This is post #5 in our series around our 2024 New Year Outlook Report, and we’re talking ad agency plans to leverage AI for business development growth.

In a new question for our report, we asked agencies,

“Are you planning on adjusting your overall business strategy to incorporate some form of AI in 2024?”

And further, in our 2023 Agency New Business Report in September of ‘23, we included 2 questions around AI.

The data from those responses provide interesting context:

1. 38% of agencies reported using AI tools for new business development.
2. 70% of agencies reported using AI tools for client work.

And in answer to our latest survey question above, 77% of agencies said they were planning to incorporate AI into their business strategy in ‘24.

You’re probably tired of hearing about it.

AI and all it can or will do is ubiquitous.

In 2024 the question is, how can AI actually help my business?

We were pleasantly surprised to see 70% of agencies using AI tools for their clients back in September of
2023, and unsurprised that 77% of agencies plan to incorporate it into their business strategy in 2024.

It should probably be 100%, but what does it mean for agencies in 2024?

Ad Agency Plans To Leverage AI for Business Development

First, we strongly recommend you read 2 posts, 3 Ways to Improve Your Business Development Efforts-An Example & A Challenge and a post by our VP of Marketing Communications & List
Operations, Miguel Trejo, (The New Business Dragon-AI and Business Development).

Both posts dive into AI and how agencies can harness it and emphasize that rather than be nervous about AI and its impact, you really have no choice but to explore how to harness it to make your processes more efficient.

Keeping with the proactive theme throughout this report, you can’t wait on the sidelines when it comes to AI.

For example, at RSW/US, we’re currently testing multiple AI platforms to make our business development processes more effective.

It’s still relatively early days, but understanding the building blocks, like the effective use of prompts, is critical.

Another way you can help your clients (and prospects), from an Ad Age piece Phony AI Ad Tech—How Brands Can Avoid Misleading Marketing Products:

Brands are being flooded with offers from vendors with AI-based products that promise to improve marketing and work efficiencies.

Brands, across the board, will need help on the AI front, beyond what any internal teams might offer. And that help will come from agencies, of all types, but you must bring expertise and leadership to the table.

Again, from the Ad Age piece:

As many as three out of four marketing products billed as AI really aren’t . . .and marketing executives often can’t tell the good from the bad. “Executives are struggling”

Bottom Line

You don’t have to become the AI expert at this point, it’s effectively still the wild west, but you can show your prospects you’re staying informed, and that you’re keeping your clients informed.

Staying on top of trends like AI is critical, but certainly, it can tip the other way and get into “chasing shiny object” territory.

Clients look to your firm to be more than order takers, and this is one way to do that.

And finally, some good advice from this Axios piece: AI’s hot new job now belongs to everyone

Chief AI officer” is one of the hottest new job titles, but some experts say AI strategy should be everyone’s job.

Small and mid-sized firms typically will not have the bandwidth to hire a Chief AI Officer, and it doesn’t make fiscal sense at this stage of the AI game anyway to make a hire like that.

Further to my point:

Some C-suite teams have found it difficult or impossible to source a CAIO with all the skills they need, while others tells Axios that hiring a CAIO is simply the wrong approach.

The piece goes on to list alternatives, and one that makes good sense, is establishing an AI project team within the agency.

The technology is moving rapidly, and establishing a team like this, to divide and explore the possibilities, and stay on top of AI’s evolution, will not only be good for the firm, but also your client relationships.

Put together a quarterly brief, for example, of your team’s findings and send, or even better, briefly present, to your clients.

Another way to show the proactive nature of your relationship.

This is post #4 in our series around our 2024 New Year Outlook Report, and we’re exploring the reasons why marketers decide to review new agencies.

We see some changes here from last year’s report, and an initially surprising one. We’ll begin by breaking down the top 5, in order of 2023 data:

Lack of agency proactivity

The notable increase in concerns about agency proactivity should give agencies pause.

There were many factors out of any business’s control in 2023, but proactivity was not one of them.

Marketers are increasingly looking for agencies that more proactively respond and provide strategic advice
or thinking.

Along these lines, while only a slight increase in unhappiness with strategy and thinking, that’s still 40% of marketers reporting dissatisfaction and suggests a growing emphasis on strategic partnership rather than just execution.

The 4-point rise in agencies wanting ideas from the client as a reason to review agencies continues down this same path.

Bottom Line:

What we’re hearing from marketers is more dissatisfaction with those parts of the business under the agency’s control.

In 2024, this must be corrected on the agency side. Marketers will decide to review new agencies when they perceive a failure to innovate or provide fresh perspectives.

Which is why, as difficult as it can sometimes be (depending on the client) consistent, clear communication and a solid understanding of the client’s business are key.

This is post #2 in our series around our 2024 New Year Outlook Report, and we’re talking how marketers discover new ad agencies.

This is a question we asked marketers in our survey, and for initial comparison purposes, here are the top 4 ways marketers found new agencies in 2022 and 2023, in order:
2022:                                                                                2023:
1) Networking 73%                                                        1) Past agency relationships 55%
2) Past agency relationships 67%                               2) Direct agency outreach 50%
3) Friends/co-workers 60%                                         3) Networking 40%
4) Direct agency outreach 44%                                    4) Friends/co-workers 35%

To provide a backdrop for this comparison, from our 2023 Agency New Business Survey:

Only 44% of ad agencies said they are satisfied with their new business program. In ‘22 it was 49%, and in ‘21 it was 52%.

Let’s look at a breakdown of the top 4 ways marketers found new agencies in 2023, and what it means for business development in 2024:

Past Agency Relationships

They remain a strong factor but have seen a sizeable decline.

This suggests that while past relationships are important, marketers are a) increasingly open to new connections, or b) (and most likely) agencies are not doing the work to stick with and pursue past clients, especially as they move to new companies.
This is one of several strategies we employ at RSW/US.

While we have a team dedicated to building lists of new companies/contacts, we also mine past relationships (where appropriate). It’s continually surprising how often agencies don’t incorporate this into their business development strategy.

Direct Agency Outreach

An increase in effectiveness, indicating a growing openness to direct communication from agencies. Certainly, it’s as difficult as ever to break through to prospects.

And to be clear, your prospects typically don’t want to be sold to.

The inundation of ineffective sales emails, to give one example, is not helping those agencies that are reaching out with relevance.

The key to effective outreach is to show that prospect how you can help solve their business challenges. To be effective, agencies must alternate and make use of multiple avenues of outreach.

For example, at RSW, we use phone, email, social, and physical mail, coupled with our tech stack to make the process more efficient.

Networking

There’s a significant decrease in the use of networking to find new agencies.

Post-Covid, we’ve seen a return to more in person networking and events, but we saw conference attendance for marketers drop 14 points, from 29% to 15%.

While networking will always be important, agencies should take advantage of this trend and maintain ongoing outreach to fill the gap.

Friends & Coworkers

Another notable drop, implying that personal recommendations are becoming less influential compared to other methods, yet somewhat odd, as comparatively, this can be seen as an easier way to find new agencies.

But again, agencies should take advantage of this trend.