Everyone at McKinsey is nervous, and agencies should be, too.
Because the generalist pitch (“We’ve seen a bit of everything, and here’s a deck about it”) is up against AI models that have read everything and don’t need to be staffed on retainer.
“If you look at what Fable says versus what your, you know, second-year analyst says, it’s kind of the same,” said Brian O’Kelley, CEO and co-founder of Apostra, during Advertising Week in New York City this week.
“If your job is to make PowerPoints, I’m not really sure that’s going to be super valuable in a world where in, like, 20 seconds, Fable can make me look really smart,” O’Kelley said. “This is the challenge for all of us.”
(It’s a challenge O’Kelley has a stake in. Apostra is the company formerly known as Scope3, the digital carbon measurement company he founded in 2022. Scope3 rebranded last month, completing its 180 pivot away from sustainability and toward agentic media buying. Sign of the times.)
Beyond the horizon
O’Kelley’s advice for agencies is that they can’t keep being everything to everyone, and we can already see that happening at the holdcos.
WPP is trying to become a technology company with WPP Open, its AI marketing platform, which it makes available to clients directly. Publicis is building an ad network around Epsilon, which it bought in 2019 and recently supplemented with its $2.2 billion acquisition of LiveRamp. And Omnicom, post-IPG, is pushing Omni, its Acxiom-fueled data and AI platform.
“Every agency, and this includes Horizon, has to make some pointed choices,” O’Kelley said.
Why bring up Horizon? Because Dane Kunkel, Horizon Media’s SVP of performance and transformation, was sitting right next to O’Kelley onstage.
Kunkel took the poke in stride.
His entire department “was spun up to help our clients transform,” Kunkel said, including enlisting agents not just for marketing purposes but across finance and operations, too. As AI automates more individual tasks, Kunkel said, someone has to be the “overarching brain” that connects the dots, from planning and buying to data and measurement.
“We’re pitching ourselves as new growth partners, because we’re going beyond the wall of traditional media planning,” Kunkel said. “We’re trying to change the way we’re serving [clients] and moving away from FTE models so we can drive outsized value, and I think AI helps us get to that point.”
To be fair, agencies are well positioned to serve as orchestrators – at least based on etymology. After all, the word “agency” literally refers to acting as an agent on behalf of clients, said Abhay Singhal, CEO and co-founder of InMobi.
“I actually think agencies are in a phenomenal place,” Singhal said, “as long as they’re able to reimagine what they do.”
Agents of change
One way is for media planners to start thinking of themselves as forward deployed engineers, which has become a hot title in the AI world. Forward deployed engineers are embedded inside a client’s organization to help build, operationalize and customize AI within live systems.
If he were running an agency today, Singhal said, he’d start by calling every media planner a “forward deployed engineer.”
But new labels aren’t enough. O’Kelley pointed out that real forward deployed engineers are software architects with deep expertise building AI systems.
“You can’t just go to a media planner and say, ‘Go build database integrations with a bunch of internal systems, and also think about security and scale and everything else,’” O’Kelley said.
Agencies don’t have the budget to land that sort of talent, and even the big holdcos aren’t really trying to. Instead, they’re mainly outsourcing engineering to consultancies in India, he said. Not to mention that deep-pocketed companies like Meta are more than willing to pay billions of dollars a year to attract and retain top AI talent.
“Can’t compete with that,” O’Kelley said.
The specialist’s advantage
So, what’s an agency to do? Specialize, verticalize, figure out a niche. The way forward is to go deep, not wide, he said.
Be the consultancy that’s damned good at pharma. Be the agency that crushes it in linear TV. Be the creative shop that’s particularly good at running AI loops. Whatever. Just pick a lane.
AI is “pretty damn smart about almost everything,” O’Kelley said. “It’s better to be the best at one little thing with agents that help you do it really well than to be a generalist.”
