What you need to know:

• Surging content demand – partially as a result of retailer media – is pushing production firms deeper into automation.
• WPP-owned Hogarth now using AI to predict which ads will work based on past performance.
• Next step is getting AI to make the ads. Hogarth experimenting with ChatGPT and DALL.E “to see how we generate ads without humans,” per CEO Justin Ricketts, “and that is only months away.”

Machine earning

Hogarth handles content production for Woolworths, picking up the business in April 2022. Since then, “we’re definitely seeing increased demand inside Woolworths but also through FMCG clients within GroupM,” as a result of retailer media’s rise, said CEO Justin Ricketts.

Content requirements are increasing exponentially to cover “sofa to shelf”, per Ricketts. “It’s a case of inspiring people as they are sitting on their couch, dragging them through the funnel with more consideration-type content and then converting them in-store or on the digital shelf.”

The problem is that retailer media creates further fragmentation. “So we have to create bucketloads more content for multiple platforms and environments,” said Ricketts. The solution, he believes, has to be automation and AI.

“If FMCGs want to unlock the power of retail channels, they have to make the content relevant to the audiences they can identify, but also the different stages of the purchase funnel, across multiple retailers. That creates quite a complex matrix of different content outputs – you go from one version to a hundred. If you then add in time of day, weather, whatever, it becomes more complex,” said Ricketts. “You go from one version to thousands – and the budgets are obviously not going to increase to that kind of quantum.”

Hence content creation and production requires a “modular mindset and framework,” and then AI and automation to do the legwork, per Ricketts.

“That approach means you can create a template for omnichannel content – TV, digital out of home, online video and social outputs – that can convert to multichannel outputs at the click of a button. So a 1,000 versions doesn’t cost 1,000x, it’s a fraction of that,” he added.

“Retailer media is starting to be a significant driver of automation and AI within digital production. To unlock the potential of those channels, it forces you to use them.”

AI creatives

Hogarth is using AI for meta tagging, meaning it can find assets very quickly for campaigns, and also to “crop, resize, render and version” content automatically for different formats and channels. Ricketts said Hogarth is also using AI to drive performance, “to look at which components of an ad are driving performance and then we optimise assets based on those aspects”.

The next step is predictive AI, “predicting what ads will work and the performance they will deliver based on past learning,” said Ricketts. “That is live globally and will be live in Australia within weeks.”

Generative AI – the technology ChatGTP is based on – is where Ricketts sees major disruption. He says Hogarth is already connecting those tools.

“What we are trying to do is plug these tools into a client digital asset management system so that it can see all of their assets in marketing and media, and how they are performing. Then, using the power of ChatGPT and DALL.E, see how we generate ads without humans – and that is only months away.”

Ricketts said WPP staff shouldn’t panic: “It’s not about replacing humans, but getting machines to do the grunt work. If the machine is doing 60 per cent of the work we can move faster.”

He’s alive to the risks, as Google discovered when its February Bard AI launch resulted in a $100bn share price crash.

“The problem with pointing these things at the internet is that the internet lies. So there is work to be done. But some very smart people and a shedload of capital are working on it,” said Ricketts.

“Agencies should be leaning in, experimenting and upskilling how our humans operate. It is about supercharging people, not replacing them – and there is a skill in operating these generative AI tools. The hottest new programming language is English,” he added, quoting former Tesla head of AI, Andrej Karpathy. “We now have to think and brief these platforms.”

A version of this article appeared in Mi3's Retailer Media Next report. Download your copy below.