AI-Driven Advertising: How Meta and TikTok Are Redefining Success Metrics for Brands?

Meta's New AI Tools Drive Advertising Success

Meta, the parent company of Instagram and Facebook, has revealed that advertisements created with the help of generative AI significantly outperform traditional ads.

In a recent presentation, the tech giant disclosed impressive statistics: advertising campaigns leveraging its generative AI features have achieved an 11% higher clickthrough rate and a 7.6% higher conversion rate compared to their non-AI counterparts.

Over the past month alone, more than one million advertisers, including major firms like Tinuiti and Dentsu, have utilised Meta’s AI ad tools, resulting in the creation of an astonishing 15 million AI-generated ads.

Meta has received enthusiastic feedback, particularly regarding its text variation feature.

This innovative tool allows marketers to produce numerous versions of a marketing message tailored to different audiences.

Tak Yan, VP of product management within Meta’s Monetisation AI team, highlighted the creative struggle many copywriters face:

“If you talk to any copywriters, they would love to spend time crafting that one perfect line of copy; they do not like rewriting the same copy 40 times for 40 different apps.”

This capability streamlines the advertising process, enhancing creativity and efficiency.

The Emergence of AI in Video Advertising

Yan also announced the testing of two new AI-powered tools specifically designed for video ads.

The first, Video Expansion, allows advertisers to adjust the aspect ratio of their videos and generate additional imagery to fill in empty spaces.

For instance, Casetify, a smartphone case company, successfully transformed a horizontal video into a vertical format suitable for Instagram.

Source: Meta

The second tool, Image Animation, enables brands to create short animations from static images, enhancing the visual appeal of their ads without incurring additional costs.

Source: Meta

Ipsy, a makeup brand, effectively repurposed its older assets into engaging social media ads using this tool.

Both Video Expansion and Image Animation are set to roll out gradually over the coming months, with broader availability anticipated by early 2025.

As users scroll through their feeds, they will likely encounter video ads edited with AI, showcasing Meta’s commitment to innovation in advertising technology.

TikTok's AI-Driven Strategy: A New Era in Advertising

Not to be outdone, TikTok is also embracing AI in its advertising approach.

On 7 October 2024, TikTok officially launched Smart+, an AI-powered advertising tool that simplifies the campaign management process.

This tool automates everything from creative development to targeting and optimisation, allowing marketers to focus on driving conversions and leads with less manual effort.

TikTok’s AI, trained on successful ad campaigns, promises faster results while still allowing marketers the flexibility to control various stages of the ad process.

Adolfo Fernandez, TikTok’s director of global product strategy and operations, explained the efficiency of Smart+:

“No more weeks of guesswork and endless A/B testing.”

Advertisers can expect a 53% improvement in return on ad spend when optimising web campaigns using Smart+.

Source: Tiktok

A beta campaign run by Ray-Ban demonstrated this effectiveness, reducing acquisition costs by 50% and boosting conversion rates by 47%.

Meta vs. TikTok: Who Reigns Supreme?

While both Meta and TikTok leverage AI to enhance their advertising strategies, there are distinct differences in their approaches.

Meta has a well-established reputation for delivering effective ads, with projected worldwide ad revenue of $154.16 billion by the end of 2024, set to grow to $173.92 billion by the end of 2025, according to eMarketer.

In contrast, TikTok is still catching up, with its global ad revenue expected to reach $22.32 billion by the end of 2024, increasing to $28.42 billion by the end of 2025.

TikTok's strategy focuses not only on immediate results but also on the broader business impact.

David Kaufman, TikTok’s global head of monetisation product and solutions, emphasised this shift, stating that TikTok aims to evolve from a media partner to a true business partner for its advertisers.

This aligns with TikTok's objective of demonstrating its effectiveness beyond just driving short-term sales.

The Future of Advertising with AI

As both Meta and TikTok increasingly incorporate AI into their advertising strategies, they set the stage for a transformative shift in how brands engage with consumers.

Meta’s generative AI tools streamline ad creation and enhance targeting, while TikTok’s Smart+ focuses on automating the campaign management process.

Each platform presents unique strengths, appealing to different types of marketers.

Ultimately, the competition between Meta and TikTok in the realm of AI-driven advertising may redefine industry standards, paving the way for new approaches to digital marketing in 2024 and beyond.

As advertisers weigh their options, both platforms are likely to continue evolving, vying for dominance in a rapidly changing landscape.