In 2024, the global agency landscape, including in Malaysia, is set to undergo a seismic shift as AI becomes a permanent fixture, according to insights shared by Forrester. This transformation is expected to impact various facets of agency operations, with a focus on personalised campaigns driven by bespoke AI products trained on clients’ creative intelligence and first-party data.
Low-Cost AI Tools Will Boost Agency Revenue
One significant outcome is the rise of low-cost AI content tools, anticipated to boost agency revenue by attracting more business. Simultaneously, this surge in AI adoption is predicted to diminish the scope of in-house agencies, as external agencies leverage cost-effective AI solutions.
However, the integration of AI is not without challenges. Forrester predicts a 10% increase in agency reviews fuelled by concerns over AI misuse. In this evolving landscape, digital agencies may vanish altogether as marketing becomes predominantly digital.
Forrester’s report, “Predictions 2024: Agencies,” envisions a future where AI plays a pivotal role in shaping the agency ecosystem.
As of 2023, 56% of B2C marketers are already utilising generative AI, compared to a mere 17% within in-house agencies. Despite the growing adoption, Forrester anticipates AI’s role to evolve from an efficiency tool to a cost-saving mechanism.
With Chief Marketing Officer (CMO) budgets often falling short of executing comprehensive marketing strategies, the rise of low-cost AI content tools is expected to deepen the need for agencies to differentiate themselves through creativity by the end of 2024.
Amplify Concerns – Increased Scrutiny and Uncertainty
AI’s impact on the industry has not been without controversy. Its use for gimmicks and efficiency enhancements has raised concerns regarding accuracy, brand safety, and intellectual property. A notable 61% of AI decision-makers express apprehension about privacy and data protection, while 57% are concerned about potential output errors.
Forrester’s projections indicate that the escalating use of AI in 2024 will amplify these concerns, fostering increased scrutiny and uncertainty. Paradoxically, this heightened scrutiny is expected to spur new business activity for agencies.
Thirty-eight percent of B2C marketers plan to review their media agency, while 37% intend to evaluate their creative agency in the next 12 months.
Potential Disappearance of Digital-Specific Agencies
A notable shift foreseen by Forrester is the potential disappearance of digital-specific agencies as generative AI becomes ubiquitous across agencies. These entities may either merge into larger integrated agencies or find integration into other digital services providers.
Without doubt, the agency landscape is on the cusp of a revolution, with AI at its core. Forrester’s predictions point towards a future where agencies harness the power of AI for personalised campaigns, navigate challenges posed by increased scrutiny, and adapt to the changing dynamics of the digital marketing realm.
The key to success, as outlined by Forrester, lies in agencies’ ability to creatively differentiate themselves in the era of AI dominance.
