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

Sophisticated AI systems just like OpenAI’s GPT-3 can write prose that is impressively human-like, or at least good enough to fool the average person. They have been used to generate essays, poetry, stories, news reports and more with impressive effect. Perhaps then, it was only a matter of time before entrepreneurs saw an opportunity to leverage such systems to write marketing copies.

Scaling makes AI a great fit for ads. Copywriting is time-consuming work, and AI – being machine-driven – theoretically never stops working. But a bigger advantage is personalization. AI systems can target the ad text to specific segments of customers or even individual customers, causing them to resonate more strongly. At least in theory.

According to a 2021 Phrasee survey, 63% of marketers would consider investing in artificial intelligence to generate and optimize ad text. Admittedly, this is a biased finding – Phrasee sells AI-powered copy generation software. But vendor-neutral analytics firm Statista reports that 87% of current AI users are already using or considering using AI for sales predictions and improving their email marketing.

In any case, investors are positive about the idea. Copysmith last April secured $ 10 million in funding for its “creative content” AI-powered platform. Copy.ai, a rival building of similar algorithm-based copywriting tools for businesses, completed a $ 10 million round in October.

To get to the bottom of the passion for copy-generating technology, TechCrunch contacted partners at VC firms who had invested in startups in the burgeoning area within 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.

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