How Marketing Agencies Fight For their Life Against Aggressive AI, Budget Cuts, and Uncertain Clients

Sam Altman, CEO of OpenAI, predicts that AI will replace 95% of Marketing Agency Work in 5 years at nearly no cost. So, where do agencies establish and create value in the coming decade?

In 2034, a decade from now, what can we expect to stay the same? What about providing professional services to companies that need branding, marketing, and communications will they be the same, and what will be different?

What will the latest iPhone look like? Will it be a wristband or a ring? What will an electric car look like? What would a search engine do for you? Will we have pairs of glasses to speak to? Or contact lenses that translate the world around us? What will artificial intelligence (AI) do for us or to us by that time? How will the most affordable smartphone transform the African continent? What will the cyber cafe look like by then, and what purpose will it serve?

This is what I've been trying to crack and solve for the last two weeks. Last week, I focused on the central thesis of asking what will not change in the next decade. If you haven't read that article, you can start there.

Since Nendo does research and marketing work, it is fair to say we're a two-in-one business. The two business units operate separately with separate clients, portfolios, sectoral experience, and more. But there are synergies and a shared vision.

There are numerous AI-based tools trying to augment, enhance, and possibly replace working with an agency today.

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Agencies, as we know them, are in Grave Danger.

The agency business has been under duress for the past decade. Gone are the days when branding, marketing, advertising, and communications agencies ruled the roost.

In the 'good old days', agencies commanded heavy multi-million dollar (a year) retainers and were given the keys to the kingdom with media budgets. The aura, mystique, and enchantment of the creative business were something businesses, brands, and organisations deeply respected and revered.

Make no mistake, it wasn't without challenges, but there were famed blue-chip accounts that everyone was after, and the big agencies often won and exchanged among themselves every few years.

Today's Agency is Changing; Tomorrow's Agency Might be Unrecognisable

Today, the parts of the professional services firm in branding, marketing, advertising, and communication rest on a solid foundation, but not one that's as sure. If we unpack the critical moving parts, we can reflect on what will stay the same and change.

  1. Professional Services Fees

Long-term always-on retainer agreements have been replaced with flexible project-based approaches. Some clients even bid on a brief-by-brief basis with shortlisted suppliers.

  1. Creative Services - 'The Big Idea'

This is still in demand, but the fear of the future is that generative AI will bring unwanted and unexpected competition to this field - even in Africa. I wrote more about this in a speculative piece on how Nendo would 'build a ChatGPT-like AI creative director to replace the industry' before.

That said, consumer insight, creative spark, and the ability to change behaviour and perceptions are still significant add-ons. When done right, this is why the business may still stand in a decade. There is something to convincing clients that they can't, as David C. Baker said (though I know the quote comes from someone else), you can't read the label from inside the jar.

Mark Ritson goes on to say it another way; 

"The great catch of marketing is that the minute you start getting paid to work for a company, product or service, it is impossible to see that product the way the customer sees it.

He goes on with the kicker...

And the first law of marketing is to recognise that and realise you will never see the product as the customer sees it again."

I often quote this to bring our client to some form of silent reflection, humility, and mental agility. Clients are seldom the ideal advocates for their own customers or target audience. On some rare occasions, they are, but they often develop rose-coloured glasses and overconfidence because they work for the brand or organisation. The best way to tell this is if they get defensive on behalf of their organisation. If they do, it can show that they are jaded and less objective overall. They've drunk their own Kool-Aid and might be in denial that they are objective enough to put the end consumer first, even at their own expense—more on this in an upcoming column from me.

This is one of the services with resilience, but there is growing competition from junior creatives. Sadly, ageism is increasingly playing a role as well in the industry.

  1. Media Buying

Research firms continue to have an edge here as traditional media (radio and television) continues to be a very effective channel to reach millions of households. It is, on balance, more effective than digital alone in Africa and is likely to remain so for at least the next 5 to 7 years, despite the rise of social media, mobile phones, and the internet.

Purchasing media and figuring out which slots, times, and audiences to target is both an art and a science. This has shifted somewhat, with some clients making in-house direct buys with television and radio stations. Google, Meta, and other online advertising firms have brought competition for large accounts by offering account management and value-added services. They do take on some of the risks of spending.

This will be hotly contested going forward. Marketing agencies can't rely on hearing a $1 million budget and having it wired to them to charge 1-3% in commissions while investing it. Instead, they compete against the platforms themselves, particularly for the large accounts.

AI will continue to grow in its familiarity and sophistication for digital media buying. The optimisation, rule-setting, behavioural targeting, and adjustments can be done better with a 'media buying copilot than with human labour logging on every few hours to assess data and make adjustments. Human judgement is valid, particularly when developing and testing hypotheses. Or look at wicked problems which are more prevalent in Africa today.

The Future of Agencies is Uncertain

The competition in the advertising industry business model will be fierce in the coming years. Mergers, acquisitions, pivots, and closures are on the horizon.

However, the window to evolve remains. The ability for agencies to create productised services, consulting practices, and progress from selling time for money to business value creation or digital transformation is still wide open.

I wouldn't write off the industry by any means, but I can't say I'm not worried. Sam Altman, CEO of OpenAI, recently in March 2024 noted that artificial general intelligence (AGI) will so radically transform marketing that, by his estimate, 95% of tasks being performed by marketing agencies, strategists, and creative professionals will be handled by AI - at nearly no cost. The current timeline for AGI is approximately five years out.

He has picked a side. I talked about an analogy of a Kenyan blood sausage called 'mutura' some weeks ago. It isn't this simple for Africa. Time will tell.

If you'd like to see Nendo answer your business or marketing brief or incorporate AI into your business, brand, project, or enterprise, reach us at, and we'd be glad to connect.

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