Why Ad Tech’s AI Revolution is Just Rebranded Automation – News Round Up: 08/29-09/05

by Jeff Licciardi

AI in Advertising Isn’t Revolutionary—It’s Just Automation With a Marketing Budget – News Round Up: 08/29-09/05

The advertising industry has found its new favorite buzzword, and surprise—it’s the same one everyone else is using. “AI” has become ad tech’s get-out-of-irrelevance-free card, with every platform, agency, and martech vendor slapping the label on features that look suspiciously like the automation tools we’ve had for years. This week’s news cycle revealed a uncomfortable truth: when you strip away the hype, most “AI-powered advertising” is just rule-based automation with better PR and worse margins.

The pattern is everywhere once you start looking. Marketers are warming to AI, sure, but they’re also running headfirst into the same creative limitations and legal risks that plagued every previous wave of advertising automation. Meanwhile, the actual ROI from AI initiatives remains concentrated in mundane operational improvements—the same efficiency gains we’ve been chasing since programmatic buying became standard.

The AI Rebranding Industrial Complex

Let’s start with what’s actually happening versus what’s being sold. Ad tech companies and agencies are racing to position themselves as AI leaders, but when you dig into the implementations, you’re mostly looking at sophisticated targeting algorithms and automated optimization—things that have existed in various forms since the early 2010s. The difference now? The models are trained on larger datasets and the interface might spit out creative variations. Revolutionary? Hardly.

Even more telling is OpenAI’s sudden pivot into advertising. The company that once positioned itself above the corrupting influence of ad dollars has discovered that, shock of shocks, advertising is where the money lives. This isn’t a change of heart—it’s a recognition that monetization beats idealism when venture capital runs dry. The company’s move from “hatred to hiring” in the advertising space is less about AI’s transformative potential and more about the reality that even the most advanced language models need a business model.

Google’s launch of AI Mode ads perfectly encapsulates this rebranding phenomenon. Strip away the AI positioning, and you’re looking at another iteration of dynamic search ads with natural language processing. Useful? Absolutely. Revolutionary? Only if you’ve forgotten the past decade of ad tech development.

Retail Media’s Reality Check Arrives

While AI dominates the narrative, retail media is experiencing something more interesting: actual market maturation. The easy dollars are gone, and the sector is facing new tests that reveal which players built sustainable businesses versus which ones rode a hype cycle.

The data tells a sobering story. Advertisers are going all-in on full-funnel retail media, but they’re also discovering that there’s a point of diminishing returns. When every retailer launches a media network, and every media network promises closed-loop attribution, the competitive advantage evaporates. We’re watching the same commoditization cycle that hit display advertising, search advertising, and social advertising before it.

What makes this particularly relevant to the AI discussion is how retail media networks are scrambling to adapt to the ChatGPT era. The panic is palpable: if consumers start using AI assistants to make purchase decisions, does the retailer’s owned-and-operated media empire become irrelevant? The fear is warranted, but it also reveals how shallow the “revolutionary” claims about both AI and retail media have been.

CTV: The Last Channel Standing

If there’s one area where genuine growth continues, it’s Connected TV—though even here, the innovation is more evolutionary than revolutionary. CTV will keep growing in 2025, driven not by technological breakthroughs but by the continued secular shift from linear television.

Q3 earnings from the TV industry confirm what we already knew: streaming is eating linear’s lunch, and advertisers are following audiences. The AI angle that vendors are pushing—dynamic ad insertion, predictive audience modeling, automated creative optimization—is real, but it’s also just catching up to what digital advertising has offered for years. We’re not witnessing revolution; we’re watching television finally get the targeting and measurement capabilities that display ads had in 2015.

The Real Innovation Hiding in Plain Sight

Here’s what actually matters in this week’s news cycle: while everyone chases AI headlines, the meaningful innovation is happening in unglamorous infrastructure improvements. Better measurement standards. More transparent attribution models. Interoperable identity solutions. These aren’t sexy, they won’t generate conference keynotes, and they definitely won’t attract venture funding with 100x return promises.

The companies that will win the next five years aren’t the ones with the best AI pitch decks—they’re the ones solving actual workflow problems, reducing operational friction, and delivering measurable efficiency gains. That might involve machine learning models, or it might involve better API documentation. The technology is secondary to the outcome.

This matters because the industry is at a crossroads. We can continue the hype cycle, rebranding incremental improvements as revolutionary breakthroughs, or we can have honest conversations about what technology actually delivers. Elon Musk’s AI-led Grok future for X advertising sounds impressive until you remember that X’s advertising business has been hemorrhaging revenue regardless of technological sophistication.

What This Means Going Forward

The AI revolution in advertising is real, but it’s not what’s being sold. The actual transformation is quieter, more incremental, and far less dramatic than the keynote presentations suggest. Companies that recognize this—that invest in genuine operational improvements rather than AI theater—will build sustainable competitive advantages. Those that chase the hype will end up with expensive tech stacks that deliver marginal improvements at premium prices.

Watch for the pattern: when everyone is shouting about revolution, the real money is usually in evolution. The ad tech graveyard is full of “revolutionary” platforms that forgot this lesson. The survivors are the ones that made automation incrementally better, year after year, without needing to rebrand it every eighteen months.

The question for marketers isn’t whether to adopt AI—that ship has sailed. It’s whether to buy into the revolutionary narrative or focus on the evolutionary reality. One leads to inflated budgets and underwhelming results. The other leads to steady efficiency gains and sustainable competitive advantage. Choose wisely.

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