‘Agencies are behind clients’: David Jones on The Brandtech Group’s plan for generative AI

Conversations at this year’s festival back him up. The confusion has given way to education, as marketers start to understand what they don’t know about AI.

One key idea stands out: agencies and marketing services typically focus on driving down costs for clients because competing on performance is tricky — though not impossible. Generative AI flips the script, providing these businesses with a new competitive edge.

“I don’t think we’ve ever been so busy,” said Jones. 

A big part of this success is thanks to Pencil, The Brandtech Group’s generative AI platform it acquired a year ago. Since then, the platform, which predicts ad performance and generates creative content like videos and images, has been rolled out to some of the group’s largest clients. And it’s easy to see why. Pencil’s ads are produced 10 times faster, deliver twice the performance, and cost 30 to 50 percent less, according to the group.

Digiday caught up with Jones and Pencil’s co-founder and CEO Will Hanschell in Cannes to hear more about their plans for the future. 

This conversation has been edited lightly for clarity. 

First up, what does Pencil do? 

Jones: On the one side it aggregates all of the best and latest models, from ChatGPT to Gemini and then plugs that straight through to an advertiser’s account so that they can publish straight through to Instagram, TikTok and so on. In other words, because the technology is aggregating all the best models, we have the world’s largest tech companies working every day to make Pencil better. Markers can toggle between these models. Also, anyone can use it. The client can use it as can their agency. It’s a platform.

What’s the biggest change in how marketers think about AI now? 

Jones: CEOs didn’t care about social media whereas most of them care about AI. it has come at a speed and scale no technology ever has before.  And CEOs see that. There’s a PricewaterhouseCoopers study that says 61% of global CEOs said AI would impact their top line and bottom line growth in the next six to 12 months — not five or six years from now but a year at most. Clients are leaning in as a result of that. 

When they do lean in, are clients doing so from a position of influence in their company on all things AI?

Hanschell: It depends. Marketers are speaking to a lot of vendors in the space, which means they’re upskilling quickly. They’re building an understanding of what the technologies can do in order to differentiate between reality and hype.

Jones: A lot of our clients are doing the west coast road trip where they meet with Nvidia, Google, Microsoft and the rest. Unlike previous technological revolutions, where agencies were at the forefront, taking their clients with them, now with AI it seems to have reversed. I think agencies are behind clients today.  

If agencies are leaning in too as a result of that, does it make it harder for Brandtech Group to stand out?

Jones: The annoying thing is everyone is now talking about it. But the easy thing is that no one else has a product in the market they can use. That means that as soon as we get to serious conversations with clients they understand what we’re able to offer. That’s not just clients either — it’s the platforms too, from Adobe to Google. We have to make sure to keep that lead. It’s about finishing, not starting, first. 

Do you worry that AI will replace companies like The Brandtech Group?

Jones: When Sam Altman [CEO of OpenAI] said that generative AI will replace 95% of what agencies do, we agreed with it. It’s why we created the company. That said, I think it will create more jobs in the industry. Think about it: if you define advertising as simply people making TV commercials then you could say the ad industry hasn’t really changed in size. But if you define the advertising industry as all that plus the likes of Facebook, Instagram, TikTok, YouTube and more, then it’s 20 times bigger today, and has some of the most valuable companies in the world. Generative AI is going to add another layer on top of this. There isn’t a single point in history where humans have had an amazing tool where they haven’t done incredible things with it and hasn’t driven massive growth.

Is that why you’ve said in the past that generative AI will help anyone to be an ad agency?

Jones: 60 million people now make money as creators. The smartphone did that — it enabled anyone with one of those devices to be a creator if they wanted. But what was created wasn’t TV quality. It was low quality, low cost. With gen AI, that’s not going to be the case anymore. The average influencer will be able to create content that’s stunning — something we’re already starting to see. It moves the creator economy up a level. 

How does Pencil allow Brandtech Group to keep ahead of that shift?

Hanschell: CEOs have seem tech changes come and go that always provide value to the companies behind them, from social media to the mobile phone. With AI there’s a chance for them to have some equity in the technology. They’re thinking about whether they can own the technology, put their data into it so that it can create a competitive advantage for the business. There’s an ownership piece to these conversations that CEOs are really interested in. Now, they can ask ‘what can we build for ourselves to give us a competitive advantage to do something exciting here’. We can help them do that because our technology is agnostic. 

Agnostic?

Hanschell: Clients are worried that they invest in one AI model and a new one comes out. Then they need to start again somewhere else. With Pencil they have access to all the current and future models. It mitigates that wariness of spending money with vendors and then that investment becoming obsolete.

Jones: Because of the headstart Pencil has had on the market there’s a billion dollars of media spend being put through it that allows predictions to be made. It can tell you that the ad is performing in the top 25% of everything that historically has worked, the bottom 25% and then also flag when it doesn’t know so it may be worth trying. 

Is that coming through in the pitches out there? 

Hanschell: There’s RFPs and pitches specifically for generative AI which didn’t happen last year. Big brands are saying ‘we want a generative AI to fine tune our own models and we need a partner to help’. They’re looking for an easy partner that can help them with what they actually do every day. This can be a challenge because the companies in the space aren’t necessarily built to do that — they make GPUs or they’re focused on model generation. We come in at a high level, because we make ads.