The introduction of artificial intelligence (AI)-driven recommendations and automation into search engine marketing (SEM) platforms is a double-edged sword for most digital marketing agencies. On one hand, it presents a wonderful opportunity to cut costs, improve consistency in results for clients, and scale their business faster than ever before.
On the other hand, agencies working on flat fees need to continue justifying their retainer or risk a drop in revenue as competitors start to offer lower prices, and agencies charging for hours need to broaden their service or find new clients to maintain and grow their monthly pool of hours.
One of the first examples of AI being used in digital marketing was back in 2015, when the ad agency Saatchi and Saatchi, created what they referred to as the world’s first-ever artificially intelligent poster campaign.
They created a digital poster that used a motion sensor to read the reactions of people as they passed the poster. Essentially, the technology assessed whether people were looking at the poster or not (it didn’t interact with people in real time). Instead, if people weren’t looking at the poster, it would remember this and then alter or improve itself to improve view rates.
Photo of the M&C Saatchi’s AI billboard in London. Credit: M&C Saatchi.
AI has certainly come a long way since then, and products like ChatGPT and smart bidding have democratized AI and accelerated the impact of technology on digital marketing as a profession.
In the past, what differentiated an agency from their competitors used to be based on how well they could interpret data to manage bids and pull levers to squeeze the most out of a campaign.
The new game in town is being aware of and selectively adopting the latest technology, then layering it with a human’s ability for strategy and creativity.
AI empowers marketers to enrich customer interactions, improve efficiencies, and personalize communications. It helps marketers make sense of Big Data in greater depth and precision to better understand consumer behavior and intent across the buyer journey. The end results don’t take away from the marketer but augments their capacity, enabling them to do more with less. Rather than focusing on minute operational tasks, marketers can instead focus on experimenting with new campaign tactics and researching creative touchpoints to engage with customers.
— PAUL KORBER, ASIA PACIFIC PARTNER DEVELOPMENT DIRECTOR.
It’s a partnership
I’ve been around long enough to remember when Photoshop was first introduced, and everyone was saying that it would be the end of graphic designers. With the benefit of hindsight, we can acknowledge that it made their jobs easier and more efficient, with designers now able to use automated effects to create impressive work in half the time. Like Photoshop, AI and automated tools are just software that can be used as a tool to augment a digital marketer’s skills.
It’s critical now more than ever to have a mindset of embracing automation, because with the rate at which it has grown the last few years, the very viability of agencies will depend on how well they integrate it and work alongside it.
The future for agencies
So what does SEM look like in the future for digital marketing agencies?
- Almost no time will be spent sifting through campaigns to check for settings and targeting that can be improved or things that are broken (404 landing pages or credit card failures, for example). Automation can be used to highlight anomalies or opportunities, allowing the account manager to jump to specific actions rather than “surfing” through campaigns.
- Very little time spent pulling optimization levers like bidding and device targeting because the machines will be doing most of the heavy lifting there.
- Crafting strategies that align with the client goals will become a paramount skill.
- Campaign structure will become more important as a mechanism to deliver on the strategy, particularly as new campaign types include fewer levers to pull.
- High-quality creative will be more and more important, as AI delivers your video, image, and text assets to prospective customers. If we feed the platform bidding strategies with high quality and high-performing assets, then the machine will learn much faster and will deliver more consistent outcomes.
- First-party data and audience insights will increasingly be considered a valuable business asset, so account managers will need to be familiar with various customer relationship management (CRM) strategies and how to collect and integrate customer data throughout the various advertising platforms.
- Agencies will have tighter margins as staffing costs rise and clients expect more for less.
- An efficient and integrated tech stack will be the norm, from CRM to account management, billing, and reporting.
- Using processes within technology to protect digital agency management IP in the face of increasing workforce mobility.
- To reinforce the perceived value attached to retainers, agencies will need to better focus on engagement and relationships with their clients to develop a richer multi-touch model for clients that engenders loyalty to and trust of the agency as a whole, and not just the account manager they’re working with.
- New platforms will emerge and existing platforms will morph (like the new Bing—wow!), and successful agencies will be taking advantage of the early adopter advantage—lower cost per acquisition (CPA) and new audiences.
The most successful digital SEM agencies in years to come will be the ones with tight processes, integrated technology, and the skillset to understand and adapt to the signals provided by their tech.
They’ll also be the agencies who refused to be trapped by the fallacy of assuming that just because a certain thing in the industry has been a certain way, that it will continue to be that way, and further, defending “the good old days” as a default, without critically analyzing the change presented and deciding when and how to test and adapt.
Digital marketers and agencies, more than most, need to be forward focused and looking for the next wave of change. If discomfort with disruption leads to inertia, they’ll lose to agencies who embrace the opportunity introduced by a changing landscape.
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About the author
As the CEO of PPC Samurai, Shaun Bond is passionate about unblocking agency pathways to scale via strategic automation, new strategies, and robust and tested PPC processes—all with a laser focus on maintaining or growing client satisfaction and quality. With a lifetime love of mathematics and data diving, Shaun has trained thousands of agencies around the world. He is also the founder of Adpulse.app, an early stage AdTech platform that aims to distil the best of all the PPC Samurai team have learned and developed in the past 10 years, with a focus on easy implementation.