Madison Avenue Braces for the ai Ai Apocalyps

Is The Advertising Industry Staring Down ITS “let them eat cake” moment?

Thouses of Media and Tech Executives Are Descending on France for the Annual Cannes Lions Festival (June 16 To 20) Panels at Meta or Spotify Beach, or On One of the DOZENS OF YACHSHTSHTS DOCKED IN THE HARBOR. The Talk of the Town Is What kind of veteran Media exec frames as the “insane chaos and disruption” that ai is beginning to unleash as the Majoor ad agencies and buying. Consolidation.

IT ALREADY IS BEING FELT at the VERY TOP OF THE INDUSTRY: Just Days Before The Cannes Lions Kickoff, WPP CEO MARK READALED HIS INTENTION TO DEPART at YEAR’S ENED, REASSURING STAFF Transforms Marketing ”and that company is equipped“ to face the Future Confidently and Capture the Opportunities ahead. ”

And omnicom and ipg are lurching Toward A $ 13 Billion Megamerger, WHICH IS Premison on Creating An Ad Giant That Will Be “Poured To Accelerate Innovation and Harness of the Sigification. Technologies in this era of exponential change, ”as omnicom Ceo John Wren Said WHEN UNVEILING.

That exponential change, ad agency veterans say, is bassed on a few Things: The Practice of Buying and Selling, WHICH WASS ONCE HASSHED OUT IN SMOKE-FILLEDSYDYSA AND ATREMSY EVINGZYA AND Automated, and Ai Will Only Turbocharge that as Potential Ai Agents Tasked with Creating Full Media Plans Are Deployed.

On the Creative Side, AI Will Dramatical Change the Creation of Ads Themselves. META, FOR EXAMPLE, WANTS TO HAVE AI Tech in the Market Allowing Brands to Create, Target and Deploy Ads by the End of Next Year. Across The Industry, Tools Are Being Developed That Alow Brands to Upload Images of Their Product, Which Can Be Quickly Iterated Into Dozens of Ads or Video Spots.

The end result is a business that Could be radically smaller. “I’M Afraid that in a couple of years, the big ad agencies will be a shadow of whaty today,“ admits the former ceo of a top Madison Avenue Firm. “Nothing Can Match Human Creativity and Experience, But From Research To Placement To Creative, A Lot of What The Agencies Have Done Can Be Replicated Pretty Well by AI.”

Not everyone agrees that end is near. And that includes alex schultz, the cmo of meta. “WE BELIEVE AI WILL AGENCies and Advertisers to Focus Prew Time and Resources on the Creativity That Matters. And We’re Seeing Agencies Using Ai in Ai In Way Alig. On LinkedIn Last Month. “Advertisers, Including Our Marketing Teams at Meta, Also Rely on Their Agencies to Make Decisions Across Channels and Across Platforms. While We Athink. Agencies Play Is Going to Become Ever More Important Through Their Ability to Plan, Execute and Measure Across Platforms. ”

Still, The Ai Revolution is Coming. Last Year, Coca-Cola Released an ad Created Using Generative Ai Tools, and In June, The Prescription Market Kalshi Plaked An ad Dringing the nba Finals New Video Generation Model. Thomas Iljic, The Product Lead at Google Labs Responsible for Veo 3, Tells The Hollywood Reporter That kind of comes to communicating the tech for advertising, IT “Sems Extremely Promising, But I Wuld Say Is Still Very Early in Terms of Gauging The Size of The Market.”

While the Ad Business Will Face the Brunt of Disruption First, The Media Business Writ Large Will Have to Grapple with The ConsequenCes – and Whats Comes Next. Everyone in Hollywood is aware of the threat that genetative ai poses to production, but lessce focus have been placed on the disruption to processes. Meta and Google Dominate Digital ADS, AND WHEN Amazon Is Added In, The Three Companies Goble Up More Than 60 Percent of All Ad Dollars (Excluding Cina), Per Magna, and Anasts Tech giants.

“A Key Risk We Seie for Smaller Platforms is the Further Entrenchment of Large-Scale Platforms and the Inability to Compete on Scale of Capital, Engineering Resources and [first person] Data, ”Goldman Sachs’ Eric Sheridan Wrote May 7.

Streaming Service Are Among Those Smaller Platforms, Serving Up Digital Ads to Consuumers. Tech giants have a “Very Different Cost Model, and IT’s Allowed Them to Pave Revenue Into AI, Into Ad Targeting, Into Tech Areas Where I Think Traditional Media. Scott-Dawkins at Wpp Media.

But Traditional Media is giving it a go.

Major Media Companies Have Already Reorganized TheMSELVES TO ENABLE more AUTOMATED AD BUYING AND TRANSACTING, WITH DATA-Heavy Approaches, Targeting, and Gurantees. The Scatter Market that used to take the plake over games of Phone Tag Now Happy Automatical in Custom Software.

As the Digital Giants Roll Out More Ai-Driven Ad options, Streamers and Publishers Will Have No Choice But To Follow.

Of Course, Some Streamers Are Already Thinking About the Looming Disruption. At this year’s Upfront, Both Netflix and Amazon Unveiled Ai-Powered Ad formats, that use the tech to bland an existing ad to whatver content of the viewer is watting. Tiktok unveiled it own ai ad format at cannes lions this week. Others Will Follow.

But Entertainment Giants Do Have an Ace Up Their Sleeve: For Major Ad Deals Involving Top Brands, The Human Touch Is Likely to Remain, and WitH Live Sports Still Among. to disipate anytime soon. One ad sales exec prediks that companies will create more big, tailored bundles for clients that use Sports as a hub, with of the other content like news and entertainment RIM, more tailored to on-Demand Entertainment Fare.

But The not-too-Distant Future Also Carries With It enormous uncertainty aroundy aroundy whate content confront will be watching, WHERE they watch it, how ads are. HAVE SEMED LIKE SCIENCE FICTION NOT LONG AGO.

CREATOR-DRIVEN PLATFORMS LIKE YOUTUBE, Instagram and Tiktok Have Disrupted the Consumption of Content, and the Creation of Content, and AI Could Further Fragment that World.

“I Think What Maybe People Aren’t Ready for, Is Whata Happens with The Explosion of Machine Genered Content or Ai Genered Content, and to What Extetent Dou. Scott-Dawkins Says. “To what kind of extent do they and tamp that down to keep the sort of authentic, person-Driven Narrative that they’ve with USers Historically?”

YouTube CEO NEAL MOHAN, FOR EXAMPLE, TOOK TO The Stage at Cannes Wednesday to AnnoUnce that veo 3 wound be addted to itts. “The Possibilities with ai are limitless,“ Mohan Said. “A Lot Can Change in A Generation. Entertainment Itelf Has Changed More in the Last Two Decades than Any of Time Time in History. Creaters Led this Revolution.”

For What It’s Worth, One Top Tech Exec Says That While Ai Content on User-Generated Platforms Is Inevitable, Human Creativity Is Still Likely to Be Am. Tools. The Future of Ads Will Likely Be Similar.

“Consumers Already Expect Advertering to Be Relevant and Engaging and Buying Experiences To Be Seamless; TOSE Expectations Are Only Going to Accelerate In The AGEER of AGER AI,“ WPP MEDIA CEITII, ”WPP MEDIA CEIT. with the Launch of the Company.

Or as Apple Vp Toor Myhren Declared at A Cannes Lions Event This Week: “The Good News is ai is Not Going to Kill Advertising. The Bad News Is Ai Is Not Going to Save. Believing in What’s Always Made this Industry Special: Human Creativity. ”

SO it goes that perhaps it is the art of buying and selling ads that Itself by by Suppplanted by ai, Even If Humans Retain Somblance of Creative Control.

JPMorgan Analyst David Karnofsky, in A June 9 Report, Outlined Discussions with Media Buyers Who Describe “A Minority Report-esque World Where Advertising Is Personalized Through Virtual Reality, Digital, and Physical Media. Consumers May Start to Outsource Purchasing Decisions to AI Ai Agents (WHICH We Are Already Seeing in the Clothing Industry with Stitch Fix). ”

However Even in that World Outlined by Jpmorgan Where Science Fiction Becomes Reality, There is a Silver Lining for Old-Fashioned Advertising.

“In this scenario, Media buyers Highlightd that ai buyers mayers Understand a consumer’s goals, budget, habits, and use that information to make decisions on youers. wound Still Play An Important Role in Providing Information that Prompts Consumers to Highlight and Update Their Goals/ Instructions for Their AI Agents, “Karnofsky Writs.

No Need to Call That 1-800 Number or Visit That Website, Just Tell Your Ai Agent About that Ai-Created Super Bowl AD, AND IT WILL DO DO The REST.

This Story Appeared in the June 18 Issue of the Hollywood Reporter Magazine. Click Here to Subscribe.