AI reduces advertising costs, should not be considered additional expense: GroupM's Atique Kazi

Addressing the pivotal hurdles in performance marketing, Atique Kazi, President of Data, Performance and Digital Products at GroupM, emphasised brands must realise that performance marketing can be costly if not done in a sustainable manner. 

Kazi stressed that in fiercely competitive markets, prolonged investment in acquiring users inevitably drives up expenses. He advocated for a sustainable strategy wherein brands allocate budgets judiciously, prioritising organic returns. 

Speaking with BestMediaInfo, Kazi said, "The longer you spend money acquiring users in a competitive market, the more expensive it becomes."

Kazi explained how GroupM’s This Year Next Year (TYNY) Report 2024 contributes to the industry's understanding and adaptation to evolving trends. 

He said, "One approach is to consider these topics/trends from multiple angles. Currently, sellers, buyers and marketers each have their own viewpoint. We aim to foster a connected mindset to understand the implications for the brand - whether positive or cautionary. Simplifying technology and making it relevant to marketers is our goal.”

On being asked how brands can master the attention economy through data and performance, Kazi highlighted, “I believe a couple of key points stand out. There's an abundance of available data, particularly regarding digital consumer behaviour. With numerous touch points now accessible, they collectively paint a picture of the consumer's journey and considerations.”

However, this data often exists in separate silos, posing a challenge. Additionally, data privacy regulations add another layer of complexity. Therefore, it's crucial for brands to establish a robust data structure that allows for interoperability between different datasets to enhance enrichment effectively, Kazi said. 

Furthermore, he mentioned, “If I rely solely on marketplace data instead of considering media consumption touchpoint data, it won't provide a comprehensive picture. These data points are interconnected, highlighting an area where marketers should prioritise focus. Additionally, attention planning based on data and technology integration is crucial. The sheer volume, velocity and variety of data require technology to organise and extract value from it effectively.”

“I believe that intersection is crucial. For instance, consider e-commerce marketplaces. These platforms typically have millions of users engaging with hundreds of products monthly. Users may be commenting, monitoring sentiments, comparing prices and more. It's not enough to merely categorise users and proceed. Real-time decision-making is essential. These data signals prompt the right decisions, driving performance,” he added. 

While elaborating on the impact of the rise in programmatic buying on digital platforms’ ad revenue, also whether it will act as a buoyant force for their growth or something that deters growth, Kazi said that he strongly believes that programmatic advertising serves as a buoyant force, ensuring that each impression receives its due recognition. 

“No two impressions are alike, considering factors like viewer behaviour, sentiment and market phase. Programmatic automation allows for data overlay, real-time measurement, and informed decision-making, enhancing the advertising ecosystem rather than degrading it,” he added. 

Furthermore, Kazi also explained how automation is impacting different functions of marketing and advertising and the major challenges he sees in that area. 

“Fragmentation presents numerous complexities across different mediums, leading to the necessity of automation. Automation plays a pivotal role in various aspects, particularly in campaign management. With automation, setting up campaigns, even with intricate targeting parameters like multiple states and diverse cohorts, becomes streamlined, sparing traders from hours of manual work,” Kazi said. 

He emphasised that automation aids in measurement and analytics, providing valuable insights into performance across different areas, notably in e-commerce.

“Centralising data from various sources eliminates the need to navigate multiple silos, offering a comprehensive view of media campaigns across platforms. Without automation, the reliance on manual processes consumes excessive time, diverting focus from crucial decision-making tasks. Ultimately, automation streamlines data collection, formulation, and formatting, offering significant time-saving benefits,” Kazi added. 

On being asked how brands can minimise the upfront cost of AI implementation, Kazi pointed out that AI is supposed to reduce advertising costs while maximising results. Therefore, it's not considered an additional expense, but rather a tool used if it proves effective. 

“For instance, AI aids in targeting audiences more effectively by predicting user behaviour. It also assists in achieving desired frequency levels for ad impressions. Additionally, AI contributes to generative creative processes. Ultimately, if the cost of AI doesn't generate a positive outcome, it's seen as an expense,” he added. 

Highlighting the key performance marketing trends and challenges, Kazi said that performance marketing can get costly if not done in a sustainable manner. 

“The longer you spend money acquiring users in a competitive market, the more expensive it becomes. A sustainable approach for brands involves allocating budgets more wisely, focusing on organic returns,” Kazi said. 

“By investing in upper and middle funnel strategies with targeted budgets, brands can reduce performance costs. It's not just about acquiring users, it's about retaining them and fostering recurrence. Therefore, the economics of user acquisition are crucial considerations,” he added.

Kazi, while explaining how GroupM is helping brands in the scenario when privacy constraints are forcing practitioners to re-evaluate data models, said that there are multiple areas to consider and at GroupM, they have a robust data practice that spans various aspects.

"This includes advising on data architecture to ensure it meets their needs, consulting on first-party data collection methods, and federating data to gain insights into users. Additionally, we provide guidance on Data Management Platforms (DMPs) and integration methods. However, what truly matters are the practical applications. We collaborate with brands to develop use cases and seamlessly integrate them with media and communication touchpoints," Kazi said. 

"We are one of the first agencies with a data clean room, enabling two datasets to interact without passing through a company's infrastructure. These areas are where we focus heavily on utilising data and ensuring proper data learning techniques," he added. 

Info@BestMediaInfo.com