Artificial Intelligence

AI Has the Power to Boost Advertisers Working Dollars. Will It?

By Advertisers, Artificial Intelligence, Digital Media, Working Media No Comments

artificial_intelligence“Automation is no longer just a problem for those working in manufacturing. Physical labor was replaced by robots; mental labor is going to be replaced by AI and software.” ~ Andrew Yang

What do ad creation, programmatic customization, personalization, audience targeting, predictive analytics, performance reporting, and fraud prevention have in common? The adoption of Artificial Intelligence (AI) has already demonstrated the ability to enhance advertising performance while reducing the time-on-task in these areas for agency creative, production, and media teams.

Consider Digiday’s recently published article citing a case history for The Brandtech Group indicating that its generative AI platform had the ability to produce ads “10 times faster, deliver twice the performance and cost 30 to 50 percent less.”

When it comes to media, Group M recently predicted that “AI-enabled media buys will account for 94.1% of all ad spending by 2029.” This indicates that there will be a significant shift in how media planning and buying will be executed, reinforcing the need for advertisers and agencies to adapt their approach to realize the resulting efficiencies and media performance improvements.

AI’s ability to automate routine tasks and efficiently process reams of data will reduce the time and resources required by agencies to service their clients. Consequently, AI can play a key role in lowering the fees advertisers pay to their agency partners and AdTech intermediaries, thus increasing working ad spend.

Forrester recently issued its Agency AI-Powered Workforce Forecast, 2030 (US), predicting that “by 2030, US ad agencies and related services companies will lose 32,000 jobs to automation, 7.5% of the total agency workforce.” The potential labor savings is not limited to the advertising industry, according to McKinsey, “by 2030, activities that account for up to 30 percent of hours currently worked across the US economy could be automated” as a result of the adoption of generative AI.

From an agency perspective, the automation of labor-intensive, repetitive jobs will eliminate certain roles. Thus, agencies will seek to protect their revenue by effectively harnessing AI to consolidate their share of ad spend across their client base. For example, WPP recently announced a “Production Studio” application using generative AI and a content engine recently developed with Nvidia that will create “text, images, and video” for advertisers.

Advertisers must move swiftly and with purpose to proactively engage their marketing services providers to discuss AI’s potential impact on upcoming scopes of work along with the corresponding agency staffing plans and resource investment needs. Questions regarding how and when AI will be deployed and what the effect will be on various creative, media, and operational processes should be discussed in detail. The resulting feedback will allow advertisers to ascertain the potential for in-housing certain tasks and realigning responsibility for specific roles and project work across their agency network.

In conclusion, there can be no doubt that AI is poised to significantly transform the advertising industry. AI’s ability to optimize, and innovate how advertising is created, delivered, and monitored will certainly be a game changer. By taking the lead on the integration of AI into their workflows, advertisers can reduce their reliance on agency services and lower the amount of time and resources required by their agencies to create and manage ad campaigns. In turn, this will lower fees as a percent to total ad spend, improving advertisers’ working dollars.