Ad executives talk artificial intelligence, blockchain

After a decade grappling with the rise of smartphones, the advertising industry is already thinking about the next technological disruption: artificial intelligence (AI) and blockchain.

At Ad Stars 2018, the country’s only advertising awards festival, in Busan last month, marketing and advertising experts gathered to discuss how the industry plans to adapt the latest technological advances.

One technology widely cited in the market is artificial intelligence. Jang Chang-bum, a senior executive from the Korean advertising agency Dart Media, said during a session on Aug. 24 that AI devices based on voice recognition could be the dominant digital device, replacing smartphones and keyboards.

“The first AI-powered speakers in the market were priced at 200,000 to 300,000 won [$179 to $268], but now we have cheaper ones around the 100,000 won level,” he said. “If technology develops further and they become even cheaper, the day will come when AI speakers will position themselves as a staple home electronics item that most people have.”

Jang offered the case of a Burger King advertisement aired last year in which the actor in a 15-second commercial activated a Google Home device by calling out “O.K. Google, what is the Whopper burger?” The speaker gave a full-length voice explanation from Wikipedia. The advertisement generated buzz on social media.

However, Jang said that AI devices, including speakers, are in their early stages and need more technological development in order to be used as an effective advertising tool.

For campaign creators, artificial intelligence technology can also be used to devise strategy. U.S.-based company Persado uses an AI database to devise marketing messages on online banner ads using the style, structure and vocabulary most likely to elicit responses from a company’s target audience.

Blockchain is another tool that many tech start-ups are using to improve inefficiencies in the online advertising industry.

“There are so many pop-up ads on smartphones these days - we all have the experience of pushing the wrong banner and immediately closing it,” said Park Sung-hyuk, CEO of RecoBell, a big data marketing firm. “The advertiser is paying for all these ads that people often close without even looking, but they don’t know how much traffic from clicks are actual consumer responses or fake.”

Park added that media agencies which upload online ads to different websites and apps on commission fees often overstate their audience reach, but companies don’t have the capacity to discern the ad’s real effects. Another problem is that most contracts in the market are hand-signed.

Blockchain technology can solve that by enhancing transparency, Park said. RecoBell is part of a group of digital marketing companies developing peer-to-peer platforms for clients and agencies which uses a digital ledger to immediately record clicks and consumer responses to online ads.

Another Korean digital marketing company, ab180, is developing technology to apply blockchain to databases of personal data permitted for commercial use.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]