The meteoric rise of artificial intelligence may have already reshaped the entire marketing industry, but the real battles have only just begun over who is best placed to use the technology – client marketers or their agencies – and who is best placed to pick up the pieces when the going gets tough.
That is according to a new study by SBS, which reveals that, while nearly three quarters (71%) of UK brand marketers say AI is adding complexity, and two-thirds (66%) expect to bring more capabilities in-house, there is still a crucial role for marketing and advertising agencies.
The report, “Adapt to Thrive: The Complexity Paradox”, explores how agencies and brands are navigating today’s crowded ecosystem. The research was conducted in partnership with consultancy Censuswide and quizzed 200 UK marketing professionals, evenly split between independent agency and in-house brand professionals.
The data reveals a growing tension around AI adoption within the industry. While the technology is removing friction from individual tasks and improving efficiency, the growing number of tools, platforms and decisions is making the wider ecosystem harder to navigate.
In fact, 19% of brand marketers say AI is making marketing more difficult to navigate, with 57% saying that accessing and adopting new marketing technology is now more challenging than it was 12 months ago.
Budget constraints (18%) were cited as the biggest barrier for brand marketers in accessing and adopting new technologies, with limited internal expertise (14%) and lack of talent (14%) a close joint second, followed by a lack of resources (13%).
At the same time, the balance between agencies and in-house teams is shifting, with 66% of brand marketers expecting their organisations to bring more marketing capabilities in-house over the next three years.
The research highlights a strong alignment between brands and agencies on what matters most when choosing an agency partner, with transparency and collaboration featuring among the top attributes for both.
However, while agencies identified the use of AI as a key differentiator, brand marketers placed greater emphasis on innovation.
Together, these findings point to both a challenge and an opportunity for external agency partners – as brands bring more capabilities in-house, agencies will need to offer specialist expertise and strategic guidance that complements internal teams and helps them navigate an increasingly complex technology landscape.
Meanwhile, AI adoption (24%) emerged as one of the biggest areas of complexity for agency marketing professionals. This was second only to creative production (27%), followed by programmatic advertising (21%) and measurement (21%).
Yet AI will also be critical to agency growth – some 28% of agency respondents said AI capability will be the most important thing they need to thrive over the next three years. This is followed by greater transparency (25%), better client education (24%) and leadership that can set a business vision and strategy (21%).
What was clear among both in-house brand marketers (33%) and agency professionals (37%) was the belief that AI capability is set to be the biggest competitive advantage for the agency of the future. At the same time, 25% of in-house brand marketers and 24% of independent agency professionals said the agencies that succeed will be those that combine AI with human expertise.
SBS managing director Jason Warner said: “Access to technology is no longer the dividing line for senior marketing professionals. Instead, it is the application of it. As AI evolves, so does its complexity and marketers are at risk of not keeping up.
“There is also another consideration – marketers plan to bring more capabilities in-house in the next three years but we need to be more nuanced about what ‘in-house’ actually means.
“For some, it could mean bringing strategy in-house and working with partners on execution; for others, it’s about building capabilities across the entire process. And there is everything in between. This creates an opportunity for agencies to adapt to what clients actually need, rather than assuming the future means bringing everything inside.”
There is also the issue of what happens when the going gets tough.
Warner concluded: “Rather than competing with in-house teams for ownership of execution, they can become the partners that brands turn to when the decisions are harder to make – helping them navigate an increasingly complex ecosystem, determining where investment will deliver value, and understanding what they should own, automate or outsource.”
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