A very senior advertising boss who prides himself on employing many thousands of staff was asked not long ago if automation would lead to more jobs or fewer jobs.
Fewer, he responded instantly, which ought to alarm a lot of people currently working at any media agency or sales house. The machines are rising up, if not quite taking over, in a world of artificial intelligence and algorithms. "Self-service" technology already means brands can manage more of their media buying themselves.
Insourcing
Talk to almost anyone at the top of media and the buzz is about insourcing, as clients consider taking more of their marketing in-house. Lack of trust between brands and agencies is part of the reason for this trend, as media trading has become more complex and opaque.
There are also lots of new entrants eyeing a slice of all those agency billings. It is not just the big consultancies. The software giants, including IBM, Oracle, SAP, Adobe and Salesforce, are all pushing to get into data-driven marketing. That makes the arrival in the UK of Blackwood Seven, a three-year-old Danish AI media agency that claims €400m (£360m) of billings, worthy of note.
Its software platform works by using 82 different data sources, from a client’s sales to the weather, to predict the likely outcome of the media plan and then allows a campaign to be optimised in real time. And Blackwood Seven claims to be transparent because it charges clients a monthly fee on a software-as-a-service model, rather than taking a percentage of billings and pushing clients to invest with certain media owners because of the rebate the agency could pocket.
The cost of AI
With a hint of schadenfreude, Blackwood Seven reckons AI could put between a third and a half of a traditional media agency’s staff out of work. Doubters question whether an independent agency, even one backed by venture capital, has the resources to make the huge investments required in computing power and data and operating systems.
Media networks, with billings running into tens of billions of dollars, have proved resilient in the face of countless threats before. But it will be hard for them to embrace a Blackwood Seven-style, media-neutral approach when they are tied into share deals with leading media owners.
The media industry has so many problems (think ad-blocking, viewability, fake views, lack of third-party verification for Google and Facebook) and technology is changing so fast that it would be a brave chief marketing officer to insource most, let alone all, of a brand’s media spend. But the mere fact that it is on the agenda is a portent of things to come.
(This article first appeared on CampaignLive.co.uk)
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