Artificial intelligence (AI) and machine learning (ML) can now sell people personalized insurance policies. Who would have thought? As AI and ML programs have become increasingly smarter over the last few years, so have the results. Programmatic ad-platforms, like tech giants Facebook and Google, successfully reached millions upon millions all around the world and generated conversions aplenty. With technological progression accelerating at a never-before-seen pace, will we start to see AI also take over the marketer planning, thinking, producing, and strategizing phase? Will marketing and media professionals become obsolete?
Just as factories became gradually overcome by the latest automation innovations that cut costs, so too might the marketers devising campaigns in office buildings, one day. While the Terminator won’t be trying to sell anyone jewelry anytime soon, we might find our marketing teams depleted by machine learning.
Many of us were fortunate to be graced by the charming, advertising titan Don Draper. Thanks to AMC’s classic drama Mad Men, Don became the poster child of the prototypical advertising agency. At Sterling Cooper, and later McCann Erickson (now just “McCann”), Draper and co. devised brilliant advertising schemes over cigarettes, whiskey, and office flirtations that viewers came to love.
But those days were the golden age of advertising and marketing firms. Times have changed drastically since.
Even when we cross over into the real world, we can see real powerhouse firms like McCann seeing their golden years slip away. According to the Bedford Group, in 1984, the average client stuck around for just over seven years. Now, the average client stays with an agency for just under three. Consequently, according to Ad Age, “U.S. agency revenue rose a tepid 1.7% in 2018, the weakest growth since the ad market emerged from recession”, and the primary reason is cost. Just two years later, Business Insider reported that the ad agencies market in the U.S. is anticipated to lose 50,000 jobs by the end of 2021, largely due to shrinking client budgets for their services.
The inflated agency model, as we see in the revered show, has become costly to agencies. As a result, companies have slowly pulled away, looking for cheaper, distributed solutions – via freelancers or small agencies to tackle individual projects, or in-house options, rather than hire bloated agencies that manage all the collective marketing needs. Every route at which operational costs can be cut, companies and institutions are taking them to maintain a competitive edge or improve efficiency, especially in the digital transformation and automation era.
Across several sectors, we have witnessed the integration of AI and machinery. Manufacturing is a primary example. Robots and automation on factory floors improved labor efficiency and boosted manufacturing output, ultimately replacing many assembly line jobs. In medicine, we see the integration of artificial intelligence into disciplines like radiology, where technology is helping physicians diagnose patients more confidently and quickly with the aid of technology, even if it doesn’t outright replace them. The tech takeover might not transform into our Hollywood-esque Terminator, but it’s certainly leaving its mark on our economies. Marketing won’t be immune.
As the digital transformation era rapidly rolled in over the last 15 years, businesses began to understand how they needed to reposition themselves. Users went digital and naturally demanded that businesses cater to the new paradigm. Companies rapidly shifted more and more of their budgets toward digital marketing. In the beginning, most of the operations were not automated, but the tools provided by the tech giants initiated change.
Facebook and Google, who accumulated users in the millions, and their easily extractable data, realized this was a gold mine. Marketers would flock to digital channels to sell their products, spending billions to achieve results. And as they understood the value of their platforms, they sharpened the tools to provide more detailed insights to advertisers and more optimization and remarketing options, spending billions to enable advertisers to fully automate campaigns, essentially as if they were on “autopilot mode”. These tools not only offered better results but also convenience and less time to manage campaigns. Martech is taking this to the next level.
Just as AI, ML, and algorithmic technologies had crept into other sectors, so too did they permeate marketing. The latest advances with these kinds of technologies and companies have afforded marketers the ability to do it themselves in-house, without the need to turn to agencies for help. AI programs and automation are now becoming ubiquitous symbols of this transition from human to machine. The dominant tech giants, Facebook and Google, are becoming the poster child for replacing the manual labor required to manage digital campaigns. Beyond the automation, new martech products are now filling content needs.
AI programs are now capable of creating ad copy and ad designs tailored to target digital audiences, eliminating the need to hire costly [agency] creative teams, much to the dismay of would-be, real-world Don Drapers. With enormous repositories of audience data available, complex AI software can now process it and create tailored ads on digital channels that are data-driven. This will open new possibilities and without the need for human intervention. Some companies won’t need this, but many will find it a fiscal- and labor-viable alternative to the traditional agency route.
Martech industry value rose over 20 percent, between 2018 and 2019, according to Statista, and COVID-19 is expected to accelerate this growth moving forward, with more digitization of marketing. According to a Gartner survey, CMOs in the U.S. and Western Europe found they spend 80 percent of marketing budgets on digital channels. They will also be spending more of their marketing budgets on martech tools in a move to cut costs and raise efficiency.
We may not see the likes of HAL 9000 sitting in marketing meetings bluntly saying, “I can’t do that, Dave”; or strategizing on how to sell the latest trendy fashion to users online, but the age of automation and tech integrations is in full swing and visibly happening all around us. It’s only a matter of time before martech phases out marketing agencies and places the power of all their costly labor into a computer chip.
Cover image source: Arseny Togulev