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Predictions for 2024: The AI Era Accelerates Agencies From Services To Solutions

Predictions 2024- The AI Era Accelerates Agencies From Services To Solutions

AI - Artificial Intelligence

After meteoric post-pandemic performance, agencies’ earnings have returned to pre-pandemic, single-digit levels while AI investments skyrocketed to $92 billion during 2022 and $50 to $60 billion year-to-date in 2023. The next wave of growth hinges on agencies’ ability to shift their economic model in order to capture the full potential of AI within their processes, capabilities, and structure. In 2024, agencies face recasting their services-based model into a solutions-based one — comprised of creativity and technology products. All agency types (creative, media, PR, digital, and in-house) will feel the impact of pairing people with technology.

  • Bespoke brand algorithms will power agency offerings. In the future, brands will buy the algorithms that their agencies build by training AI-powered marketing engines with multiple first- and third-party audience signals, historical media performance, and creative content — personalized for each client. Forrester calls these bespoke brand algorithms “brand language models.” They are brand-specific applications of AI technology that use base models like Meta’s Llama or OpenAI’s GPT that leverage insights from audience signals and layer in a company’s branding, fonts, colors, tone of voice, and IP. Brand language models are the engines that create brand-specific, personalized marketing based upon human creative ideas combined with machine precision and speed.
  • Agency reviews will increase as fear of AI mismanagement grows. Agencies and marketers will be left to self-govern AI marketing practices until the US and EU enact AI legislation, expected by 2026. This will make business leaders nervous. Sixty-one percent of AI decision-makers are concerned about privacy and data protection that might violate laws such as the GDPR, and 57% are concerned about the misuse of genAI’s outputs leading to errors. As a result, 2024 will see more accounts up for review as marketers look for safe AI implementation to control the reputational fallout from mismanaged AI marketing executions.

Balance Automation With Augmentation
Traditionally, artificial intelligence connotes automation leading to employee displacement. Technologies such as robotic process automation, deep learning, computer vision, and intelligent automation have shown potential to automate 25% of agency roles. But genAI lends itself more to employee skill set augmentation. Our agency AI forecast for the US shows more agency roles benefiting from the influence of generative AI and only 7.5% of agency roles being automated by the end of the decade. The pairing of people with AI platforms will set the pace for how creative industries negotiate room for efficiency and effectiveness, as the WGA and major Hollywood studios did in recent contract negotiations. Agencies should aim to balance the cost efficiency that marketers are looking for with the increased volume and impact of human creativity, augmented by AI.

B2C Marketers: Leap Now, Not Later
The AI era for agencies is in full swing as experimenting with generative AI progresses to implementing it — leveraging the speed, intelligence, scale, and creativity that it provides. 2024 will witness both ups and downs as marketing executives, agency leaders, procurement professionals, and technology providers work to commercialize agencies’ embrace of AI and the transformation that it enables.

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