AI to Revolutionize the Agency Landscape in 2024, Predicts Forrester
AI will revolutionize the agency landscape by 2024, predicts Forrester As concerns about AI misuse grow, agency reviews will surge by 10%, potentially leading to the demise of digital agencies as this transformative technology becomes more widespread
Article Brief:
AI will become permanently embedded across several areas of agency operations in 2024, according to predictions shared by Forrester.
One focus will be on developing customized AI products that utilize a client's unique creative intelligence and first-party data to create highly personalized campaigns. The utilization of low-cost AI content tools is anticipated to boost agency revenue by attracting more clients, ultimately leading to a reduction in the need for in-house marketing teams.
The increasing use of AI is also expected to bring forth new challenges for agencies. The concern regarding AI misuse will prompt a 10% increase in agency reviews, and there is a possibility of digital agencies completely disappearing from the industry as marketing as a whole becomes predominantly digital.
Article Insight:
In the report "Predictions 2024: Agencies," the upcoming year's agency landscape is analyzed, with a strong emphasis on AI. By 2023, generative AI is already implemented by 56% of B2C marketers, while only 17% of in-house agencies utilize this technology. However, Forrester predicts that AI will become a crucial cost-saving tool in the near future, as CMO budgets may fall short of covering the necessary expenses for an effective marketing strategy. The proliferation of affordable AI-generated content will intensify the need for differentiation, leading to a greater emphasis on creativity by the end of 2024.
AI technology has already caused significant disruption in the industry, being used for gimmicks and to enhance efficiency, which has raised concerns regarding accuracy, brand safety, and intellectual property. A considerable majority (61%) of AI decision makers are worried about privacy and data protection, while 57% are concerned about potential errors in the AI output. As the use of AI continues to increase in 2024, uncertainty is expected to rise, prompting agencies to face increased scrutiny and potentially drive new business opportunities. According to Forrester, 38% of B2C marketers plan to evaluate their media agency, while 37% plan to assess their creative agency in the next 12 months.
Forrester suggests that as generative AI becomes prevalent in agencies, the need for agencies specializing in digital-specific services is likely to diminish. These agencies may either be incorporated into larger integrated agencies or merged with other providers of digital services.
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.
