Unlock the Publisher’s Digest for free
Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
Advertising start-up The Brandtech Group has been valued at $4 billion after raising new funds that will be used to revolutionize the traditional advertising industry by using artificial intelligence to create marketing campaigns.
Founded by former Havas CEO David Jones, the group has raised $115 million from new investors including Fimalac, the French company that owned Fitch, and NendoLabs, a venture capital firm, which values the group at $4 billion dollars. Existing investors, including Mousse Partners and Bansk Group, also supported the new fundraising.
Brandtech Group was launched in 2015 with the aim of making marketing services better, faster and cheaper using technology, including machine-generated content and artificial intelligence.
Advertising agencies such as WPP and Publicis are now investing hundreds of millions in developing AI services to offer clients, which can dramatically reduce the costs and time needed to create advertising campaigns.
However, the shift to using generative AI in particular threatens thousands of jobs in the sector, and investors in these companies are concerned about the impact of its use on their businesses. Shares in Martin Sorrell’s S4 Capital fell 15% on Wednesday, valuing it at just £240 million, after it was forced to warn on revenue.
Speaking to the Financial Times, Jones said: “The mobile phone has made everyone a creator – the AI generation makes everyone an advertising agency – this may not be good news for traditional legacy agencies with 100,000 employees, but it will be great for the world ”. of marketing in general”.
The group has hired former Lazard International CEO Matthieu Bucaille as finance director, replacing Jean-Marc Antoni, who was also one of the group’s founding partners. The company said Antoni will retire and take on a part-time consulting role starting in January 2025.
The group will use the new funds to increase scale and make further investments and acquisitions. Since its launch, Brandtech Group has recorded an average annual organic growth rate of more than 20%. Jones declined to say how much the company’s latest fundraising will be, although investors in the company have indicated the value was about $4 billion.
Pencil, Brandtech’s generative AI platform, predicts performance and generates marketing assets such as videos and images. Typically, Pencil ads are 10 times faster, perform twice as well, and cost 30 to 50 percent less, according to The Brandtech Group.
Jones said its AI tools will also be rolled out to its influencer businesses, allowing them to create content much cheaper and faster. Advertising could also be targeted to individuals on a large scale using artificial intelligence, she added.
Jones said: “The AI generation will profoundly change, not just every aspect of marketing, but the entire business.”
Brandtech Group has also invested in other technology companies, including Niantic, maker of Pokémon Go, and Pinterest.