Blue Label stops creative outsourcing, but AI cannot replace the work of creative people

BlueFocus has stopped creative outsourcing and will use AI technology to complete related work. This news quickly sparked heated discussions in the industry. The author of this article analyzes whether BlueFocus’s decision can solve the difficulties of the advertising industry. Let’s take a look!

On April 12, BlueFocus Huaxia sent an email saying, "In order to curb the trend of hollowing out of core capabilities and to lay the foundation for fully embracing AIGC, the management has decided to completely stop the four types of outsourcing expenses related to creative design, program writing, copywriting, and short-term employees indefinitely."

BlueFocus is the largest public relations and marketing group in China. This email means that BlueFocus may no longer use any form of copywriting outsourcing services in the future, but will use AI technology to complete related work. This decision has triggered heated discussions in the industry about the role and impact of AI technology in the advertising industry.

It seems that Blue Label is embracing new trends and transforming old industries with an innovative attitude, and the market is quite supportive of this, with its stock price rising by more than 16% at one point. But is this actually the case?

1. Embracing AI is more likely an attempt to reduce costs and increase efficiency

In recent years, BlueFocus has not had an easy time. In the past three years, its net profit has often been zero or even negative year-on-year. In 2022, BlueFocus' net profit attributable to shareholders of listed companies was a loss of 18 billion to 22 billion yuan, a year-on-year decrease of about 450%.

Faced with such financial conditions, most companies either try to increase revenue or save costs.

Let’s talk about revenue growth first. The advertising and marketing market has not been well affected by the epidemic in recent years, and there is no sign of recovery this year.

According to data from CTR Media Intelligence, the advertising market decreased by 6.7% year-on-year in January-February 2023. Among them, advertising market spending in February fell by 11.9% year-on-year, and monthly spending fell by 23.3% month-on-month. Both the year-on-year and month-on-month declines widened compared with the previous month.

So although the epidemic is over, retaliatory consumption and large-scale advertising have not come. On the contrary, consumers' consumption behavior has become more conservative, and companies' advertising has become more cautious. As far as I know, almost all major companies have reduced their advertising budgets this year.

In an overall tightening market, it is almost impossible to increase revenue, so the only way is to reduce costs.

Replacing outsourced creative, content and other services with AI is one solution. It can help BlueFocus save manpower and time costs. Regardless of whether what AI provides can meet the company's needs, at least this is the solution.

2. Chronic problems in the public relations and marketing industries

BlueFocus's attempt to replace content creation with AI reflects its solution to the downturn and lack of growth in the entire advertising and marketing industry, but this solution is very likely to not resolve the difficulties the entire industry has faced in recent years.

I mentioned these issues in the article "Advertising Companies Forced to Become Executors by Internet Companies". Here is a brief summary:

Changes in the media ecology: With the advent of the mobile Internet era, the media ecology has begun to change dramatically. Large media such as TV has become small media such as numerous KOLs, and big ideas such as TVC have become small ideas such as short videos. Compared with the former, the budget of the latter has been greatly reduced, but the work is more tedious and detailed, more manpower is required, and the efficiency of a single person is lower. The income and profits of creative companies have begun to decline significantly.

A large number of advertising talents have been lost to the Internet: Whether in terms of income or growth space, advertising companies are far inferior to Internet companies, so a large number of advertising company talents are easily poached by Internet companies. Talent shortage is a recognized problem of advertising companies. In the past, people who graduated from prestigious universities and studied advertising and marketing aspired to work for 4A companies such as Ogilvy and BBDO, but later these people aspired to work for BAT. In the past, if you didn’t want to be a president, you would be an advertiser. Now, if you don’t want to be a president, you will go to an Internet company. Without talent, the core competitiveness of advertising companies, they will become executors and can only do hard and tiring work. It is an inevitable trend to earn hard-earned money.

Key customer relationships no longer play a role: It is a well-known secret among advertising companies that customer relationships play an extremely important role in business development. Although some advertising companies are average in level, they have a good relationship with the client and are deeply bound to the business, so they can provide continuous services for many years. However, as a new force, Internet companies have not been tainted with this atmosphere since their birth. They adhere to the principles of transparency, openness, and efficiency first. If the relationship affects efficiency, then the relationship will not play a role.

Lack of understanding of the internal organization and boss of the company: Advertising companies cannot understand the organization and needs of Internet companies, and therefore cannot advance projects according to the ideas of senior management as before. As a result, the plans they make based solely on their own market strategies are completely unable to meet the needs of the client's boss.

Advertising companies have no operational resources: In the traditional advertising era, creativity only needs to show Party A's products, and most of the time, the product does not need to cooperate with anything. However, the products of Internet companies are not physical products, but mostly virtual apps. How well a creative idea performs is largely reflected in the highlights of the product's functions or designs. For the latter, Party B has no participation at all, and needs Party A to take the lead. Party A will design new functions or new ways of playing for the product, and Party B only needs to cooperate in dissemination.

The embarrassment of not being able to bring about real business growth: Today, Party A begins to calculate ROI in detail. What Party A cares about is how much growth is achieved by how much investment is made. If Party B still cannot bring Party A some clear benefits at this time, then when the market cools, the first thing Party A will cut is advertising fees.

In summary, under the new situation, Party B does not understand Party A's company's operating mechanism, personnel structure, and senior management needs, and Party B's outstanding talents have all been recruited by Internet companies. As Party A's own creative ability improves, most of the time when Party A is doing marketing, it will determine its own strategies and even core ideas, and Party B will increasingly only do execution work.

Therefore, the money that Party B can earn will become less and less.

These chronic problems have made it difficult for the entire industry to move forward and grow. The advertising industry has long become an industry that is not very profitable. Under such circumstances, it is easier to find ways to reduce costs than to find ways to increase revenue.

3. Can AI solve the problems in the advertising industry?

So can AI really replace content creators, save costs for companies, and solve the problem of low profits in the advertising industry? My conclusion is that in the short term, AI can only solve limited problems.

I have also used ChatGPT and Bing in depth recently. Based on my experience, I would like to share my thoughts.

Generally speaking, we divide content creation in the marketing industry into marketing plans, copywriting, visual design, video creation, etc. The degree to which AI can complete these contents varies.

1. Marketing plan: AI can hardly do it now

For example, I asked ChatGPT to help me write an integrated marketing plan for a big promotion, and it gave the following results:

Basically, AI provides channel strategies but lacks content strategies. The reference value of the answers is less than 10% for an advertising practitioner. Some people say that it is because the content you feed it is insufficient. That may be the case, but you cannot judge to what extent the information you provide can enable it to come up with a perfect solution.

A marketing plan requires a combination of strategy, insight, content, creativity, media, etc. In my opinion, it is impossible to let AI replace an experienced advertising strategist in the short term.

2. Manuscript: News releases are basically OK, but in-depth articles are not OK

The performance of AI in news articles has already made people feel relatively perfect. For example, I asked Bing to write a press release regarding the Blue Label incident, and what it wrote was basically usable after a few minor modifications.

However, AI cannot meet the requirements for in-depth articles, which require insight, analysis, and opinions, which AI cannot provide at present. Therefore, authors who create in-depth content do not need to worry too much about the threat of AI in the short term.

3. Creative copywriting: lack of soul

In addition to manuscripts, the advertising industry needs some creative copywriting. Taking slogans as an example, AI can give some unsatisfactory results. That is to say, the content it gives can be used as a reference, but it cannot be used directly because it cannot understand the background and the boss’s requirements 100%. The content it gives always makes people feel lacking soul.

3. Visual design and video creation: can be used as tools, not as creators

In terms of visual design, Midjourney can give a very cool visual presentation, but the problem is that it cannot give you the results you want based on the brief. People in the industry know that if you make a creative poster, the picture needs to fully express the brand's tone and core copy. At present, even designers need to modify it many times to meet the requirements. Midjourney will not do better than designers in this regard.

The picture below is a promotional poster made by Midjourney. Doesn’t it look good? My understanding is that as an ordinary Taobao store owner, such a poster is good enough for him, but for a large client, such a poster needs to be remade according to the client’s tone, interest points, product features, etc. The key problem is that the brief includes complex specifications such as brand tone, product tone, VI, interest points and even the boss’s preferences, which AI cannot understand and meet for the time being.

(Source: Zhihu Cao Tingting)

As for video production, Blue Label’s email said that the work replaced by AI does not include video creation for the time being. At present, it is impossible for AI to replace video creation.

In general, the creative industry cannot be replaced by AI in many aspects because the essence of creativity is still human, and human thinking is never standardized, which is why humans can create imaginative content. AI is currently unable to achieve the thinking of the human brain.

But in the future, when the intelligence of AI grows exponentially, it is not ruled out that it will be able to think like humans and provide content that meets the needs of the advertising industry. But by then, AI will disrupt more than just the advertising industry.

Blue Label's attempt to replace content creators with AI seems to be for innovation and embracing change, but in fact it is a means to reduce costs and increase efficiency. I have big doubts as to whether Blue Label can really make AI play an important role in work.

Blue Label said it wanted to create the Metaverse two years ago when the Metaverse was at its peak. Now that ChatGPT is at its peak, it sent out such an email again. It is hard not to think that this is a kind of opportunistic speculative behavior.

Author: Xunkong

WeChat public account: Xunkong’s Marketing Revelation (ID: xunkong2005)