AI is Coming For Your Agency

Will AI replace your marketing agency?

That’s the question that my friend,?Chad Johnson, and I were discussing around the impacts AI is making happen in marketing right now.

It’s an honest question because with the recent explosion of adoption of generative AI tools, including ChatGPT, agencies are already using AI tools and accelerating the adoption of AI-integrated offerings. Why? AI has the potential to transform the way that businesses and agencies operate, leading to increased efficiency, accuracy, personalization, and innovation. Whether it excites you or scares you, it’s impossible to ignore that AI has officially entered the mainstream.

While brands could be slow to adopt AI with internal discussions of defensive measures and blocking access to AI tools in order to reduce exposure of internal sensitive data, customer PII and proprietary information, agencies that are employed by brands, for creative, media, strategy, and other marketing activities, are racing to adopt AI technology to level up their services, reduce costs, increase margins, and accelerate opportunities.

But will AI?replace?your marketing agency?

Here’s what we know AI is doing now:

AI Creates Efficiencies

AI is already creating efficiencies for marketing agencies, and their clients, assisting with:

1. Content creation:?Probably the first and most obvious use case, generative AI algorithms can be used to create a wide range of media content, including text, images, and videos. This can help media agencies automate the content creation process and produce high-quality content more quickly and efficiently than before. From SEO keywords to articles to outlines for presentations to briefs, generative AI is able to shorten the path and accelerate the ideation process.
2. Personalized advertising: With the help of generative AI, media agencies can create highly personalized advertising campaigns that are tailored to the preferences and interests of individual consumers. Developing personas and then using these personas to personalize campaigns and creative can help to improve the effectiveness of advertising and drive better results for clients.
3. Targeting:?Generative AI can also be used to analyze vast amounts of data and identify patterns and trends that can help media agencies to better target their advertising campaigns. This can help to ensure that advertising is delivered to the right audience at the right time, improving the overall effectiveness of campaigns.
4. Placements and Optimization:?AI can help with ad placement and optimization, which saves time and reduces the need for human labor,?and?helps better understand the effectiveness of your programs, ultimately to fine-tune your campaigns and show better results faster.
5. Data analysis:?Media agencies can use generative AI to analyze large data sets and identify insights that can help inform their strategies and decision-making processes. This can help to improve the accuracy and effectiveness of media planning and buying, leading to better results for clients.
6. Lead generation:?AI can analyze large amounts of data to identify potential new business leads more efficiently than traditional methods. For example, it can analyze social media activity, website traffic, and other online interactions to identify companies that may be interested in advertising services for lead generation.
7. Marketing automation:?AI can be used to automate certain marketing tasks, such as email campaigns and social media posting, freeing up agency staff to focus on other tasks.
8. Predictive analytics:?AI can help ad agencies predict which advertising campaigns are likely to be successful, based on factors such as historical data, consumer behavior, and market trends. With machine learning algorithms, AI can analyze massive amounts of data to provide insights that would be difficult or impossible for humans to discover. AI is usually more efficient than humans, resulting in significant time (and cost) savings.
9. Customer Service:?AI-powered chatbots can help ad agencies engage with potential new clients and answer their questions, even when agency staff are not available. Or they can develop AI-powered bots for clients looking to save time and money on customer service representatives.

AI Will Reduce the Quantity of Lower-Level Tasks

Don’t want to do it yourself?

You can hire AI interns, like Codeword, a tech marketing agency that?announced two AI “interns” as part of its winter 2023 internship class in January. The interns, named Aiko and Aiden, have since worked on decks, web copy, graphics, branding research, and the agency’s quarterly zine, according to Kyle Monson, a founding partner at Codeword. Not to worry, though: there’s plenty they don’t do yet, including client-facing work. Yet.

“The most important thing to me is that we’re using humans to do human work and we’re using robots for what robots are best at,” Monson told Marketing Brew. “We’re not using humans to do what robots are good at or using robots to do what humans are good at, because that doesn’t make sense.”

While they may not yet be client-facing, except in the chat box, generative AI has the potential reduce or even completely take over these lower-level tasks, which also indicates that these roles may no longer be required - freeing up agency payroll for managing AI productivity and shifting focus to more ownable activities.

AI Will Enable Teams to Go Faster

Akash Nigam, the founder of Genies —?the $1 billion avatar tools company?used by celebrities like?Justin Bieber?and?Cardi B?— is spending $2,400 a month on?ChatGPT Plus?accounts for all of his 120 employees as part of an experiment to boost productivity and save money.

How is the team using it to accelerate? To answer math and coding questions, get advice on how to debug code, generate scripts for presentations based on outlines, generate creative briefs, write legal documents like internal policies, and answer technical questions.

Nigam said ChatGPT has been most helpful?in creating a technical roadmap, or an outline that lays out a company's strategy around releasing a new product. The process of making a plan, he said, "would normally require hours and hours" of manual brainstorming among colleagues. Instead, he fed ChatGPT all the information needed in the plan, then asked the AI to organize it in a chart and delegate the tasks to the right teams.

With AI as an accelerator, people are still in the mix but spending time with a shift in focus and priority. Does that mean AI is doing all the brainstorming? Maybe.

AI Will Streamline the Creative Process

But will you need an agency at all?

Google is saying it will offer ad clients AI-generated marketing campaigns similar to ones created by humans at agencies,?according to?the Financial Times.

Beyond just optimizing ads, advertisers will be able to provide the creative inputs—text, images, and videos—and the generative AI will remix the inputs to generate customized ads based on target audiences and sales goals. The AI-generated campaigns will be similar to ones that a marketing agency might produce.

Asked by Fortune whether the capability might hurt the marketing agencies to whom advertisers might otherwise turn, Sklerov replied: “We actually see many agencies embracing existing A.I. solutions, such as in bidding, targeting, and creative already, so we continue to be excited about what the future will hold for everyone in the ads ecosystem.”

AI Will Significantly Cut Production Costs - And Build a New Creator Marketplace

From Google’s AI creative, to synthetic models that enable inclusive fashion advertising,?like at Levi’s, to custom creative developed with Midjourney, the need for elaborate photoshoots, model and talent management, rights management, and other expensive production as part of campaign creative and brand assets could be reduced for brands ready to take the leap with AI.

This AI emergence in creative production means that brands will need to pick a lane: Human talent or AI talent. The decision may be dictated by brand values and ethical considerations with the others choosing AI because of cost or other benefits. For example, it will be cheaper to license a body scan of Megan Fox for the next retail “photoshoot.” It will be possible to have an audiobook “read” by James Earl Jones’ licensed voice. Cost will be a driver here, and we are already seeing agencies dedicated to AI talent, image generation, video generation, AI influencer management and other AI creative production start to emerge - creating opportunities and controversies for the brands willing to be the first out.

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Where Agencies Can Differentiate

What is the AI differentiator then? If every agency starts using AI tools and it becomes a sort of table stakes, how can agencies compete and differentiate to brands?

Personal Touch Matters

When it comes to digital advertising, having a personal touch is crucial. Even with all of its benefits, AI is not capable of completely replacing humans. For example, creative tasks like artwork design require the unique perspective of a human. While AI can provide outputs, the humans at the heart will be the ones to create relationships - with clients and for client’s customers.

Privacy Issues Are Real

AI may overlook privacy, leading to data breaches and spam. Although AI is effective for small-scale tasks, it lacks the ability to perform macro-level tasks that require strategic thinking and planning. For example, when it comes to deciding how to allocate advertising budgets, a human's discernment is essential.

AI algorithms used in digital advertising raise privacy concerns. As AI collects and analyzes more data about individuals, there are growing concerns about how that data is being used and protected. Algorithmic bias is also a concern, as unintentionally,?AI algorithms can perpetuate biases in data sets, leading to discrimination against certain individuals or groups.

Lower Cost Doesn’t Mean Better Quality

AI can provide efficiencies and reduce costs. Although AI may be cheaper, paying less does not necessarily result in better service. Ultimately, the power of brand, the essence of an idea, and the creation of an emotional campaign is still owned by the human side of an agency.

Infringement Risks

The brilliance of generative AI can come from ripping off human creativity. Generative AI is?raising many creators’ hackles, and lawsuits from those artists are starting to stack up. Getty Images is suing Stable AI, the maker of Stable Diffusion, for?copyright infringement, and?three artists?are leveling the same charge at Stability AI and Midjourney. IP violations and the sources of what have trained AI tools, like ChatGPT are at question…knowing that AI is not truly creating anything new, but more a remix of what has come before. Agencies will need to understand these risks and be aware of using verbatim content from AI.

Can’t Replace Heart and Intuition

AI cannot replicate intuition, which is another essential human quality. Although data scientists are attempting to create?“artificial intuition,” it is far from being a reality. A human marketer's heart and intuition are irreplaceable. The art of the science is what cannot be replaced.

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Will AI Replace Roles within an Agency?

Absolutely. Based on the points explained, AI has the potential to reduce functions or completely remove the need for certain roles. Think about the fact that you can generate creative, programming code, copywriting and more with less individuals providing oversight and inputs. While this can scale an agencies output, there are role types that are in jeopardy - especially at entry-levels where those individuals lack the experience to manage, assess and review the AI outputs. Case in point, while not an agency, IBM just?announced the pause in hiring 7,800 new roles?that they believe could be done by AI instead. Maybe it’s not AI replacing the entire agency, but functions will be replaced/reduced/removed to increase agency efficiency.

Jon Bond, founder of marketing consortium Weightless, predicts agencies paid through an FTE [full-time equivalent] model, which calculates agency compensation based on employees’ billable working hours,?will face problems in the near future.

If an agency is paid $1 million – $100,000 for an idea, $900,000 to “make 87 iterations” of the idea – and those 87 iterations are generated by AI, it gets much harder to justify the hours or people on the project.

“I’m glad I’m not a junior copywriter starting in this business,” Bond said.

But maybe the new role is AI trainer, an FTE who partners with the AI, providing inputs, giving it specific prompts, guiding it and teaching it. The new model for an agency team will be a human and a machine, collaborating as closely as an art director, media buyer, or copywriter.

What is the most significant opportunity for agencies with AI?

Many brands won’t have the initiative to hire the AI-educated talent to manage the next level of sophistication with AI, even within internal marketing teams or in-house agencies, or these brands will restrict corporate access due to privacy and IP concerns. Perhaps the most significant opportunity for agencies leveraging AI is to bring the advantage of responsible AI to their clients, as an indemnified third-party access point. If an agency is conscious of a client’s concerns, restrictions, and able to navigate the design of a master services agreement that allows for creativity and AI efficiency, there is scalable upside in opportunity for agencies that adapt.

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Overall, generative AI has the potential to revolutionize the way that media agencies operate, helping them to create better content, deliver more effective advertising campaigns, and make better use of data.

While generative AI has the potential to automate certain tasks and improve the efficiency of media agencies, it’s not able to fully replace a media agency in the near term. The creativity and strategic thinking that humans bring to the table are essential. Marketing and media agencies perform a wide range of functions beyond content creation, such as strategy development, media planning, buying and placement, data analysis, and performance measurement. While AI can assist with some of these tasks, human expertise and judgment are still required to make strategic decisions, interpret data and insights, and manage relationships with clients and partners.

Moreover, a media agency's value proposition goes beyond the tasks they perform - they bring years of experience, industry relationships, and creative thinking to the table. This enables them to create unique campaigns that resonate with consumers and deliver real value to their clients. While AI can certainly augment and improve the services that a media agency provides, it is unlikely that it can fully replace the need for human expertise, creativity, and strategic thinking…yet.

While there may not be a fully AI marketing agency right now, the wheels are in motion and agencies are already racing to maximize AI tools and integrations to create efficiencies, increase business opportunities, and stay competitive - for themselves and their clients. While a brand may be concerned and identify AI integrations as a risk, the true risk for an agencies and brands will be to ignore the opportunity available with AI. Because it’s already happening.

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