By Kimeko McCoy • November 29, 2024 •
Ivy Liu
This article is part of our Confessions series, in which we trade anonymity for candor to get an unvarnished look at the people, processes and problems inside the industry. More from the series →
A growing number of brands, like Klarna and Mondelēz International, are turning to generative AI to streamline their marketing operations. Increasingly, companies are leveraging AI for ideation and content creation, aiming to reduce costs, scale and expedite the process. While marketers tout AI cost savings as a win, the shift has sparked concerns about the impact on creative agencies, especially junior level creatives who often handle the more routine tasks that can be automated by AI.
Earlier this month, Coca-Cola dropped its annual holiday commercial using Real Magic AI, Coca-Cola’s artificial intelligence platform powered by OpenAI. The spot ruffled feathers across the marketing industry, brought up concerns about AI’s impact on the way ad agencies get paid as well as questions about why marketers are pushing AI ads that seem to flop as many consumers aren’t into them.
In the latest edition of our Digiday Confessions series, in which we exchange anonymity for candor, we hear from an agency founder and chief creative officer on AI’s potential impact on creatives and how C-suite executives are thinking about the cost savings.
This interview has been lightly edited and condensed for clarity.
You were part of a boardroom conversation where the topic of AI replacing junior-level jobs was broached. What happened?
I witnessed a conversation in a presentation where private equity [execs] was asking questions about: How can we eliminate the human capital to find more profit in these companies that we own? Obviously, the number one line item at creative companies are the people. Just taking a very objective look at the numbers, an investor or private equity person or a board member would look at that giant line item that is the creative department, and it’s, “How can we decrease the expenses of that line item while increasing the profit?” So the question was asked: “How can we scale this business and eliminate that human capital line item?” For whatever reason, the conversation was: “Eliminate the juniors who, for lack of a better word, are doing the grunt work and replace that with AI.”
So the quiet part of the AI hype was said out loud, behind closed doors? What prompted that conversation?
From an investment perspective, if you think about where the business is going right now, it’s very performance driven. Every client wants to be able to quantify results.
When it comes to crafting those ads and then producing them, it takes an army of people to do that. The high level thinking is already done. The hardcore strategy, communications, all that stuff up here is already done. It’s down here, in what I call the coal mine and the salt mine, that the grunt work has to be done. It’s obviously expensive up here, but it’s very expensive down here because it takes a lot of people. That’s where they really want to start to — and nobody wants to say this right here, but they want to eliminate those jobs.
As a C-suite creative, what was your reaction to that talking point?
My first thought was, who’s going to mentor up? When you start to master the craft down here and you start to elevate and become a mid-level or senior, there aren’t going to be those people. Mid to junior-level creatives, they hone in their craft in paid social and paid digital. That’s really where they learn the art and craft of copy and design coming together.
What I had heard was this is a standard operating procedure in APAC [Asia-Pacific]. I’m not really that familiar with that market. It’s already being done. For me, that was the big eye opener. This has gone beyond theoretical. This is being put into practice right now.
If it’s standard operating procedure overseas, did the conversation you were privy to give you the sense that it’s only a matter of time before that trend starts in the U.S.?
[The conversation] was very high-level. It was more a question of, “Why aren’t you doing it? It’s being done over here. If it’s OK that they do it over there, why is it not OK that you’re not doing it over here?” It wasn’t this big push, but it was a real eye opener that it’s being done over [in APAC]. There was a quiet expectation.
Seems there’s growing pressure around AI to produce cost savings. How is that impacting your agency?
The conversation now is, “I want to see your AI staffing plan” and “I want to see specifically the people that are working on my business that are AI pilots” and “What stack of tools they’re going to be using on my business?” What they’re trying to do is compare apples to apples — an AI thick staffing plan versus a human thick staffing plan, and what are my cost savings? That is starting to become a very transparent process in the RFI [request for information process]. Now agencies are like, “Oh fuck. We’ve got to get people using AI, fucking around with it, trying to do different prototyping,” and things like that to be able to fulfill those RFIs.
The way that we’re approaching it is that it has got to be top down. We’re actually allocating more time for the leaders to be able to embrace and explore and prototype with AI — so much so that my creative department partner, that is his number one job. So from the top down on every pitch all the thinking, all of the expectations that we have from the top down have an AI perspective to it.
Has your agency had any conversations around layoffs of junior positions and have AI do that work?
It’s not a trade off conversation. It’s: “How can we make everybody that we have a super hero?” An agency full of people with an AI super power is what we’re trying to do. Because the human element, the expertise and the fine art honed and craft, that’s always necessary. No, we have not had that conversation [about laying off junior creatives] at all.
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