Opinion

Survival of the fittest: Indie agencies facing the AI battle

While agencyland's holding companies are pouring money into AI, independent agencies are lacking in adoption of tech. Tangram's Australia-based managing director and partner, Helen Johnson, explores.

AI, technology, and automation are transforming the advertising industry, with networks like WPP, Publicis Groupe, and Omnicom pouring vast sums – hundreds of millions of dollars – into AI, technology and automation.

WPP has announced a £250 million (AU$480 million) investment in AI for 2024, and Publicis Groupe has committed €300 million (AU$493 million) to AI.

These investments will enable the holding companies to develop and deploy proprietary AI and technology solutions, and gain access to exclusive partnerships and platforms.

These massive investments speak volumes about the network’s commitment to staying ahead of the curve and revolutionising advertising practices.

With resources of this magnitude at their disposal, these networks are not just embracing AI—they’re shaping its future.

How AI and technology is reshaping the advertising industry

Some of the best examples I’ve seen of agencies using AI demonstrate a level of innovation and forward-thinking that sets the standard for the entire industry:

  • Optimising design and production – Omnicom has forged partnerships with generative AI tools like Getty’s AI platform. Through these collaborations, agencies are revolutionising the creative process, generating bespoke assets like images, videos, headlines, and slogans with unprecedented speed and precision.
  • Managing vast amounts of media data – AI isn’t just a game-changer for creative output, it’s also revolutionising media planning and buying. Group M has been leveraging AI to analyse huge amounts of data, predict outcomes, and allocate budgets across channels and platforms.
  • Automating the operations cycle – dentsu has been measuring and optimising business processes using automations to eliminate manual busy work for their business, saving thousands of hours across their network.

What holding companies need to watch out for

Despite the giant leaps that have been made, the networks need to be careful and make sure they don’t stumble into common pitfalls.

Time and time again, I’ve seen agencies invest heavily in new technology. Networks are renowned for operating in silos, failing to collaborate effectively and leading to disjointed efforts and missed opportunities. It’s not just about implementing flashy new tools; it’s about understanding how each component fits into the broader strategy and workflow.

Networks investing heavily into AI, technology and automation need to do it with a holistic approach, or risk investing resources into solutions that may not stand up. With the head start they have, it’s crucial for networks to get it right early on.

What can indies be doing to win the AI race?

So what does this mean for the independent agencies, which are often praised for their agility and creativity? With resource disparities and lacking the scale of the holding companies, how can they fend off the looming threat and assert their place in the new order?

The good news is that there are opportunities for indies to harness AI without breaking the bank. Many tools for building applications and automations come bundled in packages from industry giants like Microsoft and Google. No-code apps, easily accessible, and cheap to implement with no need for a development team.

To navigate this landscape successfully, independent agencies must ensure their data is organised and well-documented, steering clear of unnecessary complexity in tracking client data. By understanding their processes inside out, indies can avoid adding unnecessary layers to their tech stack and identify areas ripe for automation.

While networks may have the upper hand with their significant investments in AI, indie agencies possess agility, creativity, and the potential to carve out their niche in the AI era. It’s a competition fuelled by innovation, and with the right strategy, indie agencies can indeed hold their ground against the networks powered by AI.

Helen Johnson is the Australia-based managing director and partner at Tangram.

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