Are AI Agents Spelling The End Of Advertising Agencies?

As artificial intelligence continues to reshape digital commerce and marketing, AI agents are emerging as the latest development catching the attention of major advertisers and agencies. While the technology remains in its early stages, several prominent brands are already exploring its potential to streamline operations and enhance productivity.

Two startups, Adaly and Anthrologic, have recently entered the market with AI solutions specifically designed for advertising professionals. These companies are positioning their tools as productivity enhancers rather than wholesale replacements for human expertise. Anthropologie has already signed on as a client with Anthrologic, while Hershey's has been beta-testing Adaly's technology.

The fundamental promise of these AI agents lies in their ability to handle routine computational tasks that typically consume significant human resources. "They can basically do anything that a human can do on a computer," states Tyler Pietz, CEO and founder of Anthrologic. This includes pulling reports, analyzing media budgets, and processing large datasets – tasks that traditionally require manual intervention from marketing teams or agency partners.

The technology's architecture leverages multiple large language models, including ChatGPT, and accepts both voice and text inputs. What sets these solutions apart is their ability to be trained on company-specific data, enabling them to perform targeted analyses within an organization's unique context. For instance, an AI agent can scan log-level data for discrepancies or assess the impact of inflation on regional advertising expenditure.

The AI angle here represents a significant shift in how marketing organizations might structure their operations. Traditional marketing workflows often involve professionals navigating multiple platforms and managing various data sources. Kyle Csik, co-founder of Adaly, highlights this pain point: "Marketers are still logging into 15 different platforms every day." The promise of AI agents lies in their potential to consolidate and automate these fragmented processes.

Major industry players are taking notice. Holding companies, which have traditionally provided these services to advertisers, are developing their own AI capabilities. Omnicom has introduced its proprietary AI agent, while Dentsu has partnered with Microsoft to create internal AI tools including Dentsu DALL-E and Dentsu-GPT. Havas is also in the process of developing its own AI agent solution.

However, industry veterans maintain a measured perspective on the technology's current capabilities. Mike Bregman, Chief Activation Officer at Havas, suggests that while these tools can streamline certain processes, they cannot yet replace the nuanced understanding required for complex media partnerships. "They can help streamline some of the budgeting process, but they're not going to have nuance of how to work with Disney and Warner and NBC or Google and Meta," he notes.

The technology also faces several challenges. AI hallucinations – instances where AI systems generate incorrect or misleading information – remain a significant concern. Even the technology's creators advocate for maintaining human oversight in the process. As Pietz acknowledges, "The reality is that we're still in such early days, I don't know if we can fully and confidently solve all the potential issues that can arise."

This current landscape suggests a future where AI agents serve as powerful assistants rather than replacements for human expertise in advertising. While they may significantly reduce the time spent on routine tasks, the complex decision-making and strategic planning that characterize successful advertising campaigns will likely remain firmly in human hands for the foreseeable future.

The implications for advertising agencies, however, could be far-reaching. As AI agents become more sophisticated, they may represent an existential shift in how agencies operate and deliver value. While current implementations focus on augmenting human capabilities, future advances could automate entire segments of traditional agency work - from media planning to creative execution.

This evolution could force agencies to fundamentally reimagine their role in the marketing ecosystem. The most successful agencies will likely be those that effectively integrate AI capabilities while developing new value propositions centered around strategic insight, creative innovation, and complex relationship management that machines cannot easily replicate. Yet, for agencies that fail to adapt, AI agents could indeed signal the beginning of a significant industry transformation.

The Quick Read:

• Perplexity AI revised its merger bid for TikTok U.S., proposing a new entity where the U.S. government could own up to 50% post-IPO.

• Trump is negotiating a deal for Oracle and U.S. investors to take control of TikTok’s global operations while ByteDance retains a minority stake.

• OpenAI’s Canvas now supports HTML & React rendering, making it a stronger rival to Claude Artifacts.

• OpenAI's o3-mini reasoning model debuts in ChatGPT, offering faster responses, improved accuracy, and free access for all users with rate limits.

• Meta is rolling out a limited ad test on Threads, using user data from Instagram and beyond to serve targeted ads in the feed.

• Apple’s latest update turns AI features on by default but disables AI-generated news summaries after high-profile misinformation issues.

🌐 RawuserAI - Personalized website customization using AI

📊 Zocket - A generative AI model trained with local and global purchase data for the highest level of marketing performance.

⚖️ The calibration game - Get better at identifying hallucinations in LLMs.

🤖 Strut AI: Quickly capture projects, notes, drafts, and more in collaborative workspaces powered by AI.

🖥️ Sheet Copilot - Run tasks in Google Sheets using AI.

😍It was great, all I needed

🙂Good, not great

🙄It sucked