How to Use Generative AI in Advertising for Better ROI

What percentage of ad agency jobs are likely to disappear as generative AI in advertising? Some analysts believe it will be up to 45% in the next few years. Agencies can reduce the negative impact of AI on the workforce by changing their structures now and by using tools such as AI Search Visibility from AdMall.

What parts of ad agencies are being most impacted by AI?

In a recent webinar hosted by Adobe, Madison and Wall’s Luke Stillman and Brian Wieser took on this topic. They based their predictions on company-​issued press releases and publicly filed information such as 10‑K reports.

Their top-​level estimate indicates that $147B of the $550B of ad spending in the U.S. is already being impacted by generative AI in advertising. They point to the creative process of ad campaigns as a logical starting point.

The Creative Process

Currently, the ad creative process can take 6–10 weeks to get from ideation to delivery. At today’s speed of commerce, that’s an eternity. A marketer can miss an entire trend in a 10-​week period.

Luke Stillman says that around $18B in creative services is already in the process of moving to AI. Agencies are compressing the creative timeframe from weeks to days. And those that shift to this new process have an enormous cost benefit.

This opinion is shared by Sir Martin Sorrell who built WPP into an ad agency superpower.  In his Forbes interview, Sorrel laid out a five-​step plan for agencies to transition in the age of AI. Specifically, the creative process, which encompasses copywriting and content production can be streamlined.

Successful agencies won’t stop there. They will change their traditional pricing model, the one that has long been based on billable hours. In the AI era, clients will want to do business with agencies that bill via “output-​based pricing.” Clients will pay a fixed price for campaign development.

How agencies can shine in the GEO market

In the U.S. marketers spend $118B on search advertising. Madison and Wall estimate that 5% of search budgets, $6B, currently goes to SEO. As AI discovery shifts, some of this spending will migrate into GEO services.

Until the recent past, search efforts were all about optimizing keywords and content to match what online users were looking for. When marketers and agencies got it right, they appeared at the top of the search engine results page.

Now marketers must contend with understanding how AI systems decide what to show in the search results. Your accounts know they need to appear in the AI-​answer box on the search page.

How to help your accounts win in the GEO market

You can shift your expertise to help accounts with the process. They need competitive intelligence, and they need signal optimization.

The shift means a radical change to the kind of content that is being posted online. Data feeds, metadata, structured content, and long-​form content must be adjusted.

Tools such as AdMall’s AI Search Visibility can help. With the AI-​simulated search, you can see how your accounts are likely to show up when likely questions about the business are entered online. The tool shows answers for both ChatGPT and Google Gemini.

The tool then recommends next steps your accounts can take to improve their online content with the goal of appearing in the AI Overviews search section.

Beyond that, you must help your accounts build the content that AI agents see. Often this is the content that searchers don’t see. But the detail matters for ranking.

Madison and Wall estimates that the shift to AI spending in advertising will be dominated by changes to search and social media in the next few years. They expect $57B will be spent on agentic AI in 2026 in the advertising industry. Around $34B to social media and $17B to search. The “AI-​powered spending” will encompass services such as audience targeting, bidding and placement.

Other ways to future-​proof the ad agency

Agencies are already promising and delivering faster content creation and delivery processes. In doing so, they worry they’ll need to reduce headcount. Sorrel offers a strategy that could make a difference — it’s all about offering new services.

Agencies can put the power of AI to use by running multiple iterations of a creative campaign to test against smaller audience groups. In this way, they increase the level of personalization and improve targeting. Those iterations may have been cost-​prohibitive before AI tools came along.

If you’re running a traditional agency, you may be following old-​school models. Back in the day, agencies restricted proprietary or client information to the most senior levels of the organization. This strategy protected against data leaks. It also allowed junior employees to focus on the siloed parts of their jobs. Sorrell is in favor of business models that “stop controlling information and start building systems that make everyone smarter.”

Conclusion

We’re all being swept up in the generative AI for advertising revolution. As with other business process revolutions, people feared for their jobs. The best way to prevent job loss is to become better at using AI tools than your competitors.

Image by Google DeepMind.