Dive Brief: 

• Ninety-one percent of U.S. advertising agencies are either currently using (61%) generative artificial intelligence (AI) or exploring use cases (30%) for the tech, outpacing other groups including marketing organizations and the general business population, per a recent Forrester report. 
• Large agencies are further along the generative AI adoption path, with 78% of respondents at agencies with more than 201 employees saying they leverage the tech compared to only 53% of small agencies, or those with less than 50 employees.  
• More than half of respondents expect generative AI to have significant or very significant impact on key aspects of their agency’s ecosystem in the next two years, though concerns remain around legal liabilities, copyright infringement, data privacy and security.

Dive Insight:

Generative AI has moved from the theoretical to the practical in 2024, according to Forrester’s recent report, titled “The State of Generative AI Inside U.S. Agencies 2024.” More than three-quarters of respondents said generative AI is a disruption for their agency. Twenty-nine percent of respondents said it is a major disruption that will change their business forever.  

Right now, most of that disruption is happening at creative agencies. Some 69% of respondents at creative agencies reported they currently use the buzzy tech. However, 57% of respondents at media agencies said their agency has begun using generative AI, and that percentage will likely rise as teams figure out new ways to leverage the tech’s speed, insights and innovation.

The latest report from Forrester is derived from a joint survey with the American Association of Advertising Agencies (4A’s) fielded during April and May. Respondents were decision makers with titles of vice president or above at U.S. agencies. 

Respondents identified four key areas of an agency’s ecosystem where generative AI will have significant or very significant impact: how an agency creates content (76%), the agency marketplace (71%), how consumers interact with the work created by an agency (69%) and what content an agency produces for clients (62%).  

One main area in which agency executives are hoping to derive value from AI is productivity. Around of the respondents using (54%) and exploring (46%) generative AI indicated they were looking to the technology to improve the speed and quantity of creative ideation and production. Indeed, 74% of respondents at agencies using the tech said aiding creative ideation and brainstorming is a high or critical priority. Nearly half (49%) said that generating assets for dynamic creative optimization is a high or critical priority. 

Agencies are also using generative AI to summarize audience insights and media reporting, with 59% of respondents using the tool to prioritize organizing consumer audience data sets into insights and 49% using it to summarize marketing performance results. Many are also using it to augment internal workflows and improve productivity, such as creating consumer profiles and personas, analyzing competitors and transcribing and summarizing calls and presentations.  

Despite widespread adoption, barriers remain. Chief among them are legal concerns, such as IP ownership, attribution, copyright infringement and delineation of liability. Ninety-four percent of respondents exploring and 83% of respondents using generative AI indicated these issues were challenges. Other concerns include data privacy and security, governance and risk, reliability, accuracy and bias. Notably, employee resistance is also expected to be a barrier to adoption. 

“This human obstacle stands apart from the others because employee concerns exist entirely within the agency but are irrationally unpredictable and pertain to employees’ emotional safety,” according to the report. “Employee resistance or lack of AI expertise stands ready to undermine agencies’ value, product, and technology investments as well as a decade of agency business model transformation.”