Dive Brief:
- AI will become permanently embedded across several areas of agency operations in 2024, according to predictions shared by Forrester.
- One focus will be bespoke AI products trained on a client’s own creative intelligence and first-party data to create highly personalized campaigns. Low-cost AI content tools are expected to help agencies increase revenue by attracting more business and result in the shrinking of remits for in-house shops.
- Growing use of AI is also expected to present new challenges for agencies. Concerns over AI misuse will lead to an increase in agency reviews of 10% and digital agencies may disappear from the landscape entirely as all marketing becomes digital marketing.
Dive Insight:
“Predictions 2024: Agencies” analyzes what the agency landscape may look like in the coming year, with the report putting a heavy emphasis on AI. As of 2023, 56% of B2C marketers already use generative AI in their efforts, compared to just 17% of in-house agencies. However, Forrester predicts AI will be used as a great cost saver in the months ahead as CMO budgets fail to cover what is needed to execute an effective marketing strategy. The rapid expansion of low-cost AI content will deepen the need for differentiation, leading to an increased focus on creativity by the end of 2024.
AI technology has already shaken the industry, having been used for gimmicks and to increase efficiency in ways that are raising questions about accuracy, brand safety and intellectual property. Sixty-one percent of AI decision makers indicated concern over privacy and data protection while 57% are concerned about output errors. The escalation of AI use in 2024 will only lead to mounting uncertainty and the increased scrutiny is likely to drive new business activity for agencies, according to Forrester. Thirty-eight percent of B2C marketers already plan to review their media agency and 37% plan to review their creative agency in the next 12 months.
As generative AI spreads across agencies, the need for a digital-specific agency will likely disappear, per Forrester. In the months ahead, some may be rolled up into larger integrated agencies or, they may be integrated into other digital services providers.
The report also predicts rising demand for PR agencies ahead of the election. Election advertising spending is expected to hit $11.5 billion in 2024.
