Featuring motion capture technology, Indian cricket legend Rahul Dravid provides custom coaching advice for children. Shakespeare’s original manuscripts can now be rewritten by a trained AI algorithm through a robotic arm. Artificial intelligence is rapidly transforming the worldwide advertising landscape.
The AI-generated advertisements from Cadbury’s drink brand Bournvita and pen manufacturer BIC were crafted by WPP, an agency group investing £300 million annually in data, technology, and machine learning to maintain its edge.
Mark Reid, CEO of the London-based Marketing Services Group, has stated that AI is “essential” for the future of the business and recognizes that it will lead to significant changes in the workforce of the advertising sector.
Recently, Reid announced his resignation as CEO of WPP after nearly seven years, amidst a team of more than 30 members.
Advertising agencies face challenges from familiar adversaries. Over the past decade, tech giants like Google and Meta (the parent company of Facebook) have built sophisticated tools for publishers and ad buyers, solidifying their dominance online. This year, Big Tech has captured nearly two-thirds of the £45 billion that UK advertisers are spending.
WPP’s subsidiary VML has harnessed AI for a “one BIC, one book, two classics” campaign targeting Brazilian audiences. Photo: WPP
Meta is preparing to launch AI tools that enable the complete creation and targeting of advertising campaigns on social media, raising concerns about “creative extinction” and potential job cuts across agencies.
These tools are set to be introduced by the end of next year. In a recent interview, Zuckerberg described them as “redefining advertising categories.”
Rahul Dravid in the Cadbury Bournvita campaign featuring AI.
Agencies of all sizes, particularly large international networks like WPP, Publicis, and Omnicom, are developing their own AI resources while investing in partnerships with tech giants like Meta and Google, striving to retain clients.
“I’m confident AI will disrupt a significant number of jobs,” stated the CEO of a major advertising firm. “That said, many institutions maintain differing client portfolios, allowing them to perform a broad range of tasks. Staffing remains secure in areas like strategy, consumer insights, and certain conceptual roles, yet production roles are where the impact is most felt.”
Tech executives endorsed the advantages of AI at last week’s Enders Deloitte conference, which focused on the media and telecommunications sector.
Speaking at the conference, Stephen Pretorius, referred to as the “AI guy at WPP,” emphasized, “True creativity is an inherently human skill.”
Stephan Pretorius from WPP discussing AI’s role in advertising.
He argued that while AI isn’t a direct substitute for recruitment, institutions must adapt and prioritize client relationships.
“AI replaces tasks rather than jobs,” he stated. “Many responsibilities we were compensated for are now automated, necessitating a shift in our business models. Team structures and client incentives will also evolve. This is merely a transitional phase.”
Recently, WPP reported several layoffs across its media division, previously known as GroupM.
“We live in a scenario where a major holding company is facing a conundrum,” remarked another agency CEO. “Clients expect to invest millions in AI, cutting budgets while speeding up and reducing costs. Many clients are seeking to decrease their fees.”
Currently, the AI revolution hasn’t made a significant dent in the UK advertising sector.
Meta, the parent company of Facebook and Instagram, plans to introduce AI tools enabling advertisers to fully create and target campaigns on social media. Photo: Anadoll/Getty Images
Last year, the IPA reported a record employment figure of 26,787 individuals in media, creative, and digital agencies, representing 85% of the UK’s advertising expenditure.
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The IPA has tracked market size since 1960 when it recorded 199,000 employees, dipping to just under 12,000 in the early 1990s.
Advertising expenditure surged dramatically, fueled by the rise of the Internet, from a mere £60 million noted in the pre-television era of 1938.
By 1982, the UK advertising market was valued at £3.1 billion, and this year it is expected to surpass £45 billion, according to the Advertising Association/WARC that has published annual reports since 1980.
Agency executives believe that major advertisers face too much brand risk to allow AI to handle the entire creative process.
“I can often identify a piece of AI-generated work from a mile away—it’s polished, overly idealistic, and somewhat artificial,” observed one creative agency head. “But that’s evolving. I’ve been told creatives could never improve upon the iconic gorilla ad for Cadbury, yet I’m uncertain. AI can ultimately refine enough to respond to highly intuitive concepts.”
Cadbury’s Dairy Milk ad featuring gorillas playing drums became a viral sensation. Photo: Rex Features
As the industry speculates about Meta’s plans to replace conventional agencies, Zuckerberg has sought to clarify that AI technologies are primarily aimed at small and medium enterprises.
“In future collaborations with creative agencies, we’ll likely ensure their involvement,” he remarked at the Stripes Conference, emphasizing this position shortly after his initial comments about Meta’s AI advertising trajectory. “If agencies don’t adapt, they might find themselves throwing together ad compositions only to flood the Meta platform with thousands of variations to see which performs best.”
Meta and Google maintain they’ve “democratized” advertising by enabling countless small and mid-sized companies to run campaigns without the financial burden of traditional advertising channels.
“That’s the mask they wear constantly,” stated a head of an advertising agency. “When they emerged decades ago as a novel ad platform, the focus was on small businesses, yet now they are capturing almost two-thirds of the UK’s advertising budget.”
In the 2000s, big tech firms grew immensely, propelling WPP to become the largest advertising group worldwide, while the CEO of S4 Capital has been dubbed Meta and Google’s ‘Frenemy.’
Two decades later, the rise of AI within advertising marks the latest technological upheaval that the industry must adapt to in order to thrive.
Meta’s bold commitment to “automatically generate ads in seconds” signals a transformative shift towards total mechanization of production processes,” asserts Patrick Garvey, co-founder of the independent agency PI. “This isn’t the demise of an agency; rather, it signals the end of outdated institutional paradigms.”
He champions the small businesses reshaping the landscape but questions whether Meta’s approach to AI resembles “advertising fast food.” For traditional ad firms, it could prove to be a bitter pill.
Source: www.theguardian.com
