AI and curation are the media agency evolution imperatives
Opinion
Media agencies were designed to deliver curation in an analogue world. A new model is needed for a new era, one that starts with curation, AI and supply-side intelligence.
News of GroupM’s speculated rebrand to WPP Media is the latest signal that the media agency model is at a crossroads.
M&A activity, the adoption of AI and evolving data strategies are resulting in the disappearance of agency brands and reduced headcounts.
Independent agencies are on the rise, while a considerable number of brands are building in-house media capabilities.
With such upheaval all around, media agencies are having to re-think their value proposition in order to survive.
AI is no longer a nice-to-have for agencies
Of course, many agencies have been at the forefront of AI adoption and developing data-driven approaches; Publicis Groupe’s acquisition of Epsilon more than six years ago triggered a wave of agency investment in data and technology that still continues today — just last month GroupM acquired InfoSum to expand its data and AI capabilities.
And the use of AI in agencies is no longer limited to just analysis. AI is now the creative engine behind advertising. It’s being used to generate dynamic creative assets such as banners, videos, and copy on-the-fly, matching inventory and audience context in real time.
While the expansion of AI into more use cases can be a strategic differentiator for agencies, it won’t be for long if every agency follows the same path.
To compete, agencies must move beyond traditional creative and media silos. Innovations currently being driven by the supply side can help them differentiate and streamline their business model so it’s fit for the future.
Navigating a broken programmatic landscape
Advertisers look to agency partners to help them solve their problems. Today’s digital advertising landscape is a fragmented one, where brands struggle to connect with their target audience in an efficient and sustainable way. With signal loss and privacy concerns hampering the ability of advertisers to reach their goals through a commoditised programmatic ecosystem, evidence suggests that agencies are drifting apart from demand-side platforms (DSPs) and instead getting closer to the supply side.
And it’s on the supply side where agencies can tap into data and tools that benefit their brand clients. Private Marketplace (PMP) deals, with advertisers and agencies working directly with publishers to set up programmatic environments, emerged as a way of increasing efficiency in digital advertising — but they have considerable shortcomings.
While PMPs offer access to high-quality, premium inventory and give buyers greater control over where ads appear, they’re limited in terms of scale and highly manual, involving a lot of work to set up. Agencies that really want to move the needle for their clients must think beyond PMPs and look to innovation being driven by the supply side.
Curation brings agencies and their clients closer to the supply side
While curation is nothing new — and first emerged on the buy side, with simple inventory and domain lists compiled for each brand and fed into DSPs — it has come a long way in recent years. Curation now sits firmly on the supply side and makes quality, brand-safe inventory more discoverable for advertisers looking to reach specific audiences
Simply put, curation connects buyers and sellers, reducing the number of intermediaries to create a more valuable and transparent process for both advertiser and publisher. By streamlining the supply chain, curation addresses the deficiencies of programmatic, making it more efficient for buyers and minimising the operational and resource burdens for publishers.
Through curation, agencies can help their advertiser partners find the right audience — regardless of where it is or what platform it sits on — for their brand and reach them in the most direct way, taking advantage of the unique, first-party data intelligence on the supply side.
This process can be thought of as Audience Path Optimisation. With all of the packaging, targeting, and optimisation happening on the supply side, this is more efficient than trying to do these tasks on the buy side.
And, agencies can further use the supply-side insights that curation unearths to inform their creative process. Together with the AI-enabled generation of creative assets, this allows them to build advertising experiences where the creative is not only contextually relevant but in perfect harmony with the environment it’s seen in.
Evolving for a digital world
Media agencies were designed to deliver curation in an analogue world — a model that doesn’t work for digital environments.
By incorporating curation tools into the data-driven and AI capabilities that they’re already building, agencies can ensure their clients’ campaigns cut through the noise and deliver measurable results.
Agencies that can tap into data, AI, and supply-side intelligence to inform every stage of a campaign — from planning to activation to measurement — will be the ones that can offer a truly differentiated service to their brand partners.
And in today’s environment where survival is by no means certain, the time for agencies to pivot is now.
James Leaver is CEO and founder of Multilocal