Generative Artificial Intelligence (Gen AI) — an influential buzzword — has captivated advertisers across the globe. It has emerged as a clear choice for them — it saves them time (by enhancing performance) and money.
Leading ad agencies across the globe are investing heavily in AI and automation (which requires minimal human intervention) to enhance their capabilities and fasten work. WPP, for instance, is investing $300 million annually in AI, including an AI-powered production studio.
Publicis Groupe announced to spend $300 million over three years on its CoreAI data platform. IPG is allocating $100 million to expand AI across its global network with partners like Adobe. Dentsu has also formed AI partnerships with Google and Salesforce.
Statista projects that AI-enabled global ad spending is likely to hit $1.3 trillion in the next decade. Global revenues from AI tools in marketing are expected to surge by $80 billion in the next five years.
These investments indicate the profound impact of AI and automation on the ad industry. The trend has also led to widespread concerns about job losses in the ad industry, especially in India where escalating costs, economic strains and dwindling job opportunities are quite visible.
“Large agencies have already started slashing jobs silently, on average 10 per cent annually. These job cuts are gradual, 1-2 people a month, to avoid any controversy or media glare,” insiders say.
Professionals, especially those who have been part of the pitch team, traditional media buying and operations are the most affected ones.
“Fresh hiring is also being squeezed or revisited or completely frozen”, executives say, requesting anonymity.
Most agency heads have largely maintained a silence over the matter. Some agencies have even issued a diktat to their India leadership to not entertain any media query, which revolves around the topic.
“Automation has the potential to change the very nature of traditional jobs in the advertising industry. It has led to job losses abroad. In India, it's not visible as of now, but it is inevitable”, says Aalap Desai, Chief Creative Officer of Tgthr, an independent agency.
With the use of AI, it takes about two to three people for a task that would take up to 8-10 people, shares Yogesh Kothari, Global Head - PivotConsult, PivotRoots- a Havas Company.
Young advertising professionals are alarmed over the possibility of more job cuts in the coming days. They are either seeking a transfer to other departments by upskilling themselves or leaving the profession altogether, a senior media planner told e4m.
There have been more than 106,000 layoffs in the tech industry in the first six months of 2024, including Indian firms like Unacademy and Koo, according to online tracker Layoffs.fyi.
Sensing the trend, the government of India recently set up a task force to study the impact of AI on the future of work. This was shared by Union labour and employment secretary Sumita Dawra during an industry interaction organized by the Confederation of Indian Industry (CII) and Employers’ Federation of India (EFI) early this month.
Not just AI
AI and automation are not to be completely blamed for the situation, industry leaders insist. The subdued market situation is also being credited for the job losses.
Ad agencies in India are grappling with the loss of business due to weak markets. To make matters worse, clients are increasingly setting up own in-house creative and media teams to save advertising costs. They approach agencies only for big-ticket campaigns.
This has impacted agencies' retainership portfolios and its size, putting tremendous pressure on them to adopt cost-cutting measures. Notably, big advertisers like Godrej Consumer Products Ltd and Reliance have set up their own ad agencies to save the cost.
AI and advertising
Microsoft-backed OpenAI, which released ChatGPT in late 2022, has completely shaped the Generative AI landscape with its innovations across different types of content generation and AI research.
Although giants like Google, Microsoft, Nvidia and Anthropic have entered the space, OpenAI is still the most successful dedicated generative AI company to date, worth an estimated $80 billion.
Beyond its flagship content generation solution, ChatGPT, and image, audio and embedding solutions, the firm has also announced Sora, a generative AI video solution, and the GPT Store, which will make it easier for users to select custom-built versions of ChatGPT that align with their specific business use cases and requirements.
Gen AI’s use cases in the ad industry can be broadly categorized into three parts:
Creativity: AI-generated visual content has reached remarkable heights, delivering high-quality visuals at an unprecedented pace. Coca-Cola's AI ad, Masterpiece (below), for instance, showcases the synergy between human creativity and AI setting new standards for programmatic advertising.
Speed: AI dramatically accelerates copywriting, image and video creation, and pattern detection. It minimizes the time required to identify winning variables and helps marketers do more with less.
Insights: AI minimizes wasted ad spend by predicting high-performing audiences, creatives, and bids while enabling better budget allocation and audience segmentation. It has revolutionised agencies’ pitch processes, allowing for data-driven presentations, enhanced bidding, campaign cohort identification, optimizing cost per acquisition and reach among others.
Silver lining
Industry leaders insist that AI tools have quickly emerged as an invaluable virtual assistant, streamlining and simplifying tasks such as researching and preparing a pitch, generating spectacular content, analysing market trends, optimising campaigns in real time and even in media planning. However, the transition of AI to assume the full-fledged role of an advertising professional is still far away.
Vineet Bajpai, Founder & CEO, Magnon Group, says, "At the core, AI streamlines operations, enhances targeting precision, and optimizes campaign performance. From creative ideation to audience segmentation and media buying, AI augments every facet of advertising, delivering unparalleled insights and efficiency.”
“However, it's crucial to recognize that while AI excels at processing vast amounts of data and identifying patterns, it lacks the nuanced understanding and creativity inherent in human cognition. AI tools can't replace the human touch in crafting compelling narratives or understanding the intricacies of human emotion. Moreover, these tools require skilled human operators to interpret results, make strategic decisions, and refine algorithms and ensure they align with brand values, resonate with audiences, and drive meaningful engagement,” Bajpai added.
Shradha Agarwal, Co-Founder and CEO- Grapes, echoes the sentiments, “The role of AI transcends the realm of creating videos and content, and can go a long way in media planning and buying but cannot be done without human intervention.”
According to a Forrester forecast, “By 2030, only 1.5% of jobs will be lost to genAI, while 6.9% will be influenced by it. With this in mind, leaders should prioritize transparency about these ideas and statistics to motivate their workforce about the future of AI in the workplace.”
Being adaptable is the key
McKinsey Global Institute (MGI), which provides valuable insights into AI's impact on marketing roles, indicates a dual effect on the job market: while automation replaces some tasks, it also generates new growth opportunities requiring strategic and creative input. MGI stresses the importance of marketing professionals being adaptable and open to upskilling to maintain relevance in the evolving industry.
At a time when employees globally are worried about their jobs as they compete with the rise of Artificial Intelligence (AI) technology at the workplace, former OpenAI executive Zack Kass shared a nuanced approach to the issue.
“AI will commoditize much of our knowledge and skills. However, human qualities such as courage, vision, wisdom, and empathy will become increasingly valuable in the job market. These "immutable human qualities" will play a pivotal role in distinguishing individuals and their contributions amidst the evolving technological landscape, Kass advises,” Kass was quoted as saying by Business Insider.
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