How the generative A.I. boom could forever change online advertising
Sebastien Bozon | AFP | Getty Images
Shortly after ChatGPT hit the market last year and instantly captured headlines for its ability to appear human in answering user queries, digital marketing veteran Shane Rasnak began experimenting.
As someone who had built a career in creating online ad campaigns for clients, Rasnak saw how generative artificial intelligence could transform his industry. Whether it was coming up with headlines for Facebook ads or short blurbs of ad copy, Rasnak said, jobs that would have taken him 30 minutes to an hour are now 15-minute projects.
And that’s just the beginning.
Rasnak is also playing with generative AI tools such as Midjourney, which turns text-based prompts into images, as he tries to dream up compelling visuals to accompany Facebook ads. The software is particularly handy for someone without a graphic design background, Rasnak said, and can help alongside popular graphic-editing tools from Canva and Adobe’s Photoshop.
While it’s all still brand new, Rasnak said generative AI is “like the advent of social media” in terms of its impact on the digital ad industry. Facebook and Twitter made it possible for advertisers to target consumers based on their likes, friends and interests, and generative AI now gives them the ability to create tailored messaging and visuals in building and polishing campaigns.
“In terms of how we market our work, the output, the quality and the volume that they’re able to put out, and how personalized you can get as a result of that, that just completely changes everything,” Rasnak said.
Rasnak is far from alone on the hype train.
Meta, Alphabet and Amazon, the leaders in online advertising, are all betting generative AI will eventually be core to their businesses. They’ve each recently debuted products or announced plans to develop various tools to help companies more easily create messages, images and even videos for their respective platforms.
Their products are mostly still in trial phases and, in some cases, have been criticized for being rushed to market, but ad experts told CNBC that, taken as a whole, generative AI represents the next logical step in targeted online advertising.
“This is going to have a seismic impact on digital advertising,” said Cristina Lawrence, executive vice president of consumer and content experience at Razorfish, a digital marketing agency that’s part of the ad giant Publicis Groupe.
In May, Meta announced its AI Sandbox testing suite for companies to more easily use generative AI software to create background images and experiment with different advertising copy. The company also introduced updates to its Meta Advantage service, which uses machine learning to improve the efficiency of ads running on its various social apps.
Meta has been pitching the Advantage suite as a way for companies to get better performance from their campaigns after Apple’s 2021 iOS privacy update limited their ability to track users across the internet.
‘Personalization at scale’
As these new offerings improve over time, a bicycle company, for example, could theoretically target Facebook users in Utah by showing AI-generated graphics of people cycling through desert canyons, while users in San Francisco could be shown cyclists cruising over the Golden Gate Bridge, ad experts predict. The text of the ad could be tailored based on the person’s age and interests.
“You can be using it for that sort of personalization at scale,” Lawrence said.
Meta’s Advantage service has been gaining traction with retailers using it for automated shopping ads, according to data shared with CNBC by online marketing firm Varos.
In May 2023, roughly 2,100 companies spent $47 million, or about 27.5% of their combined total monthly Meta advertising budgets on Advantage+, the Varos data showed. A month earlier, those companies directed 26.6% of their budget, or $44.9 million, to Advantage+.
Last August, when Meta formally debuted its Advantage+ automated shopping ads, companies put less than 1% of their Meta ad spend into the offering.
Meta Platforms CEO Mark Zuckerberg speaks at Georgetown University in Washington, Oct. 17, 2019.
Andrew Caballero-Reynolds | AFP | Getty Images
Varos CEO Yarden Shaked said the increase shows Facebook is having some success in persuading advertisers to rely on its automated ad technology. However, Shaked said he’s “not sold on the creative piece yet,” regarding Meta’s nascent foray into providing generative AI tools for advertisers.
Similarly, Rasnak said Midjourney’s tool isn’t “quite there yet” when it comes to producing realistic imagery that could be incorporated into an online ad, but is effective at generating “cartoony designs” that resonate with some smaller clients.
Jay Pattisall, an analyst at Forrester, said several major hurdles prevent generative AI from having a major immediate impact on the online ad industry.
One is brand safety. Companies are uncomfortable outsourcing campaigns to generative AI, which can generate visuals and phrases that reflect certain biases or are otherwise offensive and can be inaccurate.
Earlier this year, Bloomberg News found that AI-created imagery from the popular Stable Diffusion tool produced visuals that reflected a number of stereotypes, generating images of people with darker skin tones when fed prompts such as “fast-food worker” or “social worker” and associating lighter skin tones with high-paying jobs.
There are also potential legal issues when it comes to using generative AI powered by models trained on data that’s “scraped from the internet,” Pattisall said. Reddit, Twitter and Stack Overflow have said they will charge AI companies for use of the mounds of data on their platforms.
Scott McKelvey, a longtime marketing writer and consultant, cited other limitations surrounding the quality of the output. Based on his limited experience with ChatGPT, the AI chatbot created by OpenAI, McKelvey said the technology fails to produce the kind of long-form content that companies could find useful as promotional copy.
“It can provide fairly generic content, pulling from information that’s already out there,” McKelvey said. “But there’s no distinctive voice or point of view, and while some tools claim to be able to learn your brand voice based on your prompts and your inputs, I haven’t seen that yet.”
An OpenAI spokesperson declined to comment.
A spokesperson for Meta said in an email that the company has done extensive research to try to mitigate bias in its AI systems. Additionally, the company said it has brand-safety tools intended to give advertisers more control over where their ads appear online and it will remove any AI-generated content that’s in violation of its rules.
“We are actively monitoring any new trends in AI-generated content,” the email said. “If the substance of the content, regardless of its creation mechanism, violates our Community Standards or Ads Standards, we remove the content. We are in the process of reviewing our public-facing policies to ensure that this standard is clear.”
The Meta spokesperson added that as new chatbots and other automated tools come to market, “the industry will need to find ways to meet novel challenges for responsible deployment of AI in production” and “Meta intends to remain at the forefront of that work.”
Stacy Reed, an online advertising and Facebook ads consultant, is currently incorporating generative AI into her daily work. She’s using the software to come up with variations of Facebook advertising headlines and short copy, and said it’s been helpful in a world where it’s more difficult to track users online.
Reed described generative AI as a good “starting point,” but said companies and marketers still need to hone their own brand messaging strategy and not rely on generic content. Generative AI doesn’t “think” like a human strategist when producing content and often relies on a series of prompts to refine the text, she explained.
Thus, companies shouldn’t simply rely on the technology to do the big picture thinking of knowing what themes resonate with different audiences or how to execute major campaigns across multiple platforms.
“I’m dealing with large brands that are struggling, because they’ve been so disconnected from the average customer that they’re no longer speaking their language,” Reed said.
For now, major ad agencies and big companies are using generative AI mostly for pilot projects while waiting for the technology to develop, industry experts said.
Earlier this year, Mint Mobile aired an ad featuring actor and co-owner Ryan Reynolds reading a script that he said was generated from ChatGPT. He asked the program to write the ad in his voice and use a joke, a curse word and to let the audience know that the promotion is still going.
After reading the AI-created text, Reynolds said, “That is mildly terrifying, but compelling.”
Watch: Social media showdown: Instagram to launch direct competitor to Twitter
The Hims app arranged on a smartphone in New York on Feb. 12, 2025.
Gabby Jones | Bloomberg | Getty Images
Hims & Hers Health shares closed up 5% on Tuesday after the company announced patients can access Eli Lilly‘s weight loss medication Zepbound and diabetes drug Mounjaro, as well as the generic injection liraglutide, through its platform.
Zepbound, Mounjaro and liraglutide are part of the class of weight loss medications called GLP-1s, which have exploded in popularity in recent years. Hims & Hers launched a weight loss program in late 2023, but its GLP-1 offerings have evolved as the company has contended with a volatile supply and regulatory environment.
Lilly’s weekly injections Zepbound and Mounjaro will cost patients $1,899 a month, according to the Hims & Hers website. The generic liraglutide will cost $299 a month, but it requires a daily injection and can be less effective than other GLP-1 medications.
“As we look ahead, we plan to continue to expand our weight loss offering to deliver an even more holistic, personalized experience,” Dr. Craig Primack, senior vice president of weight loss at Hims & Hers, wrote in a blog post.
A Lilly spokesperson said in a statement that the company has “no affiliation” with Hims & Hers and noted that Zepbound is available at lower costs for people who are insured for the product or for those who buy directly from the company.
In May, Hims & Hers started prescribing compounded semaglutide, the active ingredient in Novo Nordisk‘s GLP-1 weight loss medications Ozempic and Wegovy. The offering was immensely popular and helped generate more than $225 million in revenue for the company in 2024.
But compounded drugs can traditionally only be mass produced when the branded medications treatments are in shortage. The U.S. Food and Drug Administration announced in February that the shortage of semaglutide injections products had been resolved.
That meant Hims & Hers had to largely stop offering the compounded medications, though some consumers may still be able to access personalized doses if it’s clinically applicable.
During the company’s quarterly call with investors in February, Hims & Hers said its weight loss offerings will primarily consist of its oral medications and liraglutide. The company said it expects its weight loss offerings to generate at least $725 million in annual revenue, excluding contributions from compounded semaglutide.
But the company is still lobbying for compounded medications. A pop up on Hims & Hers’ website, which was viewed by CNBC, encourages users to “use your voice” and urge Congress and the FDA to preserve access to compounded treatments.
With Tuesday’s rally, Hims and Hers shares are up about 27% in 2025 after soaring 172% last year.
WATCH: Hims & Hers shares tumble over concerns around weight-loss business
Meta CEO Mark Zuckerberg holds a smartphone as he makes a keynote speech at the Meta Connect annual event at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.
Manuel Orbegozo | Reuters
Meta’s head of artificial intelligence research announced Tuesday that she will be leaving the company.
Joelle Pineau, the company’s vice president of AI research, announced her departure in a LinkedIn post, saying her last day at the social media company will be May 30.
Her departure comes at a challenging time for Meta. CEO Mark Zuckerberg has made AI a top priority, investing billions of dollars in an effort to become the market leader ahead of rivals like OpenAI and Google.
Zuckerberg has said that it is his goal for Meta to build an AI assistant with more than 1 billion users and artificial general intelligence, which is a term used to describe computers that can think and take actions comparable to humans.
“As the world undergoes significant change, as the race for AI accelerates, and as Meta prepares for its next chapter, it is time to create space for others to pursue the work,” Pineau wrote. “I will be cheering from the sidelines, knowing that you have all the ingredients needed to build the best AI systems in the world, and to responsibly bring them into the lives of billions of people.”
Vice President of AI Research and Head of FAIR at Meta Joelle Pineau attends a technology demonstration at the META research laboratory in Paris on February 7, 2025.
Stephane De Sakutin | AFP | Getty Images
Pineau was one of Meta’s top AI researchers and led the company’s fundamental AI research unit, or FAIR, since 2023. There, she oversaw the company’s cutting-edge computer science-related studies, some of which are eventually incorporated into the company’s core apps.
She joined the company in 2017 to lead Meta’s Montreal AI research lab. Pineau is also a computer science professor at McGill University, where she is a co-director of its reasoning and learning lab.
Some of the projects Pineau helped oversee include Meta’s open-source Llama family of AI models and other technologies like the PyTorch software for AI developers.
Pineau’s departure announcement comes a few weeks ahead of Meta’s LlamaCon AI conference on April 29. There, the company is expected to detail its latest version of Llama. Meta Chief Product Officer Chris Cox, to whom Pineau reported to, said in March that Llama 4 will help power AI agents, the latest craze in generative AI. The company is also expected to announce a standalone app for its Meta AI chatbot, CNBC reported in February.
“We thank Joelle for her leadership of FAIR,” a Meta spokesperson said in a statement. “She’s been an important voice for Open Source and helped push breakthroughs to advance our products and the science behind them.”
Pineau did not reveal her next role but said she “will be taking some time to observe and to reflect, before jumping into a new adventure.”
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports12 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway