Generative AI tools are providing significant economies of scale for small creative agencies, helping them recover from years of margin erosion. However, clients are increasingly expecting these savings to be reflected in their costs, posing a challenge for independent agencies. Many are not yet fully attuned to this client demand for efficiency from AI capabilities, which have become essential in creative pitches. Major advertisers like Unilever and Kimberly-Clark are effectively leveraging these tools to enhance productivity and reduce costs in their marketing campaigns across multiple markets.
Generative AI tools promise enormous economies of scale for small creative agency teams. Good news for independent agencies struggling to find some breathing room on the ever-squeezed bottom line - until clients begin expecting those savings to be passed along to them.
According to Observatory International pitch consultant Lucinda Peniston-Baines, not all indie agencies are awake to client demand for efficiencies to show up on their receipt, despite the fact that AI capabilities have become table stakes in creative pitches.
They see it as an internal efficiency tool for them to ... regain some of that margin erosion they've suffered over so many years. Clients, by contrast, are expecting [savings] now.
Unilever and Kimberly-Clark are, for the moment, well ahead of the crowd. The former is using generative AI tool Pencil Pro to pump out hundreds of assets across its top brands in 14 markets, a setup that took the best part of a year to put in place.
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