Thanks to generative AI, advertising’s business models will be reinvented

Advertising and disruptive technologies. In many ways, you can’t have one without the other. In past years, disruptive technology meant programmatic media buying, SEO, and mobile. Today, it means artificial intelligence— more specifically, generative AI. Brands and consumers expect the industry to remain two steps ahead of the digital curve and while AI is not new to the industry, generative AI has caused many agencies to shift priorities and the way they operate. In 2024, it will be more about augmentation, not automation. 

Agencies are faced with a Catch-22 scenario: They are concerned that AI will significantly change the agency landscape while also investing millions of dollars to stay relevant for clients who are looking for AI-enabled marketing. And this won’t change anytime soon. According to a report from WPP’s GroupM, AI-enabled marketing today accounts for nearly half (45%) of all advertising globally, and by 2032, AI will influence 90% of all ad revenue which is more than $1.3 trillion. As Marla Kaplowitz, president and CEO of the 4As, recently stated, “Gen AI is here to stay, leaving the advertising industry with a stark choice: adapt or become irrelevant.” No one can afford the latter. 

Agencies must embrace the opportunity to transform their revenue model. Let’s explore one option: value based pricing.

Full story at Fast Company.