From Mad Men to Math Men: The Uncomfortable Truth About AI's Agency Takeover
I wrote this article back in December about how Silicon Valley was eating Madison Avenue, but I thought I’d follow it up with a few sobering figures from 2024 that read like the opening paragraphs of an obituary for creative agencies:
What does it mean? It means the spreadsheets are winning, and the moodboards are losing.
As a sign of the times, IPG sold Huge and R/GA to two separate private equity firms so that IPG could “...sharpen our focus on our core strategic offerings.”
Ouch.???
These once-celebrated digital creative houses are now being repackaged as "efficiency opportunities" for ruthless cost-cutting specialists.?
Several reasons come to mind:
Reason 1 - Tech clients - once the golden geese of agency land - have drastically reduced their ad budgets: up to 25% if some anecdotes are to be believed.?
Those same clients who once demanded "creative breakthroughs" in pitches now want "cost-effective and performance-backed spend" (phrases that make executive creative directors literally throw up in their mouths).
Reason 2 - 66% of Fortune 500 companies in a 2023 WFA survey said they already have in-house creative teams, with another 21% actively considering them.?
Apparently it’s dawned on clients that hiring their own designers is cheaper than paying agency markups that fund pool tables nobody uses and swanky offices nobody works in.
Reason 3 - And then there's AI. The ultimate betrayal.
The tools creatives once dismissed as "never replacing human ingenuity and creativity" can now generate decent, usable concepts in seconds.
Not award-winning work (yet) but adequate enough for the 66% of clients who've decided "good enough" is, well, good enough.
The creative guru with the storytelling-driven presentation deck has been replaced by the data scientist who can use incrementality testing to prove, with devastating precision, exactly how little that Clio-winning ad actually moved the sales needle.
The media buyer with access to programmatic platforms now generates more shareholder value than the copywriter who spent a week crafting the perfect headline so it can be dismissed in a client call because “it’s not quite aligned with our brand personality.”?
The outlook for 2025 reads like dystopian fiction for creative departments:
The message couldn't be clearer if it were written in 72-point Helvetica Bold: creativity is no longer the product; it's an add-on.?
If you're a creative director, junior designer or a copywriter reading this, you've probably seen the writing on the wall since 2023. Maybe you've even contemplated using those SkillsFuture credits for a course in "Data Science and AI". At the least, you should be learning to pitch data-informed insights rather than just concepts based on "my long agency experience" and "I've got a good feeling about this".
If you're a client, you'll be expecting a lot more data in pitch presentations and fewer "viral outside-the-box ideas". Unless you're willing to pay for them. (And let's be honest, you get great ideas for free anyway during pitch season).
And if you're an AI specialist? Well, enjoy your moment in the sun. The industry that once celebrated two-hour client lunches on expense accounts, and creative processes that involved "inspiration-seeking workshops" in Cannes, now genuflects at the altar of your process-automation scripts.
Yet, I'm optimistic enough to believe there will always be room for big, creative ideas.?
But I'm realistic enough to know those ideas will increasingly come from humans partnering with AI, guided by data, and measured relentlessly.
The uncomfortable truth isn't that AI, data or technology have taken over creative agencies. It's that we may have waited too long to embrace them.
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