Is AI a cloak to conceal the biggest cash grab in the history of advertising?

My answer: probably.

It’s clear that technology has value in advertising, and automation through AI/ML has allowed tactics to better target the best user base at the optimal moment in their customer journey, using factors like similar users, contextual signals, and KPIs. However, the inflationary impact of these solutions on advertiser costs is undeniable.

Early last year, Google rushed their AI solutions to market as the Cold War between Alphabet and Microsoft entered a new realm. These solutions included structural consolidation of campaigns and keywords, Broad Match, and PMAX.

It seems like the aggregation of data (consolidating keywords and ad groups) to fuel machine learning has its detractors, and people are going back to single keyword ad groups. Broad Match, depending on whom you speak to, is good but certainly not great. It expands scope but increases CPCs. PMAX and DemandGen seem to be universally disliked in our industry.

All of these tactics are inflationary and have raised the cost floor for advertisers.

The issue with these assertions is that they are extremely difficult to prove with metrics. Broad Match attracts diverse queries, making it difficult to compare against other match types. PMAX placements make it impossible to get a clean comparison against the traditional text and shopping campaigns it has replaced.

But this is just my perspective, and I’m curious about what others think.