‘Brands leveraging AI to personalise marketing at scale; may lead to consumer fatigue’
As AI algorithms become more widespread, it may result in implicit price collusion, cautioned Harvard Business School Professor Sunil Gupta at a recent lecture
In a recent lecture for Harvard Business School (HBS), Professor Sunil Gupta spoke about creative ways in which one can leverage AI in marketing and business. His discussion framed around the traditional four P’s of marketing—product, price, promotion and place—highlighted how AI is not only enhancing marketing efforts but also raising important questions about the future of consumer engagement and advertising costs.
“AI has taken the world by storm,” Gupta began, noting, “Lots of people are adopting it, and I’m sure all of you have already tried it in some form or another.” He pointed to the growing investments in AI, noting that recent research by Goldman Sachs forecasts up to $200 billion in AI investments in the near future.
Gupta showcased how AI has been transforming product design, using a collaboration between Nike and French company Obvious Art as a prime example. Nike provided historical data on its Air Max sneakers to Obvious Art, who used generative AI to create a new, limited-edition design. “Once that shoe was launched in a limited edition, the whole inventory was sold out within 10 days,” Gupta said.
Gupta also performed a live demonstration, using ChatGPT to generate names and designs for a hypothetical beauty cream aimed at Gen Z. In real-time, AI tools created product names, packaging designs, and even a promotional jingle, by the song generation AI, Suno. “You can go through multiple iterations if you don’t like the first one,” he explained, emphasizing how this kind of creative speed is now available even to startups and small businesses.
When it comes to promotion, Gupta illustrated how brands are leveraging AI to personalize marketing at scale. Beauty giants like Olay and L’Oréal use AI-powered tools to recommend products based on facial recognition, and companies like Meta and Google use AI to automate ad budget allocation.
However, Gupta cautioned that while AI initially reduces marketing costs, it could lead to consumer fatigue. “As more companies start doing this, consumers will be bombarded with ads. Eventually, the cost of media will go up because the effectiveness of ads will go down,” he warned.
He cited Cadbury’s award-winning AI campaign featuring Shah Rukh Khan and Coca-Cola’s “Create Real Magic” campaign as a case study in AI-driven creativity. Consumers from around the world submitted over 120,000 AI-generated designs for the latter, with the top submissions displayed in Times Square. “Coke saw a 16,000% increase in brand engagement,” Gupta noted, underscoring AI’s potential for global outreach and engagement.
