“In the last 12 months, the power of AI sort of moved out of the domain of just engineers and developers and data scientists and into everyone's hands,” Perry said. In the last year, Dept has seen an increased interest from clients in wanting to learn about these AI tools and how they can help the agency do “more with less,” according to Perry.
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The agency felt the need to formalize its offering, said Dimi Albers, global CEO of Dept, because “there's always that moment where you need to tell the story more broadly.”
Last year, 30% of the agency’s revenue came from AI-enabled work, which included using the tech to improve the spend management of a certain media client. In one case, Dept worked with a beauty retailer to help target its consumer messaging based on their online shopping habits. The agency handles over $3.5 billion in media budgets for clients, 70% of which implements some type of AI, according to Albers. The goal for the agency is to have 80% of its revenue come from AI-enabled work by 2025.
“In the short term, helping clients understand how we can help is incredibly important, but for long-term growth, it's as important to say, 'Here are the people you need to work together with and build the company of the future now,'” said Perry.
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Consulting on strategy
AI-powered agencies such as Supernatural and more recently Product have popped up over the past couple of years. In November 2022, Supernatural launched an AI consultancy practice after seeing growth in that area following the agency's 2021 launch. Currently, nearly half of the agency’s revenue comes from consulting, according to Chief Strategy Officer Mike Barrett.
As the need for consulting work grew, the agency saw the need to launch the discrete practice.
“The types of questions that management consultants tend to answer are 'What drives growth in my category? How do people make decisions? And where are the most valuable audiences? Are they the people I have now?'” said Barrett.
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“We are getting engaged to answer those questions,” said Barrett, who previously helped lead Heat, an agency acquired by consulting giant Deloitte in 2016 for an undisclosed cost. “The reason we split it off as a consulting offering is because we want clients to know that they don't have to hire a whole advertising agency to work with us on this stuff. If they want us to come in, bang out some smart stuff, and hand it over to an internal team, we're happy to do that.”
Its consulting practice can solve issues beyond consumer marketing, according to Barrett, noting that Supernatural is helping a hospital client work on employee retention.
The agency is building an operating system that encompasses different AI tools to generate creative assets and brainstorm strategically. To inform strategy decisions, clients answer 39 questions in the operating system that then uses audience data and other data to generate different strategy frameworks.
Currently, the agency is licensing its system to a small number of agencies and considering expanding that on a larger scale.