Why investors see the potential in AI-powered, copy-generating adtech companies – Marketingwithanoy

Advanced AI Systems like OpenAI’s GPT-3 can write prose that’s impressively human, or at least good enough to fool the average person. They have been used to generate essays, poetry, stories, news stories and more with impressive effect. So maybe it was only a matter of time before entrepreneurs saw an opportunity to use such systems to write marketing copy.

Scale makes AI extremely suitable for advertising. Copywriting is time consuming work and AI, as it is machine driven, in theory never stops working. But a bigger advantage is personalization. AI systems can target the text of ads to certain segments of customers or even individual customers, making them more resonating. In theory at least.

According to a 2021 Phrasee study, 63% of marketers would consider investing in AI to generate and optimize ad copy. It’s an admittedly biased finding: Phrasee sells AI-powered copy generation software. But vendor-independent analytics firm Statista reports that 87% of current AI users are already using or considering using AI for sales forecasting and improving their email marketing.

In any case, investors are optimistic about the idea. Copysmith raised $10 million in funding last April for its AI-powered “creative content generation” platform. Copy.ai, a competitor developing similar algorithm-based copywriting tools for businesses, closed a $10 million round in October.

To understand the enthusiasm for copy-generating technology, Marketingwithanoy reached out to partners at VC firms who had invested in startups in the nascent space for the past two years. We spoke with Sandhya Venkatachalam, a Khosla Ventures partner specializing in AI and machine learning startups, and Wing Venture Capital partner Zach DeWitt.

Leave a comment