Leading Chinese marketing agency group BlueFocus surprised the market on Thursday, announcing it will “fully and indefinitely” end the outsourcing of creative design, copywriting, planning and programming, and interim employment. The news was shared via internal emails, as shown in an email screenshot shared by Chinese media, stating this was part of a management decision to embrace artificial intelligence generated content (AIGC).
BlueFocus decided to replace outsourcing human copywriters and designers two days after it was granted Microsoft's Azure OpenAI service license on 11 April, raising concerns about AI unemployment and job cuts in the creative and marcomms industry. The news not only shocked investors but became a 'hot topic' on Chinese Weibo.
On Thursday, the share price of BlueFocus, listed in Shenzhen, surged 9.77%, rising as much as 18% during the day, though gains were largely given up by Friday morning. As a ChatGPT concept stock, the share price of BlueFocus has increased by 80% since early February.
In February, BlueFocus Media officially announced it has partnered with Baidu ERNIE Bot (百度文心一言) to build a full-scale artificial intelligence marketing service system.
In March, BlueFocus confirmed its strategic cooperation with Microsoft as it has become the official agency of Microsoft Advertising to cooperate on OpenAI-based technology products. BlueFocus Media will set up an 'AIGC Centre' in its international metaverse team. To underline its commitments, the agency has embraced a new slogan to help customers “Think with AI, Win with AI”.
The company, which has been heavily involved in mergers and acquisitions activity, is also facing financial pressures. Founded in 1996, BlueFocus embarked on a rapid international expansion path in 2013-14, acquiring global agency brands, such as We Are Social, Cossette, Metta and FuseProject. It later sold a majority stake in several of these key international assets to a pair of investment firms in 2021. Earlier this year, BlueFocus was expected to post RMB 1.8-2.2 billion ($263 million-$321 million) in losses during the 2022 financial year.
It still unclear whether the company is replacing human creative and copywriters as a cost-control measure or as a strategic commitment to the technology. Campaign has reached out to BlueFocus for comment but had not yet heard back by the time of publication.
Greg Paull, co-founder and principal at R3 notes that both motivations can work in an agency's favour. "The use of AI within agencies currently serves two purposes," he says. "One, it helps agencies do work at speed and reduces cost, which allows them to be competitive in pricing. Second, announcing AI as part of an agency's capability and toolkit is good PR. BlueFocus has shrunk its talent pool over the years. It's facing a landscape that is dominated by leading holding companies and challenged by independent specialist agencies. You can't fault them for trying to find a point of difference."
Pete Lin, CEO of We Are Social North Asia, sees this event on two levels. Firstly, he thinks “it's a brilliant PR campaign by BlueFocus. Being the first agency to articulate its POV (point of view) and SOP (standard operating procedure) regarding AIGC is commendable and deserves the mass exposure that it's getting on social media”. Meanwhile, he believes “it's a risky operational move, as it instantly adds risk to its creative production and adds stress to a workforce that is not yet fully trained up on using AIGC for client campaigns”.
AI-generated content: a mixed global response
Generative AI continues to face mixed reactions around the world, as some professionals in creative industries fear it may take away their jobs. In China’s video game art industry, AI image generators such as Stable Diffusion and DALL-E 2 are increasingly used to replace humans.
In the advertising industry, holding company Omnicom Group is embracing generative AI and CEO John Wren has said the agency wants to embrace it as quickly as it possibly can.
There are agencies already using image-generation programs to create visual concepts for clients and internal teams. In a recent Lunar New Year project, for example, creative agency Distillery created a festive digital children's book using ChatGPT for the story, MidJourney AI for the visuals, Murbert AI for the music, Narakeet AI for the narration, and Voundry AI for distribution.
There are other agencies who use ChatGPT for internal communications, often with the aim of improving creative decks and briefs.
"AI is nothing but technology. As technology has always done, it optimises processes,” Rollen Gomes, the group technology director for Singapore at RGA tells Campaign Asia-Pacific.
“It will definitely speed up a number of tasks, but as of right now, it's not replacing humans. We need to pay a lot of attention to any output generated by AI to ensure its accuracy and that it makes sense for the use case."
R3's Paull also cautions that using AI as a means to impress clients can be a double-edged sword. "It's important for marketers to look out for instances where agencies might add AI or machine learning capability to their credentials," he says. "It might look like technology and sound like technology, but there's no proof that the work done will be any better for the client. AI makes for good conversation, but its processes, output and impact must be measured."
Some agencies are also reluctant to fully utilise the tool because of copyright concerns. Getty Images has sued AI image generation Stability AI, the maker of Stable Diffusion, for copyright infringement and Samsung engineers shared sensitive corporate data with ChatGPT.
In a recent interview with Campaign, VaynerMedia chief executive Gary Vaynerchuk said he has not approved the usage of generative AI in VaynerMedia because he is concerned about copyright and trademark.
Similarly, at VMLY&R, new Asia chief creative officer Raymond Chin told Campaign the agency will not use the tools for the next six months as the agency sets parameters for their use.
Governments have also started to take a closer look at generative AI. The Biden administration is currently evaluating the need for possible regulations on AI tools, including ChatGPT.