strategies.
• Privacy Concerns: Extensive use of customer data raises privacy issues, necessitating robust data protection measures.
• Initial Costs: High setup costs for AI tools and skilled personnel.
• Risk of Inaccuracies: Can produce plausible but factually incorrect outputs, requiring human oversight.
• Over-reliance: Risk of stifling human creativity and intuition due to dependence on AI.

Speaking on how marketing can effectively use Gen AI, Ambika Sharma, Founder & Chief Strategist, Pulp Strategy, said, “Generative AI is adding advantage to the marketing landscape by enhancing personalization, efficiency, and data-driven insights. This is not to say it replaces a good marketer, but it has its advantages in time saved in repetitive tasks. On the positive side, it enables the creation of highly personalized ads by analyzing vast amounts of data, ensuring that the content resonates with individual consumers, thereby boosting engagement and conversion rates. It also reduces the time used in content creation, allowing marketers to produce larger volumes of tailored content swiftly and efficiently. Gen AI offers deep insights into consumer behaviour and preferences, informing more strategic marketing decisions. On the flip side, poor use of the tech is the bigger fear, garbage in garbage out, it cannot solve poor input or incorrect use. There are also the high initial costs associated with implementing Gen AI, including investments in infrastructure, and software, and the largest cost which is training, can be a significant drawback. There are privacy concerns, as the use of consumer data for personalization must be carefully managed to avoid breaches. There is the matter of balance: while AI-generated content is highly efficient, it lacks the creative nuance and emotional depth that human marketers bring to campaigns, so using it in a balanced form, keeping the creativity for creative humans is my current recommended best practice.”

Neena Dasgupta, CEO & Founder, The Salt Inc, added here, “Generative AI is progressively reshaping the marketing landscape, it has significantly maximized what marketing can achieve. If properly utilized, it can help marketers accelerate content creation, enhance data analysis, and enable hyper-personalization. However, like all new technology learning curves, proper deployment of Generative AI requires extensive research, experimentation, and talent training. Accelerating this learning curve and consistently managing human oversight across the process are the two main barriers that marketers need to tackle to leverage Gen AI. Crafting highly personalized experiences for each customer is a key application of AI in marketing. Generative AI’s quick data analysis capabilities enable predictive modelling to understand and anticipate consumer behaviours and interactions, this segmented identification tooled with real-time content generation empowers marketers to deliver highly targeted and personalized ads.”

Upasna Dash, Founder & CEO, Jajabor Brand Consultancy, noted, “AI and Gen AI have rewired the way brands interact with consumers. While these advancements have streamlined many processes and SOPs, the essence of strategizing and choosing the right fit and narrative for the brand still lies with the brand custodians. Gen AI serves as a supplementary aide in this context, assisting rather than replacing human decision-making. On the positive side, Gen AI excels in personalizing data, enhancing efficiency by automating tasks, and processing vast datasets to identify patterns and extract actionable insights. However, there are significant data privacy concerns, integration challenges that require careful planning and technical expertise, and high implementation costs, which can be a barrier for smaller businesses.”

Dash further said, “In creating targeted and personalized ads, Gen AI is transformative. It identifies specific patterns and information through vast databases, analyzing data to uncover trends and valuable insights. This enables marketers to segment their audience effectively, identify opportunities, and make informed decisions. AI tools also automate tasks like content creation and campaign optimization. With continuous learning capabilities, AI algorithms improve over time, fine-tuning their predictions and recommendations to deliver better outcomes. While challenges exist, the benefits of Gen AI in marketing are profound, offering a competitive edge in creating ads that resonate with audiences.”

Manjul Wadhwa, Founder and CEO, Anagram Media, said, “Understanding how Gen AI personalizes marketing is easy. Think of it as hiring this amazing intern. But not your average intern – this one is a super-smart, all-rounder who can handle anything from research and planning to executing complex marketing strategies – working tirelessly and can process mountains of data in seconds. So, imagine you have a campaign to run. You need detailed market research, audience segmentation, personalized ad copies, and more to make it successful. You don’t have to do it all yourself, Gen AI steps in here. It analyzes customer data like a pro, identifies key trends, and helps you craft messages that speak directly to individual customers. It’s like having an intern who remembers every little detail about each customer and knows exactly what they want to hear. One of the biggest perks is the efficiency. Tasks that used to take days or even weeks can now be done in a flash. Plus, Gen AI is cost-effective. By automating repetitive tasks, it frees up your human team to focus on more strategic and creative aspects of your campaigns. However, you need to watch out for a few things. Despite its capabilities, Gen AI can sometimes miss that subtle human emotion and empathy that make marketing truly personal. Gen AI follows instructions perfectly but can’t always gauge the nuances and emotional depth behind them. That’s why you must oversee it to ensure the messages remain genuine and relatable.”

According to Ritesh Saraf, Co-Founder & CEO, Promilo, following are the pros and cons of Gen AI in marketing:

Pros: Gen AI enhances marketing by creating personalized ads based on user data such as browsing history, preferences, and demographics. This personalization increases engagement and conversion rates. Additionally, Gen AI automates content creation, campaign management, and data analysis, streamlining processes and reducing costs. The technology also provides valuable insights by analyzing large datasets, helping marketers understand customer behaviour and optimize strategies.

Cons: However, the use of Gen AI in marketing presents challenges. Privacy concerns arise from the collection and use of sensitive user data. The effectiveness of AI models heavily depends on the quality and accuracy of this data, which can be a limiting factor. Moreover, the initial implementation of Gen AI systems can be costly, requiring investment in technology, training, and integration.

He further added, “Gen AI helps create targeted ads by analyzing data to predict user preferences and behaviours. It tailors content to individual interests, making ads more relevant and engaging. This leads to higher click-through and conversion rates, improving overall marketing effectiveness. However, maintaining data privacy and ethical use remains crucial to sustaining consumer trust.”

Yasin Hamidani, Director, Media Care Brand Solutions, pointed out, “Gen AI leverages vast datasets to craft highly personalized ads, improving customer engagement and conversion rates. AI analyzes user behaviour, preferences, and purchase history to tailor content to individual needs. Automating repetitive tasks like data analysis, content creation, and customer segmentation saves time and resources, allowing marketers to focus on strategy and creativity. AI provides actionable insights by identifying trends and patterns in customer data, enabling more informed marketing decisions and better targeting. AI systems can handle large volumes of data and execute campaigns across multiple channels simultaneously, ensuring consistent messaging and broad reach.”

Pointing out the cons, Hamidani said, “The extensive use of personal data raises privacy issues. Ensuring compliance with regulations like GDPR and gaining user trust can be challenging. Integrating AI technologies requires significant investment in infrastructure, software, and talent, which may be prohibitive for smaller businesses. The effectiveness of AI-driven marketing heavily relies on the quality of data. Inaccurate or incomplete data can lead to poor targeting and ineffective campaigns. The use of AI can raise ethical concerns, such as biased algorithms and the potential for manipulation through hyper-targeted ads. Gen AI helps create targeted and personalized ads by analyzing vast amounts of data to identify individual preferences and behaviors. It uses machine learning algorithms to segment audiences and predict future actions, allowing marketers to deliver relevant content at the right time. For example, AI can recommend products based on previous purchases or browsing history, ensuring that ads resonate with the user's interests. This level of personalization increases engagement, drives conversions, and enhances the overall customer experience.”

Discussing the pros and cons of utilizing Gen AI in marketing, Joydeep Sen. Thinking Director, Speaking Mirror, said, “Generative AI offers significant advantages in marketing by enabling the creation of highly targeted and personalized advertisements. Its ability to analyze large datasets and learn consumer preferences allows marketers to craft content that resonates with specific audience segments, enhancing engagement and conversion rates. For example, AI can generate personalized email campaigns, recommend products based on browsing history, and tailor advertisements to match individual consumer interests. However, while the benefits are substantial, there are also challenges to consider. A primary concern is the risk of data privacy breaches, as AI systems require access to vast amounts of consumer data. Additionally, the reliance on AI-generated content could lead to a lack of human creativity and authenticity in marketing campaigns, potentially alienating some customers. Balancing the efficiency of AI with the need for genuine, human-driven interaction is crucial for maximizing its effectiveness in marketing.”

“AI is poised to revolutionize traditional teaching methods by serving as a powerful tool to enhance both instruction and learning experiences. With advanced data analytics, AI can conduct real-time assessments, providing insights into student engagement, which will further guide teaching methods. By analyzing the time spent on specific topics, AI can predict students’ comprehension levels, enabling teachers to modify approaches for key areas where students may need additional support or enrichment. Another positive impact on student learning could be in the form of sentiment analysis. Such an analysis will help educators monitor student emotions and stress levels, allowing them to adjust the curriculum to optimize content delivery and pace,” remarked Prashant Bhonsle, Founder of Kuhoo of Edtech.

Shivani Kamdar, Associate Creative Director, SoCheers opined: "The first pro is definitely the faster turnaround time in terms of conceptualisation and production. With the data that it shares, your ad creative can be based on targeted messaging thus making them a more personalised and effective piece of communication. Gen AI can generate new ideas and approaches, inspiring marketers to think outside the box and also prove to be a time efficient tool. The cons or the risks if we have to evaluate - first would be and it’s a no brainer - the lack of emotional connect! Thank God and technology for this, we won’t be replaceable with AIs for the sheer lack of emotional resonance. The other problem that I see is that with everyone using the tool, somewhere storytelling might get templatised and we’ll experience a fatigue period, unless there are any upgrades."

Delphin Varghese, Co-founder and Chief Revenue Officer, AdCounty Media commented: "Cutting-edge innovations within the realm of generative AI have had a transformative impact on marketing. From augmenting automation to powering hyper-personalization, generative AI has been an indispensable part of every marketer’s toolkit. Generative AI makes scalable content creation seamless and less time-consuming. Besides, it also offers insights into consumer behaviour and trends that help marketers craft tailored ad campaigns and make data-driven decisions. Personalisation fosters improved customer experience that boosts brand loyalty and customer retention.On the downside, Generative AI can pose data privacy and security risks. Besides, AI might often fail to understand the nuances of human creativity and seem repetitive or incoherent in terms of quality of the output."

(Tomorrow: Part 2 of the report will dwell on the cost factor involved in using Gen AI for marketing, how Gen AI is helping marketers, the Do’s and Don’ts manual for marketers, and more.)