Google VP Jason Spero on meeting the AI moment with action and change

Summary

Jason Spero, the Global Vice President of Product Solutions at Google, discusses the pivotal role of the marketing industry in leading the transition to an AI-powered future. He emphasizes the importance of adapting to changes in privacy regulations and the imminent deprecation of third-party cookies. Spero encourages marketers to reimagine customer engagement, build deeper relationships grounded in trust, and leverage AI combined with first-party data to improve measurement, media targeting, and creative delivery. He shares real-world examples of brands that have successfully implemented these strategies and urges the audience to embrace experimentation, risk-taking, and organizational change to capitalize on the transformative potential of AI in the marketing landscape.

Takeaways

• 😀 This is a pivotal year for the marketing industry as AI starts to become a reality and drive significant changes.
• 🤝 The IAB is leading conversations on important industry changes, from third-party cookies to emerging regulations and AI.
• 🔄 This moment of disruption and change is similar to the mobile disruption of 2010, requiring adaptation and evolution.
• 🧠 AI, combined with first-party data and privacy-preserving technologies like the Privacy Sandbox, will improve and replace many aspects of marketing.
• 💪 Building deep customer relationships grounded in trust and increasing first-party data will be crucial for powering AI models.
• 📈 AI can enable durable, privacy-centric measurement models and fill gaps in data to improve targeting and attribution.
• 📺 AI can help optimize media budgets across channels, target audiences more effectively, and deliver profitable growth.
• 🎨 AI can enhance creativity by generating variations of assets, personalized creative, and virtual try-on experiences.
• 🌱 AI, fueled by first-party data, will become the backbone of the industry as third-party cookies disappear.
• 🤝 The speaker is confident in the marketing industry's ability to adapt and lead the way in this era of AI-powered growth.

Q & A

What was the main topic of Jason Spero's speech?

The main topic was the impact of AI on the marketing and advertising industry, and how marketers need to adapt and evolve to embrace the changes brought by AI.

Why did Jason Spero want to be at the IAB event?

Jason Spero wanted to be at the IAB event because he felt it was an important moment, and the IAB was leading conversations about the most significant changes in the industry, such as the end of third-party cookies, emerging regulations, and the opportunities and challenges posed by AI.

How did Jason Spero compare the current situation to the year 2010?

Jason Spero compared the current situation to 2010 when mobile technology was disrupting the industry. He mentioned that in 2010, there was excitement, anxiety, ambiguity, and a lot of fear and hard conversations, just like the current moment as AI is poised to change the foundation of everything in marketing.

What does Jason Spero believe is necessary to prepare for the end of third-party cookies?

Jason Spero believes that a combination of three things is necessary to prepare for the end of third-party cookies: AI, data, and privacy-preserving technologies like the Privacy Sandbox.

What advice did Jason Spero give to marketers regarding customer relationships?

Jason Spero advised marketers to deepen their customer relationships, build deep customer relationships grounded in trust, make changes to their UX and value exchange with customers, and potentially make changes to their organizations.

Why is first-party data crucial for marketers?

First-party data is crucial for marketers because it will power their AI models and enable them to improve and replace much of what they do today, as they lose other signals like third-party cookies.

How did North Face, Bayer, and Pepsi use their data and AI to improve their marketing efforts?

North Face tripled their conversions by expanding the data in their tags and using it in their media. Bayer doubled their conversions for high-value customers by using their web analytics data for value-based bidding. Pepsi grew their data record by 50% by offering rewards for QR code scans on their packaging, which increased their YouTube sales lift by 37%.

What advice did Jason Spero give regarding media fragmentation and budgets?

Jason Spero advised marketers to focus on delivering profitable growth across the entire customer journey and to avoid waste by eliminating media budget and organizational silos. He suggested giving AI more degrees of freedom to move media to where it performs best, rather than targeting specific channels or audiences.

How did Google Cloud use AI to improve their customer acquisition efforts?

Google Cloud gave audience signals, creative assets, and a goal to AI-powered campaigns like Performance Max, which allowed the AI to find the best-performing places to run media, resulting in more conversions at a lower CPA.

How can AI help with creative assets and personalization?

AI can help with creative assets by editing existing video assets to work for various bandwidths, screen sizes, lengths, and resolutions. It can also create new creative assets like virtual try-on experiences, allowing customers to see garments on different body types, skin tones, and heights. This helps with personalization and engagement.

Outlines

00:00

👋 Welcome and Introduction

The speaker, Jason Spero, welcomes the audience and expresses his excitement to be at the IAB event. He reminisces about his first board meeting at Google and acknowledges the industry's shared challenges. He emphasizes the importance of the IAB's leadership in addressing operational and strategic changes, including the end of third-party cookies, emerging regulations, and the opportunities and challenges posed by AI. He draws parallels between the current changes and the mobile disruption that occurred in 2010, emphasizing the need for adaptation and evolution.

05:01

🎯 Preparing for a Cookieless Future

Jason Spero discusses the need to prepare for the end of third-party cookies in 2024. He advises a three-pronged approach: leveraging AI, utilizing data, and adopting privacy-preserving technologies like the Privacy Sandbox. He emphasizes the importance of building deep customer relationships grounded in trust, which will involve changes in user experiences, value exchanges, and organizational structures. He shares examples of brands like L'Oreal, Nestlé, Adidas, Nike, and Marriott that have successfully built these relationships. He underscores the significance of first-party data as the fuel for AI-powered models and discusses how AI can help fill gaps in measurement and attribution as cookies disappear.

10:03

🚀 Embracing AI-Powered Growth

Jason Spero discusses how AI will change the approach to various aspects of marketing. He emphasizes the importance of quality, consented first-party data in powering durable, privacy-centric measurement models. He provides examples of brands like The North Face, Bayer, and Pepsi that have leveraged AI and their data to improve targeting, conversions, and sales lift. He also highlights the potential of AI to optimize media budgets and eliminate organizational silos, enabling resources to be allocated where they perform best. Additionally, he discusses how AI can revolutionize creativity, enabling personalization at scale through tools like Flip Video, Trim Video, and Virtual Try-On. He concludes by expressing confidence in the industry's ability to build a future powered by AI, despite the changes and challenges it faces.

Keywords

💡AI (Artificial Intelligence)

Artificial Intelligence, or AI, refers to the simulation of human intelligence in machines that are programmed to think and learn. In the context of the video, AI is a central theme, emphasized as a transformative force in the marketing industry. The speaker discusses how AI is shaping new ways to engage customers, improve targeting, and enhance the measurement of marketing campaigns. Examples from the script include AI-powered growth, privacy-preserving technologies, and AI-driven media strategies, demonstrating AI's pivotal role in evolving marketing practices.

💡Privacy Sandbox

The Privacy Sandbox is a set of technologies aimed at enhancing privacy on the web while still providing businesses with tools for advertising and analytics. In the video, this concept is linked to the broader discussion about the need for privacy-preserving technologies in marketing, especially as traditional tracking mechanisms like third-party cookies are phased out. The speaker mentions the Privacy Sandbox as part of the necessary evolution towards more privacy-conscious marketing strategies.

💡First-party data

First-party data refers to the information collected directly from a company's audience or customers, typically through their interactions with the company's websites, apps, or services. The speaker highlights the increasing importance of first-party data in marketing, especially in light of privacy regulations and the deprecation of third-party cookies. By building deeper, trust-based customer relationships, companies can enhance their data-driven marketing strategies.

💡Measurement

Measurement in marketing refers to the processes and tools used to evaluate the effectiveness and efficiency of marketing campaigns. The speaker discusses the challenges of measurement in a privacy-first world and the role of AI in developing new, privacy-centric measurement models. This involves using first-party data and AI to fill in gaps left by the disappearance of cookies, ensuring that marketing remains data-driven and accountable.

💡Third-party cookies

Third-party cookies are tracking codes placed on a web visitor's computer after being generated by a website other than the one they are currently visiting. The speaker addresses the industry's transition away from relying on third-party cookies for tracking and advertising, underlining the urgency for marketers to adapt to new privacy norms and technologies.

💡Personalization

Personalization in marketing refers to the customization of content, offers, and experiences based on individual user preferences and data. The speaker emphasizes the potential of AI to enhance personalization at scale, enabling marketers to deliver more relevant and engaging content to consumers, thereby increasing effectiveness and customer satisfaction.

💡Virtual try-on

Virtual try-on is a technology that allows consumers to visualize how products, especially clothing and accessories, would look on them using digital tools. In the video, this technology is presented as an example of how AI can transform creative processes in marketing, allowing for a more personalized and engaging shopping experience.

💡Creativity

Creativity in the context of the video refers to the generation of new ideas, approaches, and solutions in marketing. The speaker discusses the challenge of maintaining high levels of creativity amidst the demands for volume, velocity, and variation in content. AI is highlighted as a tool that can support and enhance creative processes, enabling marketers to produce content that is both diverse and personalized.

💡Profitable growth

Profitable growth refers to the increase in revenue and market share achieved in a cost-effective and efficient manner. The speaker emphasizes the importance of focusing on profitable growth, particularly in times of economic uncertainty, and discusses how AI can help optimize media spending and targeting to achieve better returns on investment.

💡Consumer behavior

Consumer behavior refers to the study of how individuals make decisions to spend their available resources on consumption-related items. The video touches on how AI is changing the foundation of marketing by influencing consumer behavior, necessitating that marketers adapt and evolve their strategies to meet changing consumer expectations and habits.

Highlights

Jason Spero introduces himself as the Global Vice President Product, Solutions for Google, emphasizing the importance of fun and joy in his work.

Spero highlights the collective struggle with challenges in the industry, sharing a sense of camaraderie and mutual understanding.

Expresses his preference for being at the event over attending CES, underlining the significance of the gathering and the year ahead.

2023 marked as the year the industry began to dream about the potential of AI, setting the stage for 2024 to turn those dreams into reality.

Spero emphasizes the pivotal role of 2024 in embracing change, with the people in the room being the leaders of this transformation.

Calls attention to the urgent need for addressing privacy, third-party cookies, and AI's role in shaping the future of marketing.

Reflects on the disruptive impact of mobile in 2010, drawing parallels to the current potential of AI to transform marketing.

Spero shares his confidence in the industry's ability to adapt and evolve in response to technological changes, based on past experiences.

Highlights the necessity of marketers, publishers, and agencies to reimagine their strategies and embrace new tools in the era of AI.

Urges the importance of building deep, trust-based customer relationships as a key strategy for adapting to changes.

Spero predicts the end of the cookie in 2024, stressing the need for the industry to prepare for this significant shift.

Emphasizes the combination of AI, data, and privacy-preserving technologies as crucial for the future of marketing.

Discusses the potential of AI to enhance measurement, targeting, and creativity in marketing, despite the challenges posed by privacy concerns.

Shares examples of companies like North Face, Bayer, and Pepsi successfully leveraging AI and data to improve their marketing efforts.

Concludes with a call to action for the industry to embrace AI as an enabler for growth, while maintaining the fundamentals of marketing.

Transcripts

SPEAKER: Please welcome the Global Vice President Product

Solutions for Google, Jason Spero.

[APPLAUSE]

JASON SPERO: Hi, everybody.

I'm Jason.

We're Google.

And, David, I was happy you talked

about joy and fun last night and this morning

because I'm having fun.

I had a really good time yesterday

at my first board meeting.

Thank you for having me.

Great time seeing old colleagues in the halls,

having all the conversations that we're having.

And all the content, including the Amazon presentation earlier

today, made me feel like we're struggling

with the same challenges.

And that feels good.

I know some people are all into Vegas and CES.

But I wanted to be here.

I wanted to be here with all of you.

David loved that point.

I wanted to be here with all of you at this moment.

I wanted to be here with you at the beginning

of a really big year.

In 2023, we as an industry, and even beyond our industry,

started to dream about all the promise that AI held.

We thought about that broadly.

And we thought about that for the marketing industry.

And it has the promise of changing so much in marketing.

But in 2024, we need to make that dream

a reality because 2024 is a pivotal year because so much is

changing.

And it's the people in this room that will have

to lead us through that change.

And so that's, David, why I wanted to be at IAB here

with all of you.

And it's an important moment because the IAB is leading us

in a conversation about the things that

are most important to this industry,

from the acute and operational changes

around third-party cookies to the strategic and maybe

slightly longer-term changes that are coming from emerging

regulations, to the enormous opportunity

but maybe a little bit of need for rules

for the road around AI and everything that's coming.

It feels big.

It's a lot.

And it's coming at all of us in the same way.

Things seem maybe less certain but also more possible.

And I guess what I want to say at this moment is I could

easily just as well have put--

I pointed the wrong way-- could just as well have pointed

and put 2010 on that.

And I want you to think for a moment about where

you were in 2010 when mobile was disrupting everything

in this industry.

I had just arrived at Google.

And I was asked to rethink relevance and rethink formats

and rethink measurement and so much more.

And I remember excitement.

But I also remember a lot of anxiety, a lot of ambiguity,

a lot of change, a lot of fear, and probably a lot

of hard conversations at IAB ALM meetings back in the day.

And what I know is that technology drove change.

And technology drove changes in consumer behavior.

And everybody in this room, if we were sitting here in 2010,

had to adapt and had to evolve.

And that's the leadership that we need from this room.

We're in a similar moment as AI is

primed to change the backbone, to change

the foundation of everything that we do as marketers.

And I guess what I want to say at this moment is

you will define the era of AI-powered growth.

We need all of you.

We need marketers to reimagine how they know and engage

their customers.

We need publishers to build ever-deeper relationships

in new ways.

And we need agencies to provide context

and vision and leadership and how

to use new tools for a new time.

It's a change.

It's a big time of change.

And that's hard.

And I want to name that being hard and be real about it.

But I also want to say that we know how to do that.

We've done that before.

It's about experimentation.

It's about risk taking.

It's about thinking about your orgs maybe

just a little bit differently.

And it's about figuring out what works.

Now, part of the reason is that we have to change.

This isn't just something that we

want to do because it is an opportunity,

but it's also a time where we have to change.

We've been having a dialogue about privacy

and third-party cookies for years.

And it's been mentioned on this stage many times already.

But regulators have been clear, both state regulators--

we got an update yesterday.

State regulators and national regulators

have been clear about consent.

And other browsers have already deprecated cookies.

And so we have to take it head on

that 2024 is the year that we'll see the end of the cookie.

And that means that we all need to plan for that moment

and prepare for that moment.

And the advice that I give is that that's

a combination of three things.

First, it's AI.

Second, it's data.

And third, it's privacy-preserving technologies

like the Privacy Sandbox.

And for everybody that's interested, skeptical, wildly

enthusiastic about the Sandbox, I'd

encourage you to show up for my colleague

Anthony Chavez's talk this afternoon.

Help us make that ever better.

And help us build that.

But that's probably all I'll hit on that today.

That's a Chrome thing.

But from my world I want to talk about how

AI combined with your data and our data will

improve and replace so much of what we do today.

That'll mean changes in your UX because the advice that I give

everybody when they ask me about this

is, what is the single biggest thing I can do to be ready?

And that is deepen your customer relationships.

Build deep customer relationships

grounded in trust.

As I said, that's going to take changes in your UX,

changes in your value exchange with your customer,

and so much more.

In many cases, it'll take change to your organizations.

But I'm confident that we can do this because I've

seen brands do this.

I've seen it from L'Oreal and Nestlé,

who don't have traditional ownership of their channel.

I've seen it from Adidas and Nike.

How many people here are staying at Marriott?

How many people have gotten an email

about installing their app?

They told me I needed it for the free Wi-Fi.

It turns out you don't need it for the free Wi-Fi.

But they want you to install it because they

understand the importance of the first-party data.

And I believe that that will work.

So if you have 5% of your audience signed in,

set a company goal and figure out what will it

take to get to 15%.

If you have 30% or 40%, figure out

how you bump that and make it clear to your company

how important that is, whether you're

a publisher, an advertiser brand, or whatever

business you're in, because first-party data will power

our models.

We've talked about gen AI.

It's in the headlines a lot.

But we know so much about how data powers AI because we've

been working with analytical and predictive AI

at the center of our tools for years.

And it's the combination of this tech

that will unlock this opportunity

and, as I said, provide the backbone of what we need.

But at the same time, AI is not a marketer.

AI is a technology.

AI is an engine.

AI is a tool.

You're the marketer.

You're the publisher.

And AI is your enabler as we go on this journey.

Now, so much of what we do as marketers will stay the same.

The fundamentals of marketing, whether that's

insights or targeting, whether that's

the media itself, the measurement and all of that

remain, but it's how we do it that will evolve.

And so that's what I want to talk to you about today

is how AI will change our approach

and give us a different way doing the things that

are required of all of you.

I want to start with measurement.

And the first thing I've said already,

that first-party data is the fuel of AI.

But I want to say this now.

The AI is only as good as the data that we put into it.

But I will tell you, if we have consented,

quality data from users and permission to use it,

that we can build durable, privacy-centric measurement

models for this privacy future.

That will last.

And that's extra important because as cookies go away,

our attribution will break.

And so it becomes a moment where we

need this more than anything.

Now, some of you are sitting there thinking, well,

I don't have coverage of a significant percentage

of my base.

If you have 10%, if you have 30%,

that can fuel these models as well.

AI will fill in the gaps around whatever it is that you have.

And so these techniques of take what

you've got grow that as best you can

and then supplement that with the power of how much AI can

extrapolate is the core of what we're

going to do in measurement.

It'll fuel your media mix models going forward.

And it will fuel the way that you

do audience targeting as well as we lose other signals.

I want to give you three examples really quick of people

who have done this well.

The first I want to talk about, North Face.

North Face tripled their conversions.

They took their tags and expanded the amount of data

that they had in their tags, simply put, and then

turned that around to use it in their media.

And that gave them a tripling in conversions and revenue

from their high value customers because they

understood it better.

They had the consent to use it.

And they were able to use that in their measurement

and in their targeting.

Second, pharmaceuticals maker Bayer

took their web analytics tools and used

that to understand their high-value customers.

They then fed that into AI-powered, value-based bidding

and saw a dramatic increase, a doubling

in how they had conversions for those high-valued customers.

And it did all of that while lowering CPA--

again, a small amount of data fueling, reaching an audience,

and performing better across all of it.

And then lastly, I enjoyed the Pepsi conversation earlier.

Pepsi is thinking about that value exchange

that I talked about earlier.

We've always had activations on packaging.

But Pepsi understood and put QR codes

on their packaging in exchange for rewards,

rethinking value exchange to increase

the number of signed-in users.

And they grew their data record by 50%.

They then can turn around and use that in all of their media.

And on the sliver of that that we

saw on YouTube, that increased sales lift by 37%--

again, using a subset of data, asking how they can use more,

and turning around and using that in many places.

Let's pivot and talk about media as my clock counts down.

No matter what happens with media fragmentation,

and we see so much of it, our job as marketers

is to deliver profitable growth across the entire customer

journey.

And over the last year-- and I heard this in the hallway

a lot--

David's asking everybody about what's happening with budgets--

huge focus on profitability, which

means that anything that's inefficient

is massive waste right now.

And I can share that I see this so much.

One of the biggest areas of waste I see

is media budget and organizational silos,

both because we're repeating things and not deduping,

but also because we're not giving AI,

we're not giving our tools the power to move the media

to where it performs best.

So if you have channel-specific budgets or org silos

or any of these things, think about how

you give more degrees of freedom because this

is where AI does best.

As my daughters would say, let AI cook.

The goal is sort of--

I guess I'd say it this way.

You can continue targeting, and certainly we will,

demographics, audiences, and say, I

want to reach females of a certain age who

are interested in pickleball.

Or you could say, I want to sell my pickleball gear to anybody

that's interested, step back, and let

the media run where it runs to perform best against your goal.

You're going to have less and less signal to do the former.

And the machinery can do the latter better and better

if you give it the goal and let it work backward.

And I want to illustrate that.

I'm going to give a Google Cloud example.

Sometimes it's tricky when we use our own brand

as an example.

Google Cloud, B2B customer who's focused

on customer acquisition-- new customer,

incremental customer acquisition.

And Google Cloud had a bunch of data

and had historically run video and search and display

and everything else with us independently.

But they did what I'm talking about,

is they gave audience signal, and they

ran our AI-powered campaigns, in this case Performance Max.

And they gave a whole bunch of creative and a goal,

and they stepped back and let the AI cook.

And the outcome-- I have to click for it, I guess.

And the outcome is that they drove

a heck of a lot more conversions,

incremental conversions, at a lower CPA

because the media was able to find the places that it

performed better by working at the goal

and coming back backwards.

Lastly, I want to talk about creativity.

Creativity is at the heart of marketing.

But we all know how impossible it

can feel to deliver at the volume, velocity,

and variation that we're all expected

to to be able to deliver personalization.

But the good news here-- and I think a lot of you can imagine

a lot of this--

is that AI is already delivering at a scale and pace that

was unimaginable just a couple of years ago.

We have a tool called Flip Video and a tool

called Trim Video which takes your hero

assets, your best video assets.

They understand where you are delivering your brand value

proposition.

They can get to the heart of that so when they edit it,

they don't edit it out.

But they can then make it work for countless bandwidths,

screen sizes, lengths, durations, and resolutions--

dynamic change to take the assets that you have

and make them work more broadly.

But I know a lot of people are focused also on net new video

creation or net new creative.

AI can also build assets from very little, as you know.

Our take on this is something called virtual try on.

Virtual try on allows you to bring a garment, if you're

a merchant, and have that garment be shown

on an infinite number of body types, skin tones, heights

so that consumers can see-- by the way, all

on real photographed models with the garment overlaid.

Allows everybody to see someone who looks like them

with the garment on them to see the way it hangs,

to see the way it pairs.

This isn't AR.

This is AI developing creative.

And users love it.

Users engage with it more than they would with any ad

that I've seen.

And it increases clicks.

And it increases conversions.

We're incredibly optimistic that AI

can help us build the backbone of our industry

as we lose some of the tools that have been

its foundation for so long.

David talked at the top about revolutions

in retail media and travel media, changes in the living

room.

And AI will have a role in all of that.

The reason I like coming to IAB ALM

is because it's a place that we have a dialogue about where

is our industry going and what are the best tools we have

to achieve that destination.

This is definitely a year of change.

I think you've heard that from others on this stage.

I want to make sure I reinforce that.

But I'm so confident in this moment because of the work

that you and your teams do.

We look forward to building this future with you.

Thank you very much.

[APPLAUSE]

[MUSIC PLAYING]