Australian marketers are being urged to pay closer attention to where the AI powering their campaigns is hosted, as cost, privacy, performance and sovereignty become increasingly important considerations.
David Keane, managing director, co-founder and CEO of Australian AI platform SCX.AI, has warned CMOs can no longer treat AI infrastructure as an issue solely for their IT teams.
“One of the big questions CMO’s should be asking is whether the campaign they’re running has a connection with the Privacy Act,” he told B&T during the TechLeaders conference in Bowral on Sunday. “If they’re collecting data from people and they’re processing those people’s data, there are issues with the Privacy Act.”
Keane said marketers must to know what happens to customer information once it enters an AI system.
“Ultimately, CMOs need to make sure that whatever they’re doing with AI is not getting them into a regulatory problem,” Keane said. “Nobody wants to be the next Optus.”
Keane argued that the consequences of poor data governance extend well beyond a technology department, with potential implications for brand reputation and the bottom line.
“Nobody wants that on their brand, because the CMO is going to be worried that one day something goes wrong with their AI and they’ve leaked customer information to some overseas service,” he said.
But sovereignty is only one part of the equation, according to Keane.
As AI usage moves from experimentation into day-to-day marketing operations, he believes CMOs also need to pay much closer attention to cost and performance.
“I think they’ll want to know,” he said. “Cost is a part of it, sovereignty is a part of it, performance is a part of it. It’s all really important.”
That is partly because marketers are moving from using AI occasionally to running large volumes of AI-powered tasks.
Keane described this as a shift from hitting “one nail a week” to hitting “1,000 nails a day”.
“When they were using the sledgehammer, and it didn’t matter because they weren’t hitting many nails. You’re hitting one nail a week, use the sledgehammer,” he said.
“Suddenly, you’re hitting a 1,000 nails a day, it’s expensive to keep using the sledgehammer.”
His message comes after a recent interview with ACAM co-founder Douglas Nicol and Kantar Australia executive group director Karin Du Chenne where the pair warned marketing leaders against what they describe as “jackhammer AI syndrome” — using powerful, expensive AI models for simple tasks.
‘You don’t drive the Ferrari to the shops to get the milk’
Keane said marketers need to develop the ability to select “the right model for the right task”, rather than automatically using the most powerful — and expensive — model available.
“You don’t drive the Ferrari to the shops to get the milk,” he told B&T.
The problem, he argues, is that businesses have historically had little reason to scrutinise compute costs while AI was being used experimentally.
“If you’re driving the Ferrari or using the sledgehammer, and someone’s given you the sledgehammer and no one’s asking how much you’re spending on it, and it doesn’t really matter, you may as well use the sledgehammer,” Keane said. “But suddenly, you’re hitting a 1,000 nails a day.”
He believes this is where the concept of “Claude shock” comes in — the surprise businesses can experience when the bill arrives after scaling up usage of expensive AI models.
“If I’m writing copy for a new drink promotional campaign, I don’t need a model that can do brain surgery,” Keane said. “I can find a much more cost-effective one.”
That shift also means CMOs need greater visibility over the tools being used across their marketing teams.
Keane believes the era of a “free-for-all” approach to AI is coming to an end as usage becomes material to business costs.
“At the end of the day, a CMO’s job is to return value to the shareholders of the company they work for,” he said. “If they’re just spending willy-nilly on stuff, that’s not an efficient use of capital.”
Is AI video the next big thing?
The bigger change, however, may be what AI does to the way marketers actually create campaigns.
Keane highlighted the use of AI-generated video within campaigns, with SCX.AI preparing to offer access to multiple AI video models through a single endpoint.
He believes the technology could eventually fundamentally reshape the agency production model.
“At some point, AI video will replace a digital agency,” he said.
“Consider a brand manager developing a new drinks campaign. Rather than spending weeks producing several concepts to present to a CEO or client, AI can be used to create multiple versions within minutes.”
The technology does not need to be perfect for that to be useful, he argued. Its value is in allowing marketers to explore ideas visually before deciding which concept deserves a full production.
“I think in six months the concept of AI-generated video is going to be so good that it will be production quality,” he said.
“If you’re an internal marketer working for a brand or you’re an agency director, very often you do want to explore different ways you could present a story,” he said. “Is the drink can coming out of the water? Is it diving off an airplane? You can now experiment with these things.”
He believes this next chapter of AI video could see brand managers and agencies becoming “faster and more creative than ever”.
