Reshaping the Advertising Industry: Driving Mutual Success in the AI Age

The swift evolution of the media landscape is catalyzed by shifts in consumer behavior and advancements in technology, including AI. These primary drivers of change have the power to redefine or even completely transform existing agency models and alter significant aspects of the advertiser-agency relationship.

As the future of work in this field becomes less predictable, organizations yearn for the data-fueled insights necessary to anticipate the resulting changes in the marketplace.

At the same time, advertisers are seeking better clarity on the connection between their marketing investments and business outcomes. Because agencies play a critical role in the creation of value and business impact, all involved organizations must prioritize these relationships for mutual success.

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What Is Driving Agencies to Change Their Business Models?

If it’s not broken, don’t fix it ... right? Not necessarily. Proactivity is invaluable in the advertising industry, and anticipating changes in needs, demands, and attitudes is paramount to reaching today’s (and tomorrow’s) audiences.

Below are a few key trends that are reshaping the way agencies do business and the future of work in the advertising world, based on a recently published study by the World Federation of Advertisers (WFA) and MediaSense:

Growing Focus On Commercial Transparency

Advertisers, like virtually any business, want to know how the agencies they employ are making money—a preference known as commercial transparency. The survey results reveal that “commercial transparency is a major source of frustration for advertisers,” with 75% of respondents saying they care how their agencies make money but only 28% believing they have transparency in how they do.

Prioritization of Strong Agency Relationships

This discrepancy in commercial transparency is mainly attributed to undisclosed revenue streams—a result of agency relationships that aren’t sufficiently collaborative or supported by industry best practices. Sixty-one percent of survey respondents anticipate paying their agencies more over the next several years, which illustrates an ambition to invest more in agency relationships. But once that partnership is established, advertisers want to know their ROI, which you’ll need meaningful data to gauge.

Increasing Reliance on Data for Driving Business Decisions

The future of work is rooted in data and measurement—a prevailing theme in the digital age. Designing techniques and workflows that enable faster measurement and optimization through AI-driven tools is essential for “deriving insight from ever-expanding data sets” and helping attribute media investments to business success. Many advertisers are willing to pay more for generative AI expertise while increasingly relying on agencies “to plug knowledge and capability gaps in their own internal teams.”

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How Do These Evolving Trends Impact the Future of Work for Media Planners?

Rapid technological improvements in AI have expedited the shift from manual tasks to automation on both the agency and brand sides. This change has significantly altered what the future of work looks like for these organizations internally, affecting numerous aspects of how they do business together. Optimizing this relationship for today’s advertising landscape means both parties must align on value, performance, and capability requirements.

For one, strategic expertise is still highly valued by advertisers—a capability that they are willing to pay agencies more for, according to the study. However, the rise of new, developing partnerships between humans and AI has redefined countless job roles. This phenomenon has maximized the need for certain competencies (e.g., data science and creative planning) while making others less critical (e.g., data entry and accounting) due to the advanced data processing abilities of AI tools. Despite 58% of survey respondents expecting to pay agencies less due to AI deployment, many agencies argue that its use will “improve productivity of their people, allowing them to spend time on higher value tasks.”

All of this points to the likely prediction that new, AI-supported roles will demand a mix of traditionally sought-after workplace skills and technology-specific competencies. This future of work suggests a significant shift in how agencies operate.

One example of the growing need for strategic partnerships to meet evolving AI needs is the recent merger of Omnicom Group and Interpublic Group—a $13.3 billion deal that will create the world’s largest advertising agency. According to Axios, the acquisition of Interpublic Group by Omnicon is directly attributed to the new industry opportunities presented by generative AI and other technological changes.

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How Can Advertisers Prepare for the Future of Media Planning Work?

Today’s agencies must evolve “to balance the need to meet advertiser requirements while maintaining sufficient profit margins,” which can only be achieved through a truly symbiotic business relationship structured around an outcome-based model. Implementing such performance-based approaches will rely on advanced data processing and management—a skill that’s increasingly outsourced to AI.

As a result, job roles and requirements are expected to continue to evolve with further adoption and advancement of AI technology. For this reason, advertisers must ensure they partner with a holding company that can meet the ever-changing needs of the advertising industry. Be sure to get with Guideline for the perfect balance of AI-driven excellence and human expertise.