fWith Motion Capture Tech, Indian cricket star Rahul Dravid can provide personalized coaching tips for kids to Shakespeare's handwritten, trained algorithms that power robotic arms to rewrite Romeo and Juliet.
These AI-created ads from Cadbury's Drink Brand Bournvita and Pen Maker BIC were produced by the agency group WPP, which spends £300 million per year on data, technology and machine learning to stay competitive.
Mark Reid, CEO of London's listed Marketing Services Group, said AI is “basic” for the future of its business and has acknowledged that it will significantly restructure the advertising industry's workforce.
Now, Reid has announced that he will be leaving at the end of the year after nearly seven years as CEO and over 30 years at WPP.
For advertising agencies, turbulence comes from familiar sources. For more than a decade, Facebook owner Meta has successfully built technical tools for publishers and advertising buyers that will help them dominate online. Big Tech has hoover nearly two-thirds of the £45 billion spent by UK advertisers this year. Now Mark Zuckerberg is hoping to create an ad.
Metabos is gearing up to unleash AI tools to fully create and target campaigns on social media sites, foster fears of “dying of creativity” and encourage widespread employment cuts at agencies.
Last week it was revealed that these tools will be rolled out by the end of next year, with Zuckerberg describing the capabilities of recent interviews as “redefining advertising categories.”
“We don't need creative, we don't need targeting. We don't need measurements. We don't need measurements, except that we can read the results we spit out,” he said last month in a comment that appears to have become obsolete.
Agents of all sizes, particularly deep international groups such as WPP, Publicis, and Omnicom, have developed their own AI tools and are investing in partnership with high-tech companies such as Meta and Google. But the plan is to keep clients, not lose them.
“I'm sure AI will be interrupting a large number of jobs,” says the CEO of one big advertising agency. “That being said, there are many institutions with clients from large companies and you can really do a lot of stuff. You can see that staffing is safe in areas like strategy, consumer insights, and some conceptual roles, but what really hits are those involved in production and the realization of ideas.”
Big Technology executives supported the benefits of AI at the annual Enders Deloitte conference on the media and telecoms industry last week.
“Creativity continues to be human skills in its purest form,” said Stephen Pretorius, who described the “WPP AI man” while co-leading a session with Meta.
He argued that AI is not equivalent to recruitment, but admitted that institutions need to restructure and promote their client relationships.
“AI replaces tasks, eliminates tasks, not jobs,” he said. “Many of the things we were paid for are automated, so the commercial model needs to change. The structure of the team has to change. The way clients incentivize is changing. But that's a transition.”
Last month, WPP said there was a number of private redundancy across WPP media, previously known as GroupM.
“You have a situation where a large holding company is in a dilemma,” says another advertising agency chief executive. “Clients expect to invest millions of AI, so they can cut their budgets by making things faster and cheaper. Many clients are looking to cut their fees.”
So far, the AI revolution does not seem to have had a major impact on the UK industry.
After the newsletter promotion
A record 26,787 people employed in media, creative and digital agents last year, according to the Advertising Institute (IPA), an agency trade agency whose UK clients make up 85% of advertising spending.
The IPA has measured the market size since 1960, when it had 199,000 employees, earning a low point of just under 12,000 in the early 1990s.
The amount spent on advertising rose exponentially, driven by the advent of the Internet age, from just £60 million recorded in the pre-TV era in 1938.
By 1982 the UK market is worth £3.1 billion, and this year it is projected to exceed £45 billion, according to the Advertising Association/WARC, which has been published annually since 1980.
Agency bosses believe that the biggest well-known advertisers have too much brand risk to hand over the full creative process to AI. This does not have the ability to create at least the highest quality ads.
“I can often say [pure] A work of AI 1000 yards away – shiny, very ideal, with a slightly plastic look,” says one creative agency chief. “But that changes. I've heard that creatives would never come up with anything as great as a gorilla playing drums for Cadbury, but I'm not sure. AI is ultimately tuned enough to respond to a very left field concept prompt.”
Ever since the industry commented that meta was about to replace the role of institutions, Zuckerberg has sought to make it clear that AI tools are primarily used by small and medium-sized businesses.
“If we work with creative agencies in the future to create something creative, we'll probably continue to do that,” he told the Stripes Conference, clarifying his position a week after making his first comment on the scope of Meta's AI advertising plans. “If it's not like that, then just hack something together and throw it into the Meta ad system, now you'll come up with 4,000 different versions of creatives, test them, and figure out which one is best.”
Meta and Google have always thought they have “democratized” ads by enabling the long tail of millions of small and medium-sized businesses that have no financial obligation to run TV ad campaigns or employ advertising agencies to run campaigns.
“It's the smokescreen they use all the time,” says the boss of the advertising agency. “When they first appeared as a new ad channel decades ago, it was all about small businesses and now they're taking almost two-thirds of the UK's ad spend.”
At Noughties, Big Technology has built WPP into the world's largest ad group, and is now CEO of S4 Capital, labeled “Frenemies” by Meta and Google. This means that they are partners and are seen as a competitive threat to the institution.
Twenty years later, the rise of AI in advertising is the latest technology development that will be forced to adapt again to survive the industry.
Meta's new promise of “automatically generate ads in seconds” is the most obvious indication that production sausage factories are about to be fully mechanized,” says Patrick Garvey, co-founder of Independent Agency, PI. “It's not the death of an agency, it's the death of an outdated institutional model.”
He supports small businesses that benefit from change, but says that meta's approach to AI is similar to “advertising fast food.” For traditional Adland businesses, it can be a stomach-hard meal.
