How Digital Agencies Can Adapt To An AI-Driven Industry

AI and machine learning have impacted several industries far and wide, but perhaps one of the greatest disruptions is happening in advertising. Below are just a couple of examples.
The Trade Desk, an online advertising marketplace, receives an estimated 9 million ad bids per second. The company uses an in-house artificial intelligence engine called Koa to analyze bids in real-time and make strong advertising recommendations, ensuring that the right ads are seen by the right consumers at the right time.

In November, Lexus released the first-ever AI-scripted ad. IBM’s Watson built the 60-second commercial’s basic flow and outline, and the creative agency fleshed out the full story. The commercial was well-received and highlighted a key way for agencies to incorporate AI into their daily work.

Some ad executives speculate that a full embrace of AI could mean their demise — that the more sophisticated the technology becomes, the less purpose a traditional agency would serve. But in my opinion, this fear is unwarranted. Agencies don’t need to run from AI; they need to learn more about it and use it to bolster their processes.

How AI Is Shifting The Ad Industry

Both AI and machine learning are innovating advertising in a variety of ways:

• AI corrects the spelling of keywords during online searches, which leads to the display of relevant ads and takes consumers to the right webpages.

• Machine learning helps with targeted advertising by using data and advertiser preferences to reach the right consumers.

• Speech recognition is what drives virtual assistants like Siri, Alexa and Google Assistant. On the surface, these assistants help consumers order groceries, dim the lights or pull up webpages. But they also play a major role in helping consumers search for and discover products, services and information. And their searches produce data that improves the accuracy of the speech recognition and ads that users see.

• Like the Lexus ad mentioned above, machine learning is being used to study advertising trends and to generate new content.

• AI can also “synthesize data and identify key audience and performance insights,” which leaves more time for agency staff to do more strategic and creative work.

Agencies are warming up to the idea of AI: CMOs are investing in AI technology, even as budgets shrink. And those who jumped on board right away are seeing major ROI: 82% of early adopters reported positive returns. Those who are resistant could find themselves in competition with partially automated agencies that have more eyes, ears and data to outshine them. So that begs the question: How can agencies prepare for an AI-driven ad industry?

How To Incorporate AI Into Your Agency’s Work

There are a couple of key ways to weave AI into your everyday work without tearing apart your current workflow:

Start small with A/B testing.

Our agency uses A/B testing to build audience sets, which we’ve found to be instrumental in our process. It saves us countless hours of reviewing ad sets and converting successful conversions into new sets.

But A/B testing doesn’t need to be so advanced. It can be as simple as releasing two similar ads with different slogans or sending out two newsletters with different subjects. AI measures the performance over a specified period of time and reports which version performed best. Then, you can decide how to move forward.

Although the ability to perform these tests is now mainstream and has been incorporated into most native platforms, getting it right can be tricky. If you are unfamiliar with A/B testing or have had frustrating results, I’d recommend trying the following:

• A/B testing should be run for a minimum of 1-2 weeks but no longer than 4-6 weeks.

• Test apples to apples. If you’re testing the effectiveness of copy, it should be tested solely against other copy, with no other changes to the ad.

• Understand that it takes time. Let your testing run to completion before deciding which direction you would like to take based on the information gathered.

Shift to audience buying and planning.

The traditional ad model focuses on media planning and buying, but AI has created a more consumer-centric world. It has given us the ability to focus on “audience buying” models as opposed to the typical “media buying” models we are all accustomed to. The data that’s aggregated from ad platforms provides insight into where our audience will show up and how. This information can then be used to purchase segmented space within particular areas of a given space. This information is typically dealt with at a much larger scale by publishers selling ad space than it is by an entrepreneur running Facebook ads, but the concept is the same.

For example, you are now able to look well beyond website traffic as an indicator of where an audience may or may not be. Start with market research. Develop an audience set based on that information, and A/B test it. You can always refine and test it again. Don’t just let the data pile up; take the time to understand it and use it effectively to define and target the right consumers.

While I’d recommend using AI for what can be automated, it’s important to place a higher value on the aspects of your business that can’t be. Ensure your clients understand the passion and expertise you bring to insights and creative. Also, don’t try to clear the tremendous barrier to entry of making your own AI systems. Instead, form partnerships with companies that already have great technology. And while partnerships can seem exciting, remember to always ask yourself: What values are they bringing to the table? How does this move my business forward? And what type of training do they offer to use their technology/platform?

It’s true: AI and machine learning are changing the advertising industry, but with the right mindset and strategy, you can make a seamless transition and still create value for clients and consumers. You might even stumble upon a creative breakthrough. This isn’t the end of the agency; it’s a rebirth.

Three Disruption Techniques Companies Can Incorporate Into Their Media Strategy

Disruption is an oft-used buzzword, typically referenced in relation to Silicon Valley tech startups that upend a traditional industry. Think Warby Parker using the direct-to-consumer business model to significantly reduce the cost of prescription glasses or Uber using its on-demand ridesharing service to make public transportation more convenient. But what does it mean to disrupt in media?

Just this March, Apple, once a leader in innovative hardware, pivoted to digital products. One of those products is News+, a subscription media service through which users can access over 300 newspapers and magazines for $9.99 a month. This gives traditional publishers a new way to monetize their readerships, but more importantly, it threatens the old model of magazine subscriptions. Why form a loyal, singular relationship with one title when you can have them all for the same price or less?

How do you disrupt?

There’s a common misconception that disruption involves reinventing the wheel and that this reinvention happens overnight. Disruption is actually a lengthy process. Disruptive companies are generally ahead of the curve, and their ideas might be so different that it takes a while for people to adapt or take their new development seriously. It takes a great deal of time to change the perspective of an entire market.

Disruption typically happens in four stages:

  1. First, there’s a disruption of the incumbent. A company introduces a new product with a fresh point of view. This product may be dismissed by the incumbent, and it may not solve the greater issue within that specific industry. But it shows that there’s room for progression.
  2. The new company keeps advancing its product’s capabilities and attracts more users. The incumbent starts to view the new product as a threat and actively works to discredit it.
  3. The new company uses feedback and learnings to further refine the product and start reaching a wider consumer base. Other new companies may even surface with their own iterations of the product. The incumbent rushes to start incorporating some of the new product’s capabilities into its own product, in an attempt to keep up and fend off the competition.
  4. The new company has now completely refined its product and changed the industry in the process. The incumbent may try to frame the competitor as a leader in a new market and try to retain its leader positioning in the “existing” market.

Disruption is essentially changing the way something is done and refining that process again and again until it’s taken seriously. There are three key ways to do this in media:

Say something new.

In media, you can disrupt the industry by forming a unique perspective on an issue that hasn’t been addressed by the competition or by the market as a whole. This starts with an idea and an in-depth analysis, and it’s really driven home through creative execution.

For example, Singapore Red Cross wanted to increase engagement for a forthcoming blood drive. Blood donations are necessary and important, but they aren’t something the general public associates with excitement or advancement. In fact, the only urgency tends to exist around natural disasters or crises. So, Singapore Red Cross changed the way it spoke about blood donations. The company used the slogan, “I’ve got _ in my blood. What’s in yours?” The campaign then filled in the blanks with phrases like “standup comedy,” “blogging” and “music,” and featured photos of young, well-known social media influencers.

The campaign tied blood donations to individual identity and to the personalized nature of social media. This generated a new conversation and resonated with a new, younger generation. Singapore Red Cross didn’t reinvent the technology for blood donations. They simply changed the way they talked about them.

Show up where people won’t expect you.

Disrupting your media strategy could be as simple as changing your channel of communication and doing something that’s unheard of in your industry.

The New York Times is one of the most celebrated newspapers in the country. Despite a heavy online presence and abundance of email newsletters, it’s a beacon of traditional journalism. To update that image and connect with audiences in a new way, the paper changed its approach through a chatbot experiment.

During the 2016 Olympic Games in Rio, deputy sports editor Sam Manchester started sending out personalized text messages to subscribers who’d opted in. The messages didn’t feel like news stories; they were constructed like texts and featured observations similar to those you’d send to a friend. They were personal and informal, and Manchester was speaking to readers in their language. Over the course of the Games, he sent out 70 texts and received a whopping 30,000 responses. Clearly, readers enjoyed the new form of connection and responded enthusiastically.

Sometimes, disrupting could mean taking an existing communication platform and using it in a fresh, new way.

Embrace the old, but do it in a new way.

The first magazine on record was published in 1663; they’ve been around for centuries. But the monthly subscription model is struggling to survive in the age of the 24-hour news cycle and ongoing digitization. Writer and columnist Roxane Gay had a novel idea — turn the magazine into an event.

In 2018, Gay created Unruly Bodies, a pop-up magazine that was hosted through online publishing platform Medium. She curated work from 24 writers and released it incrementally over the course of a month. Instead of asking readers to make a one-year commitment to her content, she created a sense of urgency by releasing it for free on a popular platform for a limited time only.

The unique approach showed that the magazine industry as a whole doesn’t have to die. It just needs to find new ways to reach readers and generate excitement.

Final Words

Disruption is about innovation, but that innovation isn’t necessarily rooted in a new technology. In media, disrupting the industry is about creative thinking and execution. How can you take something that already exists and frame it in a way that no else ever has? If your company truly aims to disrupt, this is the road to take.