AI is driving the cost of content to $0

November 10, 2021

AI is driving the marginal cost of content to $0. It's obvious that this is a good thing for businesses. What's not obvious is that it's a good thing for the creator economy too, at least in advertising.

Most advertisers today treat creative work as one task. Hire agency, shoot, edit, launch. Do it again for the next campaign. This has worked for a long time, but it doesn't work any more. If you're an advertiser doing it the old way, it probably feels like it isn't working.

In the world of digital advertising, which is to say most advertising, it's winner-take-all. 9 in 10 ads fail to perform. The 1 winning ad could be worth millions in revenue. The 9 losing ads are worth nothing.

This means a few things:

  1. Brands should be testing 10x more ads than they are
  2. 90% of ad creation costs are wasted

The way this is playing out, at least among early adopters, is that creative work is becoming decoupled into two tasks - asset creation (which is an investment) and ad creation (which is a factory).

Asset creation

Asset creation means things like beautiful photography, brand stories, rich product video, 3D renders and influencer testimonials. Highly skilled creative work done by highly skilled humans with a camera or specialised software. Once created, assets are usable again and again and in a variety of places. The more skill involved, the more the investment in assets is worth. Businesses... invest in creators.

But assets aren't enough. Assets don't directly generate revenue. For this, businesses need ads.

Ad creation

Ad creation means Facebook ads, TikTok ads, Google ads. Each ad must be different - it doesn't make sense to test ads that are all the same. They are worth nothing unless they perform. As what performs changes every day, and nobody really knows what'll perform anyway, even the average business needs ads in vast quantities and at low cost. The best businesses are the ones who figure out how to use data and automation to tip the odds in their favour. Businesses... build a factory.


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