The First Proven Application of AI.

Author | Zhou Yao

As 2024 draws to a close, generative AI remains a topic of intense focus. Amidst the buzz around ChatGPT, Doubao, and various other AI agents, and despite the commercialization challenges faced by many AI enterprises, there's one sector quietly transforming the industry like a stealthy "elephant"—AI marketing.

As the primary profit model for Chinese internet companies, marketing is again leading the charge in the AIGC wave. According to online survey data from iResearch Consulting, over 93% of advertisers have adopted AIGC technology to aid in creative content production.

Since 2024, internet platforms such as Meta, Google, Alibaba, ByteDance, Kuaishou, and others, both domestically and internationally, have continuously upgraded their large AI models while also using AI technology to enhance the efficiency of ad generation and placement.

YouTube, a subsidiary of Google, reported a 12% year-on-year increase in third-quarter advertising revenue. Its Chief Business Officer, Philipp Schindler, stated that AI is improving YouTube's recommendation functionality and efficiency.

Kuaishou's AI creative production platform, "Magnetic Creation," generates over 100,000 short video materials daily, showcasing the widespread application and effectiveness of AI technology in the commercial realm.

Alipay also recently announced the launch of an independent AI creative generation platform, "Alipay Creativity," providing services such as AI-generated creative materials and intelligent advertising analysis for businesses and institutions.

Relevant data shows that over the past year, Alipay has fully applied AI across its commercial ecosystem, generating 87 million AI materials for businesses and institutions, with a 4.74% increase in click-through conversion rates for AI-generated ads.

Alipay Launches AI Creative Generation Platform, "Alipay Creativity"

While AI has gained significant popularity this year, its implementation has proven challenging. However, in the field of advertising and marketing, AI is quietly approaching the ultimate dream of advertisers—drastically reducing the production cost of AI ads while significantly improving ad placement efficiency for faster, cheaper, and more efficient operations.

01

AI Marketing: Millions of Businesses Are 'Voting with Their Feet'

For decades, technological changes have driven transformations in business marketing. Initially, the advertising industry relied on traditional media such as newspapers and television, which had limited reach and difficulty in measuring effectiveness.

With the rise of the internet, advertising began to digitize, enabling precise targeting and personalized placement. Then, in the mobile internet era, the rise of short video platforms and the introduction of algorithms further transformed the entire advertising industry.

Today, market competition is increasingly fierce, and enterprises need to continuously seek new competitive advantages. At the same time, the trend of consumer "fragmentation" is becoming more pronounced, making it increasingly difficult for traditional marketing to reach target users.

The application of AI technology may bring about new changes—making ad creation more effortless and intelligent while also making placement more precise and efficient. Furthermore, it can profoundly influence a company's marketing strategy and the connection between brands and consumers.

This is why both domestic and foreign enterprises are focusing on AI marketing—for example, Alimama has launched "Wanxiang Lab," an AIGC creative platform tailored for businesses.

Douyin has also introduced an e-commerce intelligent creation platform, "Instant Creation," which utilizes AI digital humans, AI video scripts, AI live backgrounds, and other tools to help short video and Douyin e-commerce practitioners improve their creative efficiency.

Douyin's "Instant Creation" is Known as the Merchant's AI Toolkit

While many AI products struggle with user acquisition, implementation, and profitability, the application of AI in the marketing industry is proving its worth. Driven by the need to reduce customer acquisition costs and improve marketing efficiency, internet enterprises and businesses are choosing to embrace the wave of AI-driven change.

The results of these attempts have been positive. Over the past year, 1.13 million small businesses have used Alipay's AI creative poster mini-program to create AI posters for their stores. Compared to traditional advertising design costs, which can easily exceed hundreds or even thousands of yuan, AI technology can help small businesses save at least 500 yuan on billboard costs.

A Hangzhou Small Business Owner Creates a Poster Using Alipay's AI Tool

This year, Alipay's digital promotion platform, "Light," announced the launch of AI advertising creativity and other features, which have quickly covered nearly 70% of intelligent placement scenarios; in March, Pony Ma, Chairman and CEO of Tencent, also mentioned, "Improvements in advertising AI models have significantly enhanced the effectiveness of precision placement."

In May, Meta introduced a series of new generative AI advertising tools. Within less than half a year, Meta CEO Mark Zuckerberg stated that over one million advertisers have used AI to generate over 15 million ads. According to Meta's estimates, businesses using its image generation technology have seen a conversion rate increase of approximately 7%.

These data have strengthened businesses' trust in AIGC technology. The discussion around the proposition of "AI reshaping future marketing" is shifting from "whether to do it" to "how to do it."

02

AI Reduces Costs and Increases Efficiency

Simplifying Merchant Marketing and Placement

Why is advertising and marketing the first proven application scenario for AI?

Firstly, it can help businesses "reduce costs." AI can provide businesses with inclusive, high-quality, and low-threshold AI creative content, saving significant production costs.

Since its launch in June last year, Alimama's "Wanxiang Lab" has served over one million businesses, generating hundreds of thousands of images and videos. The domestic beauty brand Pechoin, for example, used to spend around 3,000 yuan and seven days to create a single ad. AI tools can reduce this cost to nearly zero and cut the time in half.

After Alipay launched "Alipay Creativity," it also aimed to streamline the previously lengthy content creation, placement, analysis, and optimization processes in the e-commerce industry.

For many e-commerce businesses, the main image and title are crucial for attracting consumers to click through to the product details page. However, under the traditional model, creating the main image and title is time-consuming and labor-intensive, especially during promotional holidays.

"Alipay Creativity" addresses these pain points—after businesses log in to the website (idesign.alipay.com) and apply for use, they can select appropriate templates, edit images and copy, or tell the AI assistant their personalized needs. It only takes a few steps to create a poster.

"Alipay Creativity" Provides Businesses with AI Poster Creation Tools

In addition, similar scenarios such as AI image optimization, line drawing coloring, and artistic font generation can all be satisfied through the AI capabilities of "Alipay Creativity."

Beyond cost reduction, AI can also "increase efficiency" for businesses, making ad placement smarter and more efficient.

Since implementing new models earlier this year, Meta's advertisers have seen a 2% to 4% increase in conversion rates in certain market segments.

During this year's Double 11 shopping festival, Taobao's AI product, Business Manager, served 4 million businesses, helped small and medium-sized businesses generate over 100 million products and marketing materials, and conducted over 2 million data traffic analyses for over 800,000 businesses.

Mr. Huang, a retired high school chemistry teacher who has become a Taobao store owner, finds Business Manager invaluable. He uses it four or five times a day to analyze data, understand operations, and conceive copywriting ideas, improving overall operational efficiency by 30%.

Taobao's AI "Business Manager" Can Analyze Business Data for Merchants

Alipay's "Alipay Creativity" also provides intelligent services for AI creative insights. In this process, AI acts as a professional marketing consultant, analyzing and evaluating materials. In aspects such as visual attractiveness, copywriting appeal, and matching with the target audience, the large model can precisely provide targeted optimization suggestions.

Alipay Provides AI Diagnosis and Suggestions for Merchant Ads

The transformative power behind these products lies in the democratization brought by AI. As AI technology integrates into the internet, both large chain enterprises and street vendors can enjoy the creative convenience brought by technology.

Enabling AI to penetrate various industries is something that internet platforms can and should do. Taobao, with millions of stores, makes it easier for online merchants to do business; Alipay, serving over 80 million merchants, allows offline stores to create creatives with just a few taps; and Douyin and Kuaishou's AI tools empower billions of creators with imagination, making content and advertising creation more efficient and convenient.

Looking back at the wave of AI development over the past two years, we see a mix of blossoming and struggles, rapid advancements in AIGC technology, and many bottlenecks in its application.

Leveraging AI's advantages in the field of marketing and more pragmatically applying AI in areas closest to users, revitalizing platform service ecosystems with AI, is also an imaginative and commercially logical path of exploration.

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