Head of Innovation & Insights at U of Digital 💡| Ad Tech Veteran | B2B Products, Partnerships, and Marketing
Fact: advertisers will just pay agencies to use an AI-powered planning tool on their behalf. This is why gen AI and LLMs won't put agencies out of business. "But the agencies will fire 75% of their staff!" Nope. Wrong. The agency will take the freed-up staff resources and sell the client more of something different. Net-net the agency business won't be adversely affected. The mix of services agencies offer and the way agencies manage their own overhead costs will evolve over time, as they always have. https://lnkd.in/g9Z4eQZU
Whether AI will lead to efficiencies and headcount reduction or net new growth through productivity gains will ultimately depend on whether there is a cap on the demand side or whether you can effectively stretch the curve. Example: If demand remains constant (e.g., purchasing power doesn’t grow), OEMs won’t be able to translate AI productivity gains into higher production and more sales as the ability to produce more while maintaining the same headcount doesn’t necessarily make a statement whether there is a market for „more“. In contrary, one could argue that the opposite might be true: while human labour should be one of the most significant cost buckets in your COGS, significantly reducing this while maintaining output levels would enable OEMs to offer products at significantly lower prices, therefore grow demand pro-actively by volume.
Gregory Kennedy
6mo
Prediction: The use of AI tools will allow campaign complexity to increase, using up all the extra capacity it unlocks. This has been the trajectory since the introduction of digital marketing. A 30-second spot on 3 channels was pretty easy to manage and measure.
As such agencies are short staffed by 30%. It is just that they might have to repurpose their staff differently. Adapt or perish
Samraat Kakkar
6mo
The industry is waiting for this sort of disruption. A tool that can also integrated traditional as well as digital into one. Each geo tends to have its own nuances for traditional.
Agree with Gowthaman Ragothaman , that there is not much staff to fire . Myles Younger we should hope that AI brings back planning rather than pushing ads to channels.Get time for more back to basics work like research and insight building that has taken a big back seat ..
Sav Khetan
6mo
And the margins.
Do you think agency margins will shrink, esp as nimbler agencies and channel partners can fulfill marketers' needs cheaper by leveraging these AI tools for numerous core services? Given what the agencies had to do the last decade+ to combat shrinking margins, and how damaging that has been to the whole ecosystem, I'm not as optimistic that every little thing's gonna be alright.