• by Joe Mandese  @mp_joemandese, June 9, 2023

With half of all media already AI-enabled to some degree, media currently is the primary use of AI on Madison Avenue, according to a research analysis presented recently to the board of directors of the American Association of Advertising Agencies (4A's) by the equity research analysts at New Street Research.

"Most were interested in Part III, which was focused on potential impact to the agencies specifically," New Street analyst Dan Salmon said in response to a MediaPost query about the presentation, which focused on three areas relevant to the ad business: the brief history of AI in advertising; the acceleration of generative AI tools at the major ad platforms; and specifically how agencies will use generative AI to help create creative assets, plan and buy media, and assist clients with their data analysis.

"With these opportunities come risks in how the market and revenue model for agency services could change and uncertainty about intellectual property and data use," New Street's research cautioned.

Citing GroupM estimates that half of all media already is AI-enabled to some degree, and that it will ultimately grow to 90% of all advertising within the next few years, the New Street analysis concludes that will lead to media becoming "more and more digital," and that "Legacy buying via media negotiations and locked in inventory rates will remain for a variety of advertising channels (linear TV, sponsorships, static Outdoor, terrestrial radio) but will continue to reduce in significance."