The AI Revolution Reshaping China’s Advertising Landscape
Artificial intelligence is transforming the advertising world in China, empowering platforms to generate and distribute ads with unparalleled speed and efficiency. Tech giants like Tencent, Alibaba, Baidu, ByteDance, and Kuaishou are leading the charge, developing AI models capable of churning out vast amounts of ad content with a simple click. These powerful tools are revolutionizing both ad selection and distribution, creating a more targeted and impactful advertising experience.
Lee, a marketing product manager at a popular short video platform, emphasizes the game-changing impact of AI-generated content (AIGC). AI has automated ad creation, allowing systems to pinpoint the most effective content and combine it with optimal bidding and placement strategies.
Personalization is another key advantage. AI tailors ads to individual user needs, creating highly relevant experiences. Shen Chengang, CEO of Meetsocial Group, predicts a future where AI can generate personalized ads in real-time, responding to user interests and product characteristics with laser-like precision.
Facing a slowing internet user base growth and tighter budgets, advertisers in China are seeking maximum return on their investments. AIGC has emerged as a solution, significantly reducing ad production costs. Platforms like Kuaishou have witnessed a dramatic cost reduction in video ad creation, plummeting from over 200 yuan to a mere 0.47 yuan.
This cost-effectiveness has fueled rapid growth in China’s internet advertising market, expanding by 11.8% year-on-year in the first half of 2024, despite weaker consumer demand. Companies like Tencent and Kuaishou have reported surges in ad revenue, driven by the widespread adoption of AI-powered advertising tools.
ByteDance and Kuaishou are leading the charge in AI-driven advertising innovation. ByteDance’s Ocean Engine platform harnesses AI to forecast user interests and generate compelling ad scripts. Kuaishou, on the other hand, has unveiled Kolors, a text-to-image generation model, to enhance its advertising and e-commerce efforts. Nearly 20,000 merchants have already embraced Kuaishou’s AI capabilities for smarter operations.
Tencent’s Hunyuan model enhances consumer intent understanding, while Alibaba’s Alimama platform leverages generative AI to create and match ads with potential customers.
This AI revolution, however, comes with consequences. The number of registered advertising companies in China plummeted in 2023, hinting at the potential impact on jobs. Roles traditionally held by editors and copywriters may be impacted as user-friendly content creation tools become more prevalent.
But new opportunities are emerging. The demand for data analysis skills is surging as AI transforms the advertising landscape. In 2023, nearly half of advertisers had already adopted AIGC technology, a number that has grown considerably in 2024.
While a majority of advertisers acknowledge the limitations of AIGC, recognizing its inability to replace human judgment in critical decision-making, the rapid integration of AI into advertising promises both challenges and opportunities. Concerns over job displacement and creative control must be addressed, but the potential for innovation and efficiency in reaching target audiences is undeniable.
Interview between Time.news Editor and AI Advertising Expert
Time.news Editor: Welcome, everyone. Today, we’re delving into a fascinating topic that is reshaping the landscape of advertising in China — the impact of artificial intelligence. Joining us is Shen Chengang, CEO of Meetsocial Group, who is here to provide insights into how AI is transforming the industry. Thank you for being with us, Shen.
Shen Chengang: Thank you for having me. It’s a pleasure to discuss this exciting evolution in advertising.
Editor: To kick things off, can you elaborate on how AI is changing the way ads are created and distributed in China?
Shen: Absolutely. The use of artificial intelligence in advertising is revolutionary. Platforms like Tencent, Alibaba, Baidu, ByteDance, and Kuaishou have developed incredibly sophisticated AI models that automate ad creation. This means that instead of requiring human input for every single ad, we can now generate vast amounts of content with just a click. This automation not only speeds up the process but also enhances the precision of ad targeting.
Editor: That’s fascinating! It seems that with automation, personalization also becomes a key player. How is AI enabling this level of personalized advertising?
Shen: Great question! Personalization is indeed one of the most significant advantages of AI in advertising. The technology enables us to analyze user data extensively, allowing for tailored ad experiences. For instance, AI can generate personalized ads in real-time, tweaking content based on user interests and specific product characteristics. This level of customization ensures that customers receive highly relevant ads, which can significantly enhance engagement and conversion rates.
Editor: Given the slowing growth of internet users in China and tighter budget constraints, how are advertisers adapting to these challenges?
Shen: That’s a critical point. With a plateauing user base, every advertiser is striving for maximum ROI. AI-generated content (AIGC) has emerged as a game-changing solution. By automating production, companies are experiencing a drastic decrease in ad creation costs. For example, Kuaishou has reduced the cost of producing video ads from over 200 yuan to just 0.47 yuan. This cost-effectiveness has allowed advertisers to stretch their budgets further and become more competitive in a challenging market.
Editor: It sounds like this shift toward AI-driven advertising is having a tangible impact on the market’s growth. Can you share some statistics to illustrate this trend?
Shen: Certainly! China’s internet advertising market has seen a remarkable year-on-year growth rate of 11.8% in the first half of 2024, despite the challenges posed by weaker consumer demand. Companies like Tencent and Kuaishou have reported substantial increases in ad revenue, largely thanks to the widespread adoption of AI tools across the board. This shows that even amidst a slowing economy, innovation through AI can unleash new growth opportunities.
Editor: Lastly, what do you think the future holds for AI in advertising, particularly in China?
Shen: The future looks incredibly promising. As AI technology continues to evolve, I predict we will see even more sophisticated applications that deepen personalization and automation. Imagine a future where ads are not just created automatically but optimized in real-time based on immediate consumer feedback. This could fundamentally change the relationship between brands and consumers, making advertising more dynamic and effective than ever before.
Editor: Thank you so much for your insights, Shen. It’s clear that AI is not just a trend but a transformative force in the advertising industry. We appreciate your time today.
Shen: Thank you for having me. I look forward to seeing how this development continues to unfold!
Editor: And thank you to our audience for tuning in. Stay with us for more on how technology is changing the world.