How will AI impact Brands? Branding & Marketing? Agencies?

AI changes how we brand, do branding & marketing and run agencies – here’s our perspective on what change will look like.

AI. It is disrupting our easy lives. At tremendous scale. And extremely fast. How do we react?

AI is considered by many as the 6th technological wave – it doesn’t immediately replace WHAT we need to get done, but it does disruptively change HOW we can get things done.

When it comes to brands, branding & marketing and the way agency owners run their businesses, the question that is going through the minds of most agency owners, as well as an increasing number of client minds is what impact will AI have on our space?

Productivity. Speed. Efficiencies. Effectiveness. Cost. How will AI affect how we operate?

How will companies, brand teams and us, their partner agencies get things done in the future?

With the speed in which AI development is moving, many “thought leaders” are staying far away from making predictions – not wanting to be burned on a wrong prediction or reminded by a wrong call from a future critic.

But, isn’t it just fun to look into the future? Let’s not be afraid of predicting things wrong. Let’s be really afraid of not looking forward at all. Is it not better to spend some time in deep thought and reflection on where our space is heading? To actually have a point of view, rather than avoiding the topic all together? Let’s lean in a bit. Move forward based on assumptions. Whenever wrong, slightly off or whenever expected motion is moving with a different speed we can always adjust the way we react.

We’re not afraid to take a POV, so if you are ready for it, please read on and see how we think the age of AI is coming for us.

Let’s start with what will NOT change

NEED FOR PRODUCTS – Until AI fully takes over and rids the planet of all of us burdensome human units, people will still consume products. Humans, like it or not, need to eat, drink, use personal care or home care products. AI will not change that so quickly.

SUPERIOR USER VALUE – Products that deliver superior value will have the best chance of long-term brand success. The age of AI will become increasingly noisy. Brands that continue to practice boardroom thinking and focus on shareholder value over user value are extremely at risk.

ACTIVE SHAPING OF PERCEPTION – Even in the age of AI, manufacturers in the consumer goods space will still actively want to control how their brands are being perceived. Aligning activity, expression and execution to the desired brand image they seek, will not change. How and through whom such execution are being realized however, could change significantly.

Competitive Landscape

EXPONENTIALLY MORE CHOICE – Consumers will be presented with exponentially more choice for the same amount of needs they have always had. Opportunistic industry leaders, followers, distributors, private label creators and OEM manufacturers will use AI-provided data to push products even harder & faster, into more and more geographics, trying to grab share where there is share for the taking. The result? crowded, cluttered shelves with increasingly more choice.

AI CREATES MORE NOISE – Quick and dirty AI-based variations of ads will exponentially add more messaging noise to what we already feel is a very noisy world currently. While our mental filters will not be able to process exponentially more incoming messages, getting a brand and its executions to rise above the noise, will become increasingly challenging.

PRICE PRESSURE AFFECTS ALL FUNCTIONS – Increased choice, will automatically put pressure on product pricing. AI needs to be embedded on the manufacturer side to drive cost of goods reductions, process optimizations, supply chain improvements, organizational structure efficiencies, marketing efficiencies etc.

AI WILL LEVEL THE PLAYING FIELD – AI will level the playing field in categories and industries that were thought to be impenetrable. New incumbents arrive on the scene disruptively impacting markets and market shares. While industries are always being challenged. AI will facilitate more and faster challenges by fighter brands that want to take a piece of the action.

Consumer Behavior

MORE NOISE MEANS INCREASED FILTERING – With the increase of noise, the existing behavior (especially under younger consumers) will result in filtering and blocking branded content even harder. AI tools will block unwanted, spammy content. Creating better quality content or less obvious branded contents, so that messaging still reaches the consumer will be needed.

DECISION FATIGUE DUE TO NOISE – The increased use of AI together with busier shelves and increasingly more choices will result in decision fatigue with consumers. With product choice thinking consuming too much mental effort and energy, consumers are likely going to be much less responsive to branded messaging.

AI = THE NEW SEARCH – Brands will need to own the way AI talks about their brand, when prompted by users. User search behavior will move from Google queries to CHATGPT-style conversations about a brand. Controlling the way AI informs, educates and inspires a purchase becomes an entirely new discipline in the agency space.

AAA REPLACES AIDA – In the age of AI, the old school AIDA model (Attention – Interest – Desire – Action) will change to a new AAA approach: Attention — AI check — Action. Consumers will increasingly rely on recommendations from their prompts on what product purchase decision they will make. AI will directly influence behavior. With more information power at their disposal, consumers will value the opinion of AI, especially in high-involvement categories.

AI-ENABLED FRIDGES OR MOBILE APPS WILL BE GRANTED AUTONOMOUS PURCHASE DECISION POWERS – In some cases, consumers will totally tune out and give apps or smart household fridges autonomous control to make purchase decisions (within a certain budget and within a set amount of time). Especially repeat purchases for low involvement categories will benefit from this new found AI-powered brand loyalty.

ALGORITHM = ATTENTION GATEKEEPER – Social Platforms where consumers live / spend most of their available time have already become the new advertising platforms. More and more will these platforms dominate the way brands can access consumers attention. AI Algorithms become both ad-blockers and gate keepers at the same time. They control 100% of which branded messaging consumers are exposed to.

TRADING ATTENTION GETS MORE EXPENSIVE – Getting the attention of the consumer becomes a more expensive exercise. Getting the AI algorithm to show your brand to an audience you chase becomes more costly. With fewer platforms and strong algorithms in control of what messages consumers are exposed to, brands will require higher investments to get their messages across. Ultra-competitive categories where AI can directly drive performance might sky rocket consumer acquisition cost.

ALGORITHM AIDS DISCOVERY – New products will be “discovered” online – in social feeds, through product placement in online content, through brand x creator collabs, through celeb endorsement or viral content.

Product Innovation & NPD

FOCUS BACK ON FUNCTION – In a world of increased choice and brands that don’t deliver on promises they make, consumers will fall back to looking for functional performance first. Does a branded product actually work? Do I see a noticeable effect, or not. If not, the next generation of consumers will move on fast. AI will help them validate brand choices or find better alternatives when products disappoint in providing real solutions.

ME-TOO STRATEGIES WILL FINALLY DIE  – Companies that have relied for too long on follower or me-too approaches are at increased risk of becoming irrelevant. AI will make it even easier (reducing moat) for brands to copy, and the increase in junky me-too solutions will result in most “low quality” solutions being ignored by consumers. Originality is more needed than ever. Unique and real product / value propositions will secure the right to win.

FASTER INNOVATION CYCLES – NPD will move faster as AI will make insights and data available at increased speed. Brands will need to move faster as copy-cat behavior will occur faster. More trial and error attempts will be made as brands attempt to innovate in a relevant manner. Cycles for Innovation will shorten as consumers become more demanding and as competition will increase.

BRAND INNOVATION BECOMES A CORE FUNCTION – AI will unlock thinking and insights to anyone interested in any category. Putting Innovation front and center will be key to success in an AI-powered age of agility. The innovation function will need to become a board-level seat that many brands need to fill with urgency and intentionality. Value creation for consumers as the one and only real KPI for success of the function.

INDUSTRY AT RISK FROM CREATORS & INFLUENCERS – AI democratization + the continuing creator economy movement + the continued rise of influencers will result in new product development and innovation and the emergence of new brands that will have lead-generation, attention and desire built in from the start.

➤ Inventors / people with ideas (of their own, or powered by AI) will now have the ability to execute easier.
➤ The rise of craft will start to affect every FMCG / CPG industry. With more content and AI tools available to bring ideas to life the creator economy starts to invade the CPG / FMCG space.
➤ Kick-starter-like platform with new product wait lists / sign up options, combined with globally reaching D2C platforms, will create early proof of concept for new innovations that consumers appreciate, this will require much less investment (past moats established by industry) and further provide access for disruptive start-ups and entrepreneurs.
➤ Industry giants as well as AI-based VC funds will back promising new product ideas and fund creators to get skin in the game early.
➤ More resources are spend on catching early waves, spreading bets in the hope of hitting something big.
➤ Influencers, celebs, anyone with a following could become a serious challenger, maybe even competitor.

FILL NEEDS OR DIE – Brands that don’t deliver on actual need-fulfillment will die. The same way as the iPhone quickly eclipsed Nokia and in the same way over 90% of Fortune 500 companies from the past became obsolete and disappeared from the scene, because they could not innovate fast enough. Brands that don’t keep up with faster changing consumer needs and more disruption in the category will disappear. AI will add tremendous force and speed to the process.

Brand

FASTER BRAND EVOLUTION CYCLES – The world of your brand will start rotating a lot faster. Gone are the days of relaunching, modernizing and revitalizing brands every 2-3 years. Brand relaunch cycles will reduce to yearly refresh intervals at first and ultimately transition into constant relaunch cycles. Brands will find themselves in a constant race to remain relevant. Many legacy brands as well as brands owned by family business conglomerates are at risk of becoming too slow at adapting and will see great market share loss, possibly death in the process.

PRODUCT BEFORE BRAND – Brands made up of only of story and style, without real product performance backing up promises, will not live long. Functional performance will start to play a larger role in an increasingly crowded market place filled with disappointing solutions.

SHARP, FOCUSED VALUE PROPOSITIONS – Brands need to occupy a SNICKERS HUNGER BUSTER-like single minded benefit, or mental association. Whilst it might be hard to realize such focus being the multi-message marketers we are. It’s unlikely that we’ll be successful in cutting through the increasing noise with complicated messaging. Focus and thy shalt win.

EXPONENTIAL CUSTOMIZATION WINS – Where we used to have the local, global debate on how brand execution should be handled. Being able to customize messaging as well as the brand solution to segments within your audience, even up to an individual level, becomes a right to win. Utilizing AI to go from A/B testing brand messaging into 100% customized and individualized messaging, adapting aspects of the value proposition to engage a specific individual’s unique needs can give a brand a very unique and new competitive advantage.

BRAND AGILITY WILL REPLACE BRAND STRATEGY – While strategic anchors will remain, gone are the days of long-term brand planning. Brands will find themselves in an increasingly reactive state. A state of constant flux both on the category side as well as the consumer side. Strategically reacting to constant change in the external environment and exponential increase in change, being extremely agile will become a new competitive advantage.

USER-GENERATED CONTENT – Brands will rely more on user-generated content, replacing traditional advertising budgets and agency executions. Companies will engage creators, not just agencies for more diversity, relevance, real-ness, authenticity in content. The marketing focus will shift from creating bland content for social media pages (that no consumers pay any attention to anyway) to entertaining, fun, creative, unique user-generated content (that still feels on-brand)

SHAREABILITY & VIRALITY – 2 New KPI’s that will start to dominate content creation are Shareability and Virality.

BRAND MANAGERS BECOME COMMUNITY MANAGERS – Managing an active community of users and creators will become the new frontier in brand management.

ARROGANT BOARD ROOM THINKING WILL KILL LEADING BRANDS – Chasing shareholder value through window dressing and quick tactical gains will become a road that leads to the ultimate demise of the brand. Chasing long-term user value, instead, will be the only path to generating shareholder value. Arrogance in the boardroom, not considering any and all outcomes and being complacent or underestimating the competitive forces that will be unleashed at much greater force will kill market leading brands.

LEADERS SHOULD LEVERAGE RESOURCES AND CAPABILITIES TOWARD FUTURE SUCCESS – Leading brands should stop the lazy wait-and-see mentality where they let fighter brands create new market segments and educate users, before they then finally become active, swoop in with a clone that copies the success approach of a fighter and should start to actually unlock resources and capabilities they have, taking the initiative to leverage the advantages they have, to relentlessly chase user value creation, creating new competitive moats through rapid innovation and deeper listening, which they are uniquely positioned for – before fighter brands start to beat them at it.

Brand Design

THE EMPHASIS ON BRAND WILL INCREASE – AI tools and the ability to quickly adapt, clone and copy creative styles will makes world class execution available to all brands out there, not just exclusively to industry leaders with deep pockets. Having a real “BRAND” will become the most valuable asset to an FMCG / CPG player. The ability to control perception and behavior through disruptive ideas, concepts and stories and matching distinctive styles will become increasingly difficult (due to AI’s ability to clone and adapt) but will at the same time become exponentially more valuable for those that really get it right.

CREATIVE PROMPTING RESULTS IN EVEN MORE OPTION SEEKING – With the ability to quickly “prompt” design revisions, we will likely see an increase in the demand to see various options and modular adjustments by clients. There will likely be an increase in demand for speed at the same time. With more options presented more frequently and faster, clients will be overloaded in options (at lower or same cost and less or same time).

➤ Clients will want to see more options
➤ Clients will expect options to be turned around much faster
➤ Clients will expect revisions to be more economical.

CLIENTS WILL SUFFER FROM DECISION PARALYSIS – Having more options to choose from, will create more uncertainty and doubt on client side. Reaching the right decision becomes more challenging. Allowing AI to replace reasoning, will make it even harder for client teams to make decisions. Especially next-generation younger marketers will be impacted as they have grown up with AI and have not practiced too much hard thinking by themselves. Utilizing AI to reach desired outcomes faster, instead of giving you exponentially more to think about, needs to be carefully balanced to avoid decision paralysis.

SHORTENING OF BRAND REJUVENATION / REVITALIZATION / MODERNIZATION CYCLES – With AI capable of quickly cloning successful creative styles, there will be a need for brand leaders to shorten brand rejuvenation cycles. We will see brand change cycles shorten gradually – from current best practices of making changes every 2-3 years, to more frequent changes – at first yearly, then moving to a “forever, all-the-time and ongoing” approach to constant rebranding and revitalization.

EXTREME VERSATILITY IS THE NEW CONSISTENCY – Brand Identity design in the future will evolve to the point where you can think of it as a social media timeline – a timeline that constantly is being updated, with asset distinctiveness, richness, and constant asset evolution layered in as a mandatory, to ensure attention is won. With constant shifts, changes and evolution at its core – so the timeline (brand identity) will never look boring. Brand versatility, flexibility and change will become the new brand consistency.

BRAND STYLE NEEDS MEANING BEYOND DISTINCTIVENESS – Distinctive assets need to be rooted in concept, story or meaning. Capturing a USP or RTB of a brand. It no longer will be sufficient to just have enough quantity of distinctive assets in your brand toolkit, as clonability increases and as other fighter brands, even clones and lazy brands will be able to leverage AI to close the execution gap that industry leaders currently enjoy. Having your distinctive brand assets rooted in real brand truths will make them more meaningful to your brand.

STRONGER NEED ON MORE DISRUPTIVE, VIRAL, SHAREABLE CREATIVITY – Shareability and virality will become new KPI’s of brand design – both in the creation of the brand idea or concept as well as its (visual) style as AI easier facilitates cloning of creative styles with speed. With the increase in noise in the branding space, there will be a need for more disruptive, cut-through creativity – content that is shareable or able to go viral will be key.

UNIQUE BRAND EXPERIENCES WILL REMAIN RELEVANT – at the moment of purchase or at the moment of attention / consideration or research into a solution for a need, branded experiences will play an important role to create a unique fit to a problem.

Point of Purchase

AI WILL ACCELERATE AND ACCOMODATE BETTER VIRTUAL SHOPPING EXPERIENCES – Advanced AI coding tools will remove the monopoly that large developers have in the tech space. AI capabilities will bring Metaverse-like concepts to reality faster, which will change how people shop – creating virtual supermarket shelves in a virtual room within your home, will reduce the need for physical stores and allow a reimagination of what retail looks like.

➤ Supermarkets will exist in your home.
➤ Consumers will be able to shop a virtual shelf from their sofa’s.
➤ Even fresh produce can be examined virtually and selected
➤ Groceries will reach you via fast delivery

AI CHANGES IMPULSE PURCHASE – For higher ticker items, AI will become a deal finder for consumers – a quick picture of a product and an AI prompt to ‘help find me the best deal for this product’ + an instant BUY NOW feature will put pressure on traditional retailers, enable online resellers and bring about changes to the existing retail landscape.

NEW AI-POWERED ‘SINGLE CLICK’ SHOPPING PLATFORMS WILL EMERGE – Whether owned by traditional retailers, existing online e-commerce platforms or created by entirely new players, such as perhaps iPhone and Samsung or Google or Meta. The retail landscape will change completely. New ways of shopping of product will evolve. AI will automate discovery of choice and facilitate purchase decisions with greater ease (at an expense to manufacturers).

Agency Operations

EMBRACE AI, YESTERDAY – AI will be extremely disruptive to the way we conduct business. Agency owners must start to allocate time, people and resources to experiment with AI on every aspect of business. Starting (same as all client briefing deadlines we get… yesterday!) You cannot sit by and wait. You cannot put your head in the sand and think this will blow over. AI is here to stay. As the owner YOU are responsible your agency and people are using it.

AI = INSTANT PRODUCTIVITY & EXECUTION – AI’s most immediate impact: improvement of productivity & execution capabilities. Utilizing it in the right way, agencies will be able to think & work harder, deeper, smarter if they utilize, embed and integrate AI into core time-consuming day-to-day operational activities. Here are a few examples:

➤ Project proposals / methodologies are put together faster.
➤ Cost are issued faster.
➤ Client presentation decks are put together faster, with more in-depth thinking.
➤ AI-enhanced client servicing teams will be able to provide basic strategic support.
➤ Certain jobs will become obsolete – taken over by prompting-enabled software suites
➤ Stock imagery will be replaced by prompting.
➤ Prompting will result in being able to push out more options faster.
➤ Design finalization can be automated almost instantly
➤ Once assets are agreed – smart systems will take over design roll-out, adaptation & 360 brand world executions.

EXECUTIONAL CREATIVE ROLES ARE IN DANGER – Executional creative roles are at stake – junior and mid level designers that are less involved in concepting, but more in adaptation will be replaced by prompt-masters (or need to master the prompting skills themselves). Basic video editing, retouch work and artwork roles will also be at stake. Those in that space will especially need to learn how to prompt and master AI tools to make themselves valuable enough in an AI dominated creative landscape.

YES, TO AI FOR INSIGHTS – AI can play a fantastic role as a brain sparring partner, and close knowledge gaps. use it to widen / deepen and enrich your insights perspective. Since clients anyway do not pay you in most cases for insights – it’ll be a free way to add some quick value.

NO, TO AI FOR INTERPRETATION, STRATEGY & CONCEPTS – While it is tempting, try NOT to use AI to craft your concept spaces, brand ideas or come up with the creative solution for you. Why? As guardians of the brands we look after, we should always look forward and whilst AI will happily offer you its opinion and thoughts – it will always be based on information and decisions of the past. For unique, fresh creative directions, the unique human perspective, our instinct, gutt feeling and human intuition,  AI will struggle much harder to interpret insights correctly. Try not to use it (unless you have that client that absolutely doesn’t want to spend anything on strategy.. then you have my blessing…)

FORCE HARD, DEEP THINKING MORE – Agencies positioned as think tanks and thought leaders will have a higher chance for survival. Agencies that stop being yes-men to clients, but position themselves as sparring partners that bring a unique perspective and expert thinking that clients don’t have in-house will always be needed.

INCREASED “INHOUSING” WILL FORCE AGENCY REIMAGINATION – In the Age of AI agencies will need to urgently re-invent themselves. Old traditional business models that have been broken for quite some time and have started to force increasingly more in-housing behavior at client side. Only with a focus on business continuity will agencies truly uncover what the positioning and value proposition of agency X.O will look like. The future likely revolves around culture & insight interpretation, creative translation of insight into forward-looking, fresh creative ideas – a space agencies have become lazy in, as clients that for years were happy with me-too approaches will not survive.

EMBRACE PERFORMANCE, RESULTS AND OUTCOME – The more variables and layers you add to a successful solution – the harder it becomes for an AI system to find that solution for a client – Agencies will need to innovate and can no longer ignore what we have done for so long – if you are heavily focusing on creative execution, find yourself discounting your services you are not occupying a high value added space and are at strong risk of becoming irrelevant.

DOUBLE DOWN ON HUMAN RELATIONSHIP BUILDING – Spend time with your clients. Expand your agency – client relationships. Understand their challenges as they experiment with inhousing and AI systems development. Evolve your agency model to help address new challenges that will inevitably arise.

AGENCIES THAT CANNOT INNOVATE WILL DIE – The agency space is notorious for sticking to broken models, continuing with ineffective ways of working, not being able to keep up with the change at which the industry is moving. Whilst in the past, renaming and rebranding were the ways to keep up appearances, actual change will need to happen to stay alive. Thought leadership is essential. Owning insight, understanding of commercial context, creative translation into solution and strategy, coupled with financial result and measurable outcomes will be key for survival to the creative industry.