Agencies are being rocked by the rise of AI.
The solution? Bring on more humans. No, seriously.
On Tuesday, digital agency Incubeta announced its acquisition of RocketSource, a consultancy that helps advertisers understand what drives customer behavior using data science and predictive analytics.
The price of the deal was not disclosed.
The traditional agency business model is falling apart, according to Alex Langshur, CEO of Incubeta in the Americas, because its cost structure is being “obliterated” by AI.
But agencies are just “the canary in the coal mine for corporate America,” Langshur told AdExchanger.
And so to shore itself up for the future, Incubeta is seeking out the “gems,” as Langshur put it, meaning companies that have already “solved for the transformation” by creating clear guidelines and guardrails for the use of AI and hiring the necessary human talent to prompt the machines most effectively.
Diamond in the rough
One of those gems is RocketSource.
The consultancy, whose main offerings include data as a service (a model where data from a variety of sources is available to consumers on demand), growth consulting and digital experiences, was founded in 2016 with the goal of answering one question: Why do customers stick with a brand? It still offers these services, but the difference now is that it uses AI to do the same tasks more efficiently.
RocketSource helps brands define their business goals and model, including how best to reach its audiences, which channels are most effective and where the market opportunities are.
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While making a purchase decision, consumers shift from “an emotional response to a logical reasoning and back to emotional response,” Jonathan Greene, co-founder and CEO of RocketSource, told AdExchanger.
Through AI, RocketSource has been able to “agentify” and speed up the transformation process to find the link between emotion and logic, he said. (Is “agentify” a real word? Not yet, but it gets the point across.)
RocketSource’s shift to AI involved converting its preexisting “core frameworks and methodologies” for training humans into documentation that could also train models, including teaching humans how to effectively prompt the machines, Greene said.
Ultimately, this developed into what RocketSource calls an AI automation and sequencing framework, which structures client data in ways that an AI can digest and, using predictive intelligence, automates recommendations for a brand’s strategy.
AI tools, assemble!
RocketSource will be fully integrated into Incubeta’s business, and they’ll work together to win and support clients, Langshur said.
In the past, human analysts had to manually assemble and transform data into something that could be analyzed for trends and outliers – a “very not sexy” process, he said.
But with RocketSource’s frameworks, said Langshur, “you can assemble very large sets of data, and you can simply start to query it with open-ended prompts” to determine what elements of the data set stand out.
Prior to the acquisition, Incubeta already had its own tech and creative layers, but now the agency will be able to integrate AI into the “back office,” he said.
Takes two to tango
Although RocketSource is a small firm with under 50 employees, Langshur said, its capabilities and revenue are equivalent to companies four or five times its size.
“They’re actually internally using all the systems that we’re going to be using,” he said, which is part of what gave Incubeta confidence in the quality of the product.
For RocketSource, the benefit of the acquisition comes from the scale that an entity as large as Incubeta provides, with its over 800 employees and 18 offices.
As a small company operating independently, said Greene, RocketSource “can only open so many doors at one time.”
To reach more customers, Greene said, “we need[ed] to find a new home.”
