Name: Brainstorm Tech 2024: When Advertising Gets Creative
Uploaded: 2024-07-17
Duration: 12 min 28 s
Description: Philippe Krakowsky, Chief Executive Officer, Interpublic Group Interviewer: Joe Marchese, Founding Partner, Human Ventures, Casa Komos Brands Group; Co-chair, Brainstorm Tech

Philippe Krakowsky, Chief Executive Officer, Interpublic Group Interviewer: Joe Marchese, Founding Partner, Human Ventures, Casa Komos Brands Group; Co-chair, Brainstorm Tech

Brainstorm Tech 2024: When Advertising Gets Creative

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So as you listen to everyone talk about A I throughout this conference and we are can L in recently and in the, in the news. Do you find it amusing or adorable? Because in advertising, you've been working with A I for the past two decades. Um You know, I think that if you use the word advertising, if you use the word marketing services, you're talking about, you're covering so much territory with such a finite vocabulary that, you know, we run a very large portfolio companies in the more precision tech accountability parts of our business. So if you put $35 billion of other people's money into, um you know, the media ecosystem, Joe used to sell us some of that time when he was running ad sales at Fox, we've been using A I, you know, whether it's machine learning, whether it's the kind of work we do around um all sorts of predictive analytics and segmentation work for at least a decade. We made a huge investment in a data asset when we bought axiom. I think where it's, you know, where everybody's focus now is kind of what does gen A I do to the content and creativity side of the business. So I think we'll break this into two sides. All right, one is going to be how is it changing the workflow and IPG 58,000 employees around the world. Is that right? So we're good. Yep. So we're gonna talk about how it's changing the workflow for people in the creative world. We saw runway earlier today and then we're gonna talk a little bit about the business of advertising, which is buying and selling attention and, and how that's gonna change with A I. So let's let's start with the workflow. How is it changing? What's happening inside the agencies and the work they do for clients? Well, I mean, it's interesting because a couple of the prior speakers talked about it, I think um tools to move faster down the track of personalization at scale and just the demand that exists for content, given what, you know, you all know better than most because you've been, you know, funding the technology that's brought platforms to the fore. Um You know, we're clearly relying on our folks to spend a lot of time becoming expert in the tools that get us down the tracks of, like I said, personalization scale. Another thing that I think is happening is, and I think it applies to lots of businesses is it's probably going to winnow out a measure of maybe the middle of, you know, many large companies workforces And so the question is, how do you use them as ideation tools? How do you in essence, get better hypotheses faster and put a lot of sort of sail to wind so that the folks who do have that expertise can get to good ideas and start going deep on good ideas faster. Is there a mandate or programs or, I mean, something, how do you disseminate the tools so that you get past the resistance of using them in a company as large as yours? And how do you get, like, how do you, how do you get adoption of something like what you're talking about? Well, I mean, in the same way that you get people to show up back in the office, post the pandemic, a certain wait, that's happened a week. Yeah, we're about three days across. It depends where outside of the US. People are back mostly five days a week. So there clearly do need to be sort of non, non optional, whether you're going to call them mandates or other non negotiables according to the. And so you're clearly expecting of folks that they are going to be going deep and putting all the technology to use in their day to day. And that's actually the KP I, that's a lot of, a lot of our operators are measuring against that. They're making it clear to people, they're going to be comped against that. Um And then the last piece that I think is sort of interesting back to your first question is just the ways in which the tools are kind of making a larger total addressable market for us because you're, you're able to democratize creativity and reach much further on behalf of your clients into their own ecosystem. So let's talk about that part because that's the part that fascinates me. We all saw the runway. Sure example earlier, if we're going to democratize creativity, we're going to give more people creative tools, Instagram did that. And this is why I say A I has been part of our world for a long time. Google search results is an algorithm. Tik Tok is an algorithm youtube recommended videos is an algorithm. It's been deciding what people look at in a world of infinite content, but it sounds like the amount of content that's about to be created is going to expand even further. So even if you can make the creative thing, how do you reach at scale for clients? Well, again, you start thinking about like in concentric circles about who is in their world. So a couple of very quick examples just you know work we've done in the last year off of the top of my head to just try to maybe, you know, dimensionalized that or bring it to life for folks. We have a very, very large practice area in health care. So there are 1000 people who work in our world who are doctors, nurses phds in molecular biology, etc, all of whom work in our dedicated health care vertical. So for a very large client that was bringing an Alzheimer's drug to market, we built a large language model that became and we did this in conjunction with a couple of large uh universities that became a way for families and caregivers going through this to in essence, help give the patient a way to write their own biography. Um for another very large client that has uh a whole secondary set of. Um it's a, I'm, you know, I'm from Mexico, the world's largest baked goods company is baked based out of Mexico. And so we've actually created platforms for the folks who are small businesses that work with, you know, that buy from them to generate very, very high level graphics and design to brand their mom and pop. 12 person or two location um food stalls in Mexico City. And then we populated an entire app and a whole ecosystem so that any tourist arriving in Mexico had just as much opportunity to see and be directed to or, or, or kind of have an appeal that is just the same that, you know, thinking about another start up that you had some time ago. You know, we all know what the great places to go in Mexico City are to eat, but there are just as many that you would have never otherwise heard about. And So we're finding interesting ways to push out. But these sound like so these, these sound like great products and they are um and they sound consultative to the client which most people don't think about advertising. People think about advertising is buying the, the Super Bowl commercial or buying, you know, the, the World Series. Um you know, there's been a big push accenture and uh the the consultancies coming into the world of advertising. We heard sales force earlier talking about personal is a, I gonna collapse. Who competes with who or do you think that the agency plays a bigger role? I mean, look, I, I think that it's been sort of happening anyway, right, in a sense, although, as I said, when, you know, we were dealing with it in the media side, um you know, the scale to operationalize, you know, all of that money flowing into the economy is pretty significant. So I guess what I'd say is it, you know, we're raising the floor and I think that's a given. Um I think that certain things that like folks in our space bring as opposed to, you know, what you would run into with a scale systems integrator or what you would run into. I think that um objectivity judgment. So the folks who sit on top of these things, their deep professional expertise, I mean, I think I talk a lot about the journey that we're on is one we're a professional services company and it's can we become a tech enabled professional services company? So I would sort of go the gating items that say no, not so much. Are, can you bring judgment and can you then you know the opposite of the, the we're raising the floor is a big risk to all of this is reversion to mean if everybody has all those tools at what point can you really start doing things that use them to, to innovate and to break through? Because if not everybody here is mccann Erickson, right? Which I'm not sure I'd wish that on anybody. So, but then, but then the question is, and I constantly come back to this, which is people don't think they're in the advertising business, but everybody's in the advertising business, you're in the advertising business personally, you're in it for your company, for your firm, but it's gotten harder and harder to get people's attention. That was the entry there. Kirsten had some great slides on how much is going, coming at people. You're in the business of getting attention for your clients. So you have the products you're building better. But the part of buying media put it this way. IP G is the business model, right? For sports, for cable television, for sponsorships, like what happens to that world of, of the paid media as it kind of condenses on the media owner side, where do the dollars go if it becomes so fragmented that everybody can make a movie like we saw on runway. Like what do you see happening? Well, I mean, it's, it's, I mean, I think I agree with you 24 hours in the day, people aren't going to basically just be consuming. But I think you, you triage and you realize that the level of, you know, the production values required or the capacity to generate the kind of mass content that is personalization of scale is at a certain level. And what you're trying to accomplish with that content and how you're going to define success or what you're going to. Now, what's interesting, you know, I would think for folks who are, you know, looking for opportunity or business models is that our, our industry has not done historically, a particularly good job of reaching the middle market and yet the platforms have been, you know, built off of small and mid size businesses. So there's probably an opportunity or a gap for companies that get specialized and can use those tools and then can solve that in a certain, you know, for very specific, you know, specialized use cases. I think as you move up stream, you get, you know, you get some of the examples I gave to you, which are how do we use this to bring more people into the conversation? And then as a tool for really high end creative people, I don't think that you're going to be able to none. You know, the rest of us aren't making movies like Scorsese no matter how many tools we've got. Well, I think that there'll be some people challenging that I know there will. But I'm, I'll, I'll take that bet for a while yet. The question I'd ask because we're wrapping up on time here. I've said it. You say I'm wrong that businesses that wholly rely on the platforms as their means of distribution. We had the D to C revolution for a period of time that their margins will eventually go to zero because the platforms in order to grow have to eat the margin of the things that are. There is a lot of argument that advertising has become reliant on the big platforms in one minute. What happens with the consolidation? How, how is your relationship between the agencies and the platforms right now? Well, what we've done is different than our peers is our peers by volume and act as principle. And so you do get the concern that over time as consolidation happens, we've gone in a direction that's more about can you be consultative? But also how do you build a layer? It can be a relatively thin layer of engineering and tech so that you can ultimately be more staff like and or license the tools so that your clients can in essence, kind of, you know, level the playing field and not be entirely at the mercy of a couple of key players in that space. Ok. All right. Well, we have to wrap up there. I know we do this a lot more, but thank you very much and we could do this for meaningfully longer. Thank you.