Beset by budget cuts and pressure to create more with less, agencies and marketers will invest in ad creation capabilities that rely less on humans and more on technologies like “virtual influencers” and AI-generated advertising. These are among the findings in a pair of reports Forrester published today that predict major upheaval for the marketing industry in 2021.

Below, a summary of the findings that are both grim (more job cuts) and hopeful (a rise of entrepreneurialism):

Agency job losses mount

Here’s the bad news: agency layoffs will continue into 2021, with Forrester projecting that U.S. shops will shed another 17,000 positions next year following the 35,000 job cuts this year. 

The upside, if there is one, is that the turnover will “spur a new wave of entrepreneurs as many establish their own business concepts to deliver agency and marketing services,” according to Forrester, which predicts a 5% increase in small or midsize startups. “At the core of their offerings will be creative problem-solving skills; unencumbered by legacy structures, they will be free to find creative solutions in a nimble, cost-effective manner,” Forrester reports.

Welcome the ‘virtual influencer’

Who needs a real human to pitch products when you can create an influencer from thin air? Forrester points to Ikea’s computer-generated model “Imma” in Japan as an example of the kinds of “virtual influencers” brands will increasingly deploy as they look to “control their messaging and go viral simultaneously.” Imma—who describes herself on Instagram as a “virtual girl” who is “interested in Japanese culture, film and art”—was used in an installation at a Tokyo store to highlight the furniture retailer’s solutions for small-space living. As The Verge describes, “Imma is a CGI model and not an actual human. But Ikea says that it created the installation using LED screens inside of the physical rooms, which were ‘curated’ by Imma, to give the appearance of Imma being in a real place.”

The concept is not entirely new. Coke in 2017 struck an endorsement deal with a fictional pro-soccer player—Alex Hunter, a creation of Electronic Arts for its popular FIFA soccer game. As Ad Age described at the time, Coke did not have to worry about its star getting into legal trouble, posting embarrassing tweets or demanding more money.

Automation nation

As if CGI influencers are not enough, more agency tasks will be done using machine-learning tools, according to Forrester, which predicts that 11% of digital/creative and media agency tasks will be automated by 2023 in the U.S, and “23% of overall agencies will be automated by 2032.” Forrester portrays a world in which “agencies will become smaller yet smarter as machine learning and robotic processing automation help plan and buy media, create and produce content, measure and adjust marketing, develop products and experiences, manage operations, and select talent.” 

At first glance it all seems to run counter to the messages put forth by chief marketing officers at last week’s Association of National Advertisers meeting, in which marketing leaders stressed the need to make more “human” appeals to consumers. But if brands and agencies can use robots to do this—for a lot cheaper—perhaps there is something to it, especially with budgets under scrutiny. 

More than ads

CMOs have a lot more than pure-play advertising on their plates, including e-commerce, diversity initiatives and consumer experience. Forrester points out that these functions are often shared across the C-suite, so “agencies that diversify their digital experience, e-commerce, media, and tech offerings will answer needs beyond those of the CMO, mining opportunities with other ... business leaders that need their creative thinking.”

Consultancies like Accenture Interactive and Deloitte Digital have been onto this for a while, of course, and traditional ad agencies have for years touted their non-advertising solutions. But Forrester’s report suggests time is of the essence to get these programs running smoothly. Because “agencies and consultancies that support the broader C-suite [will] grow 10% on average; those that only serve marketing leaders will shrink or remain flat.”

Sponsored social distancing?

Sadly, pandemic advertising is here to stay, at least for next year. The “we’re all in this together” approach is of course way past its prime, so Forrester predicts brands will “test the limits of taste with pandemic advertising” as they look to stand out. In the offing: sponsored safety signage in physical stores—“Stand six feet apart, this sign brought to you by Pepsi,” according to a hypothetical example from Forrester. That example is not so theoretical—Pepsi and Walmart took some heat in May for a co-branded sign in Orlando touting a COVID testing site that included Pepsi’s tagline, “That’s What I Like.” The sign, orchestrated by a local sales associate, was soon removed. The incident underscores Forrester’s warning that “missteps are inevitable”—which is the safest prediction of all.