How ByteDance, Alibaba, and Baidu Harness Generative AI to Optimize Their Advertising Businesses

Chinese technology giants, including ByteDance, Tencent, Alibaba, and Baidu, have been transforming their advertising platforms through the integration of generative artificial intelligence (AI).

Over the past year, each of these companies has launched its own AI marketing tools, revolutionizing advertising content production, optimizing ad distribution channels, and offering decision-making support. These efforts have led to transformative changes in China’s advertising business, contributing to cost reduction and improved efficiency.

AI-Generated Content Surge Reshapes China’s Advertising Landscape

More AI-generated marketing content is reshaping the landscape of the advertising business, with content serving as its fundamental cornerstone, and generative AI demonstrating its prowess in this domain.

In the past year, billions of pieces of content generated by AI in China have infiltrated various online platforms. The majority of internet users may inadvertently come across AI-generated content while using platforms like ByteDance’s Douyin app or Alibaba’s e-commerce platforms.

This content could constitute approximately 5-10% of the overall content, as indicated by the "China AIGC Text-to-Image Industry White Paper 2023″ report.

For content producers, AIGC tools have not only freed up their hands but also significantly increased productivity. AI acts as a lever, amplifying the productivity of individual content producers, thereby effectively reducing labor costs. This has led to a substantial decrease in the demand for professions such as copywriting, design, and video editing.

Taking Tencent Ads as an example, in creating realistic characters, it encompasses and covers over 20 character types, including various genders, ages, attire, and eras. Tencent Ads’ MiaoSi platform can produce a video ad in just 10 minutes, compared to two to three days using real models and live shooting.

During last year’s May Day, Alibaba’s travel platform Fliggy employed AI to create thousands of travel posters, displayed in various city subway stations. The campaign surpassed 150 million views and sparked wide discussions.

Observing the cost-saving impact and the quality of AI-generated content, advertisers are enthusiastic about adopting such tools. Approximately 30% of advertisers are using AI to generate text and images, while 20% are utilizing AI for video creation. The usage rate of AI advertising creativity has reached 25%, according to the "2024 China Digital Marketing Trends Report". Moreover, the proportion of advertisers planning to use AI to generate text and videos exceeds 30%.

AI-Assisted Ad Distribution: Lowering Thresholds, Simplifying Process and Smartening Up Decisions

Advertisers, seeking higher ROI amid cost-cutting measures, face the challenge of placing creative marketing materials effectively. Generative AI is now simplifying this process, with advertising platforms handling complexities, enabling brands to achieve cost-effectiveness through simple operations and limited budgets.

Traditionally, digital advertising involved setting budgets, adding keywords, placing bids, and defining audience targeting, requiring specialized professionals or third-party services.

Generative AI streamlines this, as seen in Baidu’s new ads platform launched last year. Advertisers just need to describe products, target audience, and budget without dealing with keyword bids, simplifying targeted ad distribution.

Another benefit is that ad platforms also integrate search and information flow scenarios, eliminates the need for advertisers to run different ads on the same platform, reducing operational costs.

ByteDance’s Ocean Engine focuses on a global marketing approach, emphasizing AI’s integration into marketing and operational efficiency. From short video live streaming to Douyin Mall in e-commerce, it regulates ads and traffic to expand overall GMV globally.

During last year’s November shopping festival, overall GMV in live streaming services increased by 20% for clients using the global promotion product, showcasing the effectiveness.

Both Baidu and ByteDance’s Ocean Engine leverage AI’s learning capabilities to enhance automation, reduce distribution thresholds, and improve ROI, enabling small and medium-sized businesses without professional marketing teams to participate in digital ads placement.

AI-Enhanced Consumer Dialogue to Optimize the Marketing Process

The advancement in AI marketing lies in its capacity to improve the understanding of human needs through natural language processing.

Historically, platforms heavily relied on gathering users’ personal information and behavioral data to create consumer models. However, human needs are dynamic and constantly evolving.

Intelligent shopping guides now play a crucial role in helping systems better comprehend consumers’ current needs. Through ongoing communication, these guides continuously refine recommendations, significantly lowering consumers’ decision costs.

During last year’s November shopping festival, Taobao and JD.com both introduced their AI e-commerce tools, engaging in direct dialogue with consumers through AIGC.

Taobao upgraded its AI application, Taobao Wenwen, which comprehends user needs across various dimensions like brand preferences, consumer budgets, and feature requirements, providing tailored purchase recommendations.

JD.com, utilizing its Xianxi large-scale model, launched the intelligent customer service Jing Xiaozhi, which, within the first 10 minutes of the shopping festival, amassed over 1.88 million consultations and served more than 360,000 merchants.

The ultimate significance of AI marketing in the transactional phase is still about enabling a conversation between consumers and platforms, akin to the dialogue between advertisers and platforms during the distribution process.

AI marketing strives to deepen understanding of user intent, diminish information asymmetry, enhance communication efficiency, and foster direct interaction between matching brands and consumers. This, in turn, optimizes the entire marketing process.

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