Everyone in the advertising business continues to praise the innovative power of AI.
There’s a crazy rush saying you’re using technology or using it, and ideally you’ve built something special on it for your client.
Another feeling I’ve heard recently is: It’s not cool for clients if media agents and top buyers can’t explain how or what’s working in their advertising campaigns. “Shrug, it’s just an algorithmic response” and doesn’t help marketers feel comfortable maintaining their planning and strategy teams.
And yet, where is it heading?
Jellafish’s partner Jeff Matissoff was there. Next Media Podcast This week we’ll be talking about the comeback of topics in the marketing mix modeling, AI, and all kinds of macro industry. I asked him about the agency’s competition to build something unique, AI-driven, in a world where we can invest the billions needed to build a massive language model and AI search bot.
“We’re 800,” he said. “We’re not going to build LLM to beat Gemini. Just make sure that doesn’t happen. I don’t think Omnicom will build it.”
Instead, race is about iterating on top of an AI platform.
“It’s the same as programmatic, right? Just like everyone tried to have a DSP and a bid solution, now three or four (in the market) is cool. What do you think? It’s the same with AI.”
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The program analogy isn’t that bad. After all, each media agency doesn’t have its own DSP, and each seller doesn’t have its own SSP, but many businesses have been accomplished and thousands of people are employed in programmatic ads.
However, when it comes to AI, there is an increasing number of talk that media planners will not need to be exposed to media campaigns in the near future. Analyst Jack Meyer says by 2030 “Over 80% of all media planning and purchases are done without human intervention.” GroupM CEO Brian Lesser at CES in January Basically I agreed. And of course, Sir Martin Sorrel calls the media agency toast Several years.
For that part, Jellyfish relied on AI technology to build their own MMMs, gaining a Gen AI platform called AD Creative. pencil.
Matissov says his team needs to play a big role in piloting the car at all times – and that is likely a big part of the agency’s long-term value. “In addition to performance maxes and advantages and at least monitoring, we still want to put humans in the loop. What is that actually doing? Can you understand?”
That understanding and insight seems very important as the institution aims to reinvent its role and remain relevant. But what happens over time when everyone has their own algorithms, when everyone is building on the same platform? According to some experts, there is already a risk of AI/ALGO commodity.
Next, consider these comments from Procter and Gamble CFO Andre Schulten during the recent revenue call (thank you Madison and Wall).
“We use automated media purchases to increase media reach more accurately. Consumer 360’s unique data platform… Brands use target audience algorithms to reach the widest range of consumers who deliver optimal advertising each year, providing the right frequency every year.”
“We’re once again reinventing the agency model. We’ve reduced the number of institutions that have been held more than half since 6,000 years ago, providing an average annual savings of $100 million.”
“We are in-house media operations and have achieved media savings of up to $500 million through data and analytics capabilities applied to planning, negotiation, scheduling and purchasing. We currently operate in-house almost 100% of North America.”
That seems very difficult for agency loyalty to come in over the next few years, especially if more brands think they can do it themselves.
Another aspect of this AI media is buying revolutions that you think will worry institutions and media companies. Google ends up calling the performance of its products the greatest (if you think transparency and brand safety are the current issue…). Does this not distort the industry – an industry that employs performance metrics more than ever before to get 100% on results?
Matissov believes the machine will eventually grasp the branding.
“The current (AI Purchase Tool) is a claw hammer, but there are other AI tools released by Google, Amazon and Meta. So I think they’re experimenting in other ways. But branding means different from all brands, and the KPIs are different. And that’s a broader struggle.
“Six months, nine months, definitely in a year, and in a year, you’ll definitely be using the branding tools using the platform, just like you would use Managing Performance.”
