The agency world is in a significant period of flux, with the IPG and Omnicom merging, WPP smashing agency brands together and Publicis continuing to tout the supremacy of its One model, with clients able to access bits of previously disparate agencies.
Navigating these tectonic industry shifts is far from straightforward. It might have even cost Mark Read his job. However, Henry Cowling, chief innovation officer of S4 Capital’s Monks, believes agencies should not look to fight against the changes; instead, they should lean into a future where they no longer exist.
“When I joined Monks eight years ago, I was joining an agency,” Cowling told B&T in Cannes.
“Today, I think the job of an agency is to help your client replace what you do with AI. That is the role of an agency. What everyone frets about is that there will be a moment when that role is finished. I’m more optimistic on that front. Technology is in constant flux, but I think there has never been a worse time in our industry to be an advertiser… I suspect it’s going to be a major them in one way or another in every conversation that you have. I think there’s never been a worse time to be an advertising agency.”
B&T had the pleasure of fielding Cowling’s first interview during Cannes, alongside Jess Ross, Monks’ APAC VP of data and media consulting. Cowling admitted that he may feel different by the end of the week. However, he wasn’t all doom and gloom.
“There’s never been a better moment to be a company that can help your clients with technology, a company that can help your clients go to market in new and innovative ways. Data is a foundation of that, and the only way a CMO can get to market is mediated by technology in some form or another. If you can help your client with technology and creativity, then you have a value proposition,” he said.
Ross, meanwhile, added that she expects first-party customer data will become the “core ingredient” for success across the industry.
“If that’s the case, you have to accept that the broader agency landscape has to change radically in response to that,” she said.
“We talk about relevance as being a logistics challenge now. It is all about being able to get targeted messages that really hit people at the right time, in the right place, with the right message. [Despite] the promise of digital, it’s never been able actually to deliver on that before. Now with creative content production at scale, you really can do that. But you can’t if you’re chucking everything over the fence to an agency,” said the former Fairfax chief product officer and Telstra marketer.
“In-housing of marketing capabilities is a huge trend, it’s been happening for a while now, but [AI] will pour gasoline on it.”
Cowling and Ross’ comments, while punchy, are not uncommon within the S4 and Monks stable. Last week, head honcho Sir Martin Sorrell told the BBC’s The Media Show podcast (between taking swipes at his former business WPP and Mark Read) that AI would usher in a new “golden age” for advertising.
“If I think about it historically, the first golden age was around globalisation. We can say that’s finished… checked or stuttering. There’s more fragmentation coming. The other big force has been technology. We’ve had the internet revolution in the 90s, we’ve had the smartphone revolution in this millennium, and now we’re going through an AI revolution. It’s not just an AI revolution; it’s around quantum computing and blockchain…[AI] heralds a different era, and I think it’s a new golden era,” he said.
AI, and particularly agentic AI, has been one of the key themes from this year’s Cannes, whether on the Croisette, in the Palais or elsewhere. The tone of the discussions on AI has changed from last year, when there was a significant amount of doom and gloom. There is, however, a recognition that AI will change everything, from the way media is accessed and consumed, to how we interact with brands directly.
“We’re witnessing a complete, fundamental re-architecting of how information is accessed and monetised. There’s a big shift of power on the way, back towards people who have a direct relationship, frankly. The entire ad-supported media model is going to be upended,” said Ross.
“Fundamentally, the behaviours that have been in place since Google emerged are shifting from search to answers. Search has always been a proxy for answers. As Theodore Levitt famously said, ‘People don’t want a drill, they want a hole’. This is an incredible reorientation around customer need, which disintermediates all of the proxies in the middle.”
Cowling continued, “Yes, [AI] is massively over-hyped, but it still might not be over-hyped enough. The whole commercial foundation of the internet starts with search. We don’t realise it because these are the waters that we swim in. But the way marketers think about digital, customer experience, the whole customer journey, is predicated on an internet designed and commercialised around search. That is now fundamentally changing. It’s a nuclear bomb going off inside a marketing organisation.
“Yes, there’s the existential crisis on the publisher side, and everyone’s fretting about Google zero. We’ve been having some really interesting, almost philosophical conversations, like if an agent is poring over your content and you’re serving ads to an agent, is that still a view? Is that still a CPM? These are the questions we’re going to have to wrestle with. All of those constructs are going to be remade.”
While Cowling believes the challenge of AI for publishers could be existential, advertising agencies and brands are there. Yet.
“The ad industry is having an identity crisis. It might be too soon to say existential crisis but it’s our first meeting. I’ll come and find you on Friday. This is going to be the Cannes of the existential AI crisis. Whether people like it or not, that’s going to be the conversation on everyone’s lips,” he said.
“I think you’re seeing that in the work. I love this industry, I love the work that we put out. You see a lot of pushback against AI, and around digital generally still. It feels anachronistic to me. I’m very bullishly digital. Culture today happens on digital channels. Most smart cultural observers made that shift 5-10 years ago. I’m not saying there’s no longer a place for ‘real-world’ stuff, but in overall share of mind, it’s all happening on digital.”
As I’m writing this, it’s Thursday. In the intervening three days since we spoke to Cowling and Ross, their predictions about the future of the industry have certainly seemed prescient.
