How AI is changing the way agencies work

Artificial intelligence has been a hot topic in the ad world, and government is getting involved. The FCC recently announced it would seek to require advertisers to disclose the use of AI in political campaigns, underscoring a need for greater transparency. While the consensus among advertisers is that greater regulation is indeed needed in the application of AI to advertising, the potential for its value only continues to grow. Agencies today are embracing AI-powered innovation at a rapid pace and with promising results, using the tools at their disposal to work better, faster and more cost effectively, while also creating superior work for clients. Whether for copywriting, strategy or production, AI has fundamentally changed the ad industry in just a few years’ time, with the wave of change showing no sign of slowing. For this month’s spotlight, we spoke to members of the Amp community to find out how AI is changing the way they work and run their businesses, as well as what a future state of AI in advertising could look like. The gift of time One of the greatest innovations AI has given creatives is the gift of time, creating efficiencies to cut down on manual administrative work and allowing people to focus on what they do best. That shift, however, has raised questions about the way work had been costed out for decades, inspiring some agencies to rethink how pricing models should look. “Brand marketers today are moving away from just buying hours, because the traditional commercial model for our industry is fundamentally broken,” said Wesley ter Haar, co-CEO of Monks. “Agreements based on time and materials disincentivize the agency from being efficient, inhibiting innovation and racking up costs for their clients.” Beyond this inherent friction, AI's ability to deliver speed and scale has moved to an output-based pricing model that better reflects the goals of the agency’s clients, he said. Marketers today are using AI in a way that maximizes rather than minimizes creativity, and intelligent use of time is central to unlocking that capacity, according to Nicole Valdes, client strategy director at Indie Consulting. “I always say it’s like having an incredibly skilled assistant that grants us the gift of time to focus on what truly matters, which is strategic and creative work,” she said. ”It helps us manage multiple client accounts and large volumes of data efficiently, enabling us to quickly turn insights into actionable strategies, and to work smarter, not harder.” Valdes noted that AI can draft the framework for scopes or internal briefs, freeing up time for more impactful activities. Innovation and creativity have also benefited greatly in a foundational sense. Valdes underlined the use case of AI as a means to spark creativity in a world where many are working remotely and missing the daily human interactions that often lead to new ideas. “Ultimately, AI keeps us ahead of the curve. We’ve never really viewed it as a threat to the industry but rather an opportunity to increase our output,” she said. For marketers, one of the key time-saving areas AI has opened up is audience research and analysis, with tools that have altered the way marketers seek to connect with their target audiences. “We’ve unlocked a lot of efficiency—time-saving measures, especially—in research, ideation and activating performance media,” said Raashi Mehta, director of innovation at Critical Mass. “AI and machine learning have also superpowered our strategy and data-science practice, with totally new methods for getting faster, better results in audience understanding, competitor analysis and predictive intelligence. We’re doing more with less across the board, which lets us devote more time to the most important layer in our service—the human one.” Mehta calls AI a “ground-shifting moment” for the agency, which has embraced the change in its own internal tools and processes, and through hackathons and pilot programs, experimenting to find the recipes that yield the best outcomes. Building prototypes for its clients while undertaking operational revamps has enabled Critical Mass to try to find out which tools, ideas, approaches and use cases will create value for clients. Those choices, tools and ideas have reached staggering heights in recent years, with AI becoming a $184 billion industry. In an increasingly crowded market, the challenge is finding the right tools and expertise to unlock a competitive edge. “AI has finally reached a point where the technology can scale, but in the world of martech, not all AI is equal,” said Tim Glomb, VP of digital, content and AI at Wunderkind. “While most marketers have access to tools that assist with simple, day-to-day tasks like copy, content and imagery, what many need help with is the use of data.” Glomb suggested that brands should be wary of martech tools that slap basic AI features onto a user interface, but don’t deliver the outcomes marketers really need. The quality of output is directly related to the quality of data that AI has available. ”No one needs a better tool; they need AI-driven outcomes that free up humans to focus on more human tasks,” he said. Putting AI to work Innovation in AI has reached a point where the conversation is less “what can it do?” and more “what can’t it do?” Agencies are embracing the full spectrum of AI capability, leading to novel ways to grow, evolve and expand business. For Los Angeles-based Fred & Farid, that meant launching a dedicated division, dubbed [Ai]magination, and assembling a team of highly skilled experts in the field. “[Ai]magination is a global team of AI artists, strategists, producers and technologists in Paris, Shanghai, New York and Los Angeles who all study the latest innovations and techniques in the AI space,” said Eileen Zhao, Fred & Farid’s strategy director. “They’re for clients who want to reimagine their brands in the marketing and communication space. AI has given us the tools to newly understand what we can create, but more importantly it’s allowed us to reshape the narrative around AI, where we as the creators are the irreplaceable drivers of this ever-changing technology.” At New York’s Hogwash Studios, AI is now woven into day-to-day practices and processes, with generative AI program Midjourney at the center of that change. “From quickly spinning up reference images for client presentations to visualizing wild and crazy set designs, Midjourney is accelerating our pace of working and saving art directors hours of time,” said Tori Nygren, Hogwash’s founder and creative director. “For example, we can create on-the-spot concepts for Airbnb and its Icons program of once-in-a-lifetime stays, like Feid’s tour bus or the Musée d’Orsay during the Paris Olympics.” The team at Hogwash Studios has picked up some key learnings in embracing AI innovation, including the importance of intelligent prompts, the continued need for creative talent and the value of patience when working with an imperfect, continually evolving tool. “AI will empower us to do more, it will not replace us,” Nygren said. “The more we know, the smarter we become, and the more we’ll be able to leverage AI to move our clients’ and our business forward.” Brian Yamada, VML’s chief innovation officer, shared a similar perspective. “We strongly believe in the potential of AI to supercharge our creativity, storytelling and experiences,” he said. “We want our teams focused on client solutions that can improve speed, scale and accuracy as well as increase the impact of experiences or interactions with a brand.” At VML, AI is currently being employed cross-functionally, with parent company WPP investing over $300 million in AI in 2024 alone. “We are applying AI against all areas of our core work, elevating creative, content efficiency, scale and marketing effectiveness,” Yamada said. “We’re also broadly applying AI across task automation, content generation, human representation, insight extraction, decision making and human augmentation. And we’re deploying it to power the connectivity across brand experience, customer experience and commerce—how we create connected brands.” The future of AI in advertising For agencies, the application of AI will undoubtedly grow. According to Chad Broude, co-founder and chief creative officer at Chicago-based Highdive, it’s currently affecting about 20% of the agency’s business, from accelerated strategy and rough ideation to light supplemental production. “But in about six to 12 months, we're anticipating that to jump to 40% to 50%, and we're hiring leading AI experts to prepare for that,” he said. “From a production standpoint, we see a near future that doesn't require shoots.” The value of any tool applied to the ad industry comes down to whether it can help move the needle for advertisers looking to create impactful work for clients with greater efficiency. For some, the results so far have been promising. “Our AI-driven analytics have enhanced our ability to rapidly process and analyze vast datasets, providing actionable insights and enabling data-driven decisions,” said Matt Fitz-Henry, chief innovation officer at Amp Agency. “In digital product development, AI aids in creating personalized and engaging user experiences, and the automation of routine tasks allows our creative teams to focus on strategic innovation. AI also enhances our campaign management by enabling real-time monitoring and optimization.” At Amp, the adoption of AI is balanced by a test-and-learn approach, with a focus on addressing concerns around data and privacy, as well as legal, ethical and compliance issues. While critical, those issues are not holding the agency back from using AI to its full potential. “We have developed a comprehensive measurement framework to validate our initial assumptions and measure the value created by these tools,” Fitz-Henry noted. “We uncover significant benefits across multiple facets of our operations by embracing generative AI, even in its early stages. This technology enhances our efficiency, creativity and decision-making processes, allowing us to deliver superior value to our clients.” Ad Age Small Agency Awards On July 24, Ad Age announced the winners of the 2024 Small Agency Awards at the annual Small Agency Conference, in Boston. Once again, Ad Age Amp members were well represented among the honorees onstage. Congratulations to all the winners! Preacher: Small Agency of the Year, Southwest, Gold Superconductor: Small Agency of the Year, West, Gold Bakery: Small Agency of the Year, Southwest, Silver Cornett: Small Agency of the Year, Southeast, Silver L&C: Campaign of the Year: B2B, Gold, AB InBev, “Nativa Meter” Copacino Fujikado: Campaign of the Year: B2B, Silver, Premera Blue Cross, “They’re So Much More Than Employees” Terri & Sandy: Campaign of the Year: Digital, Silver, Orchard Valley Harvest, “Say No to Nut November” Opinionated: Campaign of the Year: Experiential, Silver, Voodoo Ranger, “The World's Strongest Can” About Amp Amp is a platform that’s integrated with Ad Age and Ad Age Creativity, allowing you to leverage our editorial credibility while showcasing your expertise, accolades and campaigns. For more information visit our FAQ page. Not an Ad Age Amp member? Find your page and claim it today.

How AI is changing the way agencies work

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