This week, I left the Agency world behind to join a company started by colleagues I highly respect in the Software as a Service industry. I’ll explain why, but first, I’d like to give some background on my career. You can skip this section, but it shines a light that may help you navigate your career.

• I enlisted as an electrician’s mate in the US Navy in 1986 and was honorably discharged in 1992, having done multiple deployments and served in Desert Shield and Desert Storm. Few people understand what it’s like to be in a floating ecosystem where everyone depends on one another to operate a ship. I learned the discipline of troubleshooting during my time there, and it has served me well.
• I worked for a newspaper as an industrial electrician when I was discharged. For you young folks, we didn’t have IT departments back then, so electricians and electronics technicians programmed ladder logic into PLCs, ran ethernet, and networked computers. I quickly caught the programming bug and started automating myself out of a job (literally). At the time, database marketing and the internet were in their infancy… and I knew I needed to leap despite having a great job.
• I moved to Denver, where I joined a premiere database marketing company that helped Newspapers analyze subscription retention and build omnichannel strategies that geographically and demographically layered newspapers, TMC, and direct mail campaigns over GIS data to target specific segments. We used some of the first ETL tools and built some of the first SaaS platforms (although they didn’t have that name then). Unfortunately, we also ran out of funding during the dot-com boom and bust.
• At the time, I was also flying my kids back and forth to the Midwest to spend time with their mother (I was a single father), so I decided to look for a job there. I landed at the local newspaper and launched their direct mail business. Despite our department winning awards for the fastest and most profitable initiative at the paper, we were met with quite a bit of flack from newspaper leadership. Thankfully, they grew weary of me calling them dinosaurs and showed me the door.
• As fate would have it, within days, I landed. I helped a friend implement email marketing (also in its infancy) at an NFL franchise. When the ESP found out what I did, I had the most incredible job interview ever… I was handed a pile of job descriptions and asked which one I wanted. I selected an integration consultant, and for the next couple of years, I traveled the globe helping clients integrate and automate their email marketing platforms to virtually every system under the sun.
• That company eventually sold for billions of dollars (and I got a laptop), and I moved on to help startups market, automate, and scale their businesses. I had such a string of successes that I started my consulting business. Shortly after launch, I traveled internationally with another colleague, and we helped perform technological due diligence investigations for an investment firm. They invested several billion dollars into the companies we advised… and I believe we saved them billions more by not investing in others.
• As that engagement ratcheted down, I grew my full-service agency. I spent the next 15 years helping hundreds of businesses, large and small. Owning an agency was always a bit of a rollercoaster with client turnover, collections, sales, and employees. I found myself in a position where I was doing less of what I loved and more and more business operations. When the pandemic hit, and the economy stalled, I partnered up and merged my agency with several other partners. I thought it would give me more opportunities to return to client work and less operations.

Sadly, that never happened. And I started to wonder why…

The Decline of Marketing Agencies

In the young days of my agency, I had a lot of mentors and counterparts who did quite well in the agency space. Over the next decade, though, I watched as most of them sold their agencies or moved on to partner on other initiatives. Many of them did quite well… but as time went by, I watched more and more go out of Business. There are plenty of reasons why but I think they break down to a few that have crippled agencies:

• Talent – A huge spike in the number of college students with marketing communication degrees flooded the market, dropping the average salaries. It meant that poor agencies could churn out expensive employees or that companies could bypass agencies altogether by hiring cheap talent. Two people in my family are graduates who can make more money in a retail job than behind the desk doing marketing.
• Offshoring – A huge spike in the number of offshore and outsourcing platforms companies could use to get cheap work and talent. While the work accomplished didn’t have the quality of our agency, it became more and more difficult to justify why our costs were so much higher than our competitors.
• Devaluation – More and more business owners hire an agency like they buy a carton of paper. They’ve been burned by the crappy agencies long enough that they don’t want to risk investing even more in your agency, no matter how great your reputation or results. I have little doubt that the constant barrage of spam and ads for cheaper solutions is devaluing our industry.
• Efficiency – As a great agency, we often worked ourselves out of a job. Once the site, marketing, and advertising efforts caught a solid footing, it was easy for the company to push us aside and take it over. We were never the type of agency to own the processes, so it was easier for them to let us go.

Running a good agency is exhausting. Sales, justification, negotiation, turnover, collections… it winds up slowly eating every minute and dollar until you don’t even realize what your job is anymore… or whether or not you can continue.

And now… enter AI.

AI Is Already Burying Agencies

Let’s do a rundown of some of my expenses as a marketer and how GenAI is replacing them:

• Content – ChatGPT is a product that costs $20 a month. That $20 a month (plus Grammarly) has wiped out the thousands of dollars I used to spend on copywriters. I can even upload an infographic and prompt it to write a comprehensive article that gets me 90% of what I need.
• Photos and Video – The AI and ML algorithms in my iPhone have made it so that I can take or touch up photos or video as great as my photographers or videographers used to provide… wiping out thousands of dollars in expenses. I can even get an AI headshot now. AI image creation will wipe the stock photo industry.
• Transcription and Translation – AI tools now provide me real-time transcription and translation for my international or multi-language clients, eliminating thousands of dollars.
• Code – I even utilize ChatGPT to develop significant portions of code or troubleshoot CSS issues. And it’s quite good at it.

Tools for search and ad optimization are also hitting the market. I believe multi-person agencies will be put out of business within a few years. What’s left will be excellent Marketing consultants and strategists who have an AI toolkit that will assist them in executing everything their clients need.

And… in a few years, your marketing consultant will also be an AI platform.

The AI Iceberg Is Right Ahead

People continue to buzz about GenAI tools like ChatGPT, but they only see the tip of the AI iceberg. While I’m spending $20 on a GenAI tool, the companies looking to market me are spending millions on AI. Not just on developing the algorithms but also on standing up the instances of their data to train the models that will help grow their business. These platforms are accelerating at a breathtaking pace, and it won’t be long until they swallow up entire economies.

I was heading for an iceberg.

Let’s return to my history. I left the Navy to become an electrician, left that position to become an analyst, then a database marketing consultant, then an integration consultant, then a digital marketing consultant, then a digital transformation consultant, and an agency owner. Looking right ahead, I see what’s there and fully recognize what’s below the water’s surface.

Companies will stream their data and migrate their systems to AI instances trained on their customers, processes, products, and services. The tip of the iceberg is a cute little subject line generator thrown into your email platform. The part of the iceberg below the surface is the monster you’re not seeing. It’s a semi-autonomous HITL platform that will help businesses execute every aspect of their business growth… from product development and corporate expansion to the personalized SMS offer that arrived on the morning of your payday for that product you had your eye on all week.

OpenINSIGHTS

Yesterday, I started my new journey as CMO of OpenINSIGHTS. Several companies pursued me, but none had the team, knowledge, capabilities, or vision that OpenINSIGHTS has. In full disclosure, I am the father of their data scientist, Bill Karr, and I’ve been having conversations with him about the advancements their company has been making over the last few years. Bill isn’t your average data scientist; he’s a Ph.D. in Math who has written several papers and is networked with some of the world’s most advanced researchers.

Bill and the team have had a series of breakthroughs in machine learning and predictive insights in the retail industry that have captured the attention of the world’s largest D2C retailers and the team at Google.

I believe what they’re creating is the future of retail marketing that I described above.

The founder, Angel Morales, and I had an incredible few years together working at that ESP I discussed earlier. Angel is an unstoppable force in the retail industry. Board members and investors, whom I respect and have worked with, also support them. It feels perfect… like the band is back together.

On a personal note, I’m also married now and look forward to putting all my focus on one company moving forward. I have an incredibly steep learning curve jumping into this company that is years ahead of its peers, but I’m up for the challenge. At 55 years old, I believe this is the last transition I need to make in my career, so I am beyond excited to help my friends, son, and industry advance.

We are the iceberg.

Notes: This doesn’t mean the end of Martech Zone. On the contrary, I’ll be publishing more on the advancements of AI in our industry. And Highbridge is still doing fantastic work on the integration and development side, scaling and automating enterprise companies.

©2023 DK New Media, LLC, All rights reserved.

Originally Published on Martech Zone: AI: Why I Walked Away From My Agency After 15 Years