‘Agencies as we know them will be dead’: Media leaders pull no punches at DMEXCO

Advertising conferences tend to be formulaic, safe and often brimming with platitudes.

But an impassioned debate broke out during a panel on the future of media at DMEXCO (Digital Marketing Expo and Conference) — one of Germany’s leading advertising summits — last week, underscoring the industry’s frustration and anxiety as technological disruption reshapes advertising.

Leaders from Universal McCann, RTL, Deutsche Telekom and Duolingo’s German agency OZMOZE didn’t hold back during a wide-ranging conversation on topics including: the future of agencies, the impact of AI and what some panelists called the industry’s “hypocrisy” around brand safety.

One of the most spirited topics? The survival of agencies.

“Agencies as we know them will be dead 10 years from now … the whole matrix and landscape will change, for, I believe, the better,” said Viktoria Renner, co-founder at OZMOZE, adding that she saw AI as a catalyst for greater efficiency.

“One person will be able to book the whole campaign … while you now [need] a big team, big agency,” said Renner, echoing comments made earlier this year by two of WPP’s ex-CEOs, Sir Martin Sorrell and Mark Read.

Renner also expressed hope for creatives.

“What will not die will be the creative impact that we can have on AI, [whether it’s] the media strategy or checking surroundings through AI,” she said. “Which surroundings do I, as a brand, want to be placed in? Which bubbles do I really want to target?”

However, Stefanie Tannrath, CEO at Universal McCann GmbH, wondered whether that hope is a mirage.

“It's easy to say creative will always be king and AI can never replace creativity,” she said. “But that's exactly what's happening already, and especially in the model of creative agencies. CDs [creative directors] are now AI supervisors. Those are the new job titles they have in creative agencies.”

How AI, ‘hypocrisy’ and regulation affect brand safety

Industry leaders diverged on whether AI will improve or worsen brand-safety standards, as some platforms wrestle with a surge in AI-generated content.

Tannrath cited concerns around the ease with which AI can create misleading or just plainly fake content.

“That context gets harder to control,” she said. “Yes, AI can help do screening [more] efficiently, but then it's a little bit of a Catch-22.”

Renner was more bullish: “As much as AI adds a layer of brand uncertainty, it adds that layer of safety eventually. What is the context you appear in? [This is] the first time in media history you are able to do that on socials as well, due to AI.”

But it’s not just AI that could be torpedoing advertisers’ brand safety efforts. Carsten Schwecke, chief commercial, technology and data officer at RTL Deutschland, pointed to “hypocrisy” in the industry’s attitude towards brand safety.

“As long it [happens] within the platform world — the Metas, the YouTubes, the Instas — but it generates cheap CPLs [cost per lead], it's okay,” Schwecke said. “As soon you have advertisements in classical media, in digital news sites, it's very critical and non-brand safe.”

Schwecke also highlighted the gulf in regulatory oversight between TV and platforms, especially in Germany.

“TV is highly regulated in terms of protecting the youth,” he said. “Within the platform world, there is nothing. We are in favor of smart regulation, but [want a] level playing field.”

Indeed, many news publishers are already facing a highly precarious future as advertisers skirt news, while traditional broadcasters are scrambling to remain relevant to try to avoid global streamers eating their lunch.

Schwecke fretted that in the future, RTL may be the "last remaining local player of relevance" on the living-room screen in Germany, alongside YouTube and Amazon.

Still, as much as media fragmentation has complicated media buying, a less diverse media landscape won’t bode well for advertising performance, according to Daniel Jäger, head of group media at Deutsche Telekom.

“We need variance to create impact,” said Jäger. “We have a lot of studies that show if a customer has seen an ad at several touch points, advertising impact is much higher than just having the same platform and having the same surrounding and context.”

“We need that pluralism and need to have the open web,” he added. “And we need to strengthen it, so we don’t just end up with one end of the value chain.”