When the dust settles on President Trump’s latest round of tariffs, growth is going to be slower, inflation more stubborn, and interest rates still higher than many people thought.
And that means one thing: the need for efficiency and for technological transformation — particularly in a slower-growth region like Europe — will be more important than ever. As a result, AI implementation is set to only get faster.
Nowhere is that the case more so than in marketing, where AI has begun to upend the way brands create their advertising and is set to transform how consumers find products to buy.
Two years ago we identified five areas where AI would impact the advertising business: visualisation and copywriting; hyperpersonalisation at scale; media planning and buying; general efficiency; and the democratisation of knowledge.
We are seeing those in full swing, and we have already moved forward from generative content creation — where AI responds to the instructions it is given — to agentic content, created by AI with minimal human involvement. Our Puma commercial in March this year led the way, training a team of AI agents to create the advertising from beginning to end, designing preliminary concepts, writing scripts, generating high quality video and pulling it all together in a finished commercial. We’re doing the same for GM, General Mills and Google Pixel. What this means for clients is that instead of spending £2.5 million and four months to make a commercial, you can do it for £500,000 in a couple of weeks.
So it’s no surprise that companies who are facing a world of uncertainty, slow growth and the impact of tariffs are looking seriously at reducing their costs by using AI at scale.
“If you’re a brand or a retailer there willl be a whole set of different challenges
One thing this does mean is that the way agencies are remunerated has to change: we have to switch from charging for time, which is hugely compressed by AI, to charging for results, what matters to the marketer. We’re just at the beginning of that.
The technology itself is moving at lightspeed: companies like Runway, Luma and Minimax that have emerged in this space are raising billions of dollars through initial public offerings and fundraising.
And the quality of what the technology can deliver is also improving rapidly. You can see a dramatic difference between content created just two or three months ago and what we’re doing today.
With all the large language models (LLMs) one thing is clear: the more data you feed in, the better results you get. There will be hallucinations, and at the same time AI does pose an existential threat, as we face the prospect of machines becoming more powerful than humans. But none of this will stop the onward march of AI and the demand for more efficiency will only drive it forward.
The other side of the marketing coin is consumer behaviour and how quickly shoppers will adopt AI to help them make purchases, specifically if and when they will switch from search to using an AI agent. So the current websitebased marketing system for consumer products may be revolutionised by that.
It poses a dilemma for Google since it introduced Gemini 2.0 late last year. It has enormous revenues from search-based advertising, and it’s not clear what the revenue model would be from an agentic approach to finding and buying products. For now, Google says that agents have increased the demand for search, and I think that’s true, but at some point people will switch to directly using the agent instead of search.
If you’re a brand, or a retailer, there will be a whole set of opportunities and challenges. An LLM can understand the context and detail of what a consumer is looking for better than search.
Marketers will need to disseminate better information more widely to ensure that their product gets the consideration it deserves.
Trump’s imposition of 100 per cent tariffs on chip imports to the US — subject to some big carve-outs — is unlikely to slow the march of AI, and if anything will make both the US and China go even faster. He wants production to be switched to the US, but what we are seeing is the emergence of two systems, one for the West and one for China.
Finally, if you need evidence of the power of AI to boost efficiency and cut costs, look at the recent pronouncement of data analytics firm and AI powerhouse Palantir, which has just recorded its first $1 billion quarter, and whose chief executive, Alex Karp, has promised to boost revenue tenfold at the same time as shrinking his workforce by more than 10 per cent, from 4,100 to 3,500. He sees Palantir as the bridge that allows businesses to realise the benefits from LLMs. On the face of it, the ambition is incredible — but there’s a lot of people who believe they can do it.
Sir Martin Sorrell is founder and executive chairman of the digital advertising and marketing services business S4 Capital
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