Artificial Intelligence Dept Agencies

AI-related services now account for over a third of Dept’s revenue

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By Sam Bradley, Senior Reporter

March 26, 2024 | 7 min read

As the business attempts to build on its revenue-boosting merger plan, Dept has gone all-in on AI tools.

JT

Joanna Trippett, managing director at Dept / Dept

In a sign of how deeply the advertising sector has embraced AI tools, the agency network Dept now takes more than a third of its revenue from AI-related services.

The firm, which is headquartered in Amsterdam and backed by private equity firm Carlyle Group, recorded global revenues of £440m ($559m) in 2023; 15% came from its UK business. Much of the company’s AI operations are based in London.

In addition to data and AI services, UK managing director Joana Trippett says the agency is also using proprietary tools to reduce the costs associated with production work. According to Trippett, Dept shaved £7.5m off production costs in 2023 by automating translation and versioning processes which retool creative assets so they can be used in different markets. She estimates AI workflows reduced costs by approximately 60%.

Current production methods, she says, mean employing “a slow, expensive, talented team in a studio somewhere, probably in London, sat doing translations and content variation.

“We have basically automated that entire process.”

Using a tool Dept has dubbed Lightspeed, the company slimmed down the versioning workflow by creating set templates, agreed with clients beforehand. Variable elements of a given design asset – for example, a background image or a given line of copy – are then able to be switched out at pace. Clients using the service include delivery platform Just Eat; the agency created a production initiative for the firm termed ‘Project Sunday’ that automates asset creation for 17 markets. Overall, it's led to an 140% increase in organic production revenue in the last year.

“It’s not just design time saved; it saves time on project management conversations,” she adds.

The company merged four UK businesses acquired in previous years under a single Dept umbrella last year, a process Trippett says shifted the way the firm markets itself. She says the plan, which merged agencies including TamTam, Byte and Feed under a single brand, became necessary after its largest UK clients established accounts across the portfolio. The merger was put into practice in March 2023.

eBay, for example, initially used the firm to handle its CRM lifecycle management but had come to rely on it for content automation, social media planning and buying and digital creative.

“Where they had been previously seen as disparate teams, by sitting them down and presenting the whole proposition end-to-end across tech and marketing… our clients are now going: ‘OK, can you help us with this?” says Trippett.

That meant restructuring teams around areas of expertise or specific technical disciplines rather than legacy business lines. No jobs were cut due to the mergers.

“Bringing them together was [in order] to foster a better way of working, rather than a cost-saving exercise. If our proposition is based on connecting the CMO and the CTO, then the teams speaking to those businesses need to be called the same thing.” The alternative would prevent the agency’s management from creating “that sense of synthesis and cultural integration.”

In fact, the move to merge its UK units (part of a longer-running ‘One Dept’ strategy) appears to have helped Dept capture larger portions of client budgets in a year when other agencies were fighting tooth and nail to land new accounts.

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“It felt like the business was ready for it. In hindsight, we probably did it at the worst possible time for the economy. In March last year, the UK was the worst economy in the G7.”

In response, Trippett says the agency chose to double down on its existing client roster. Though Dept won accounts with travel comparison app Skyscanner, distiller The Macallan, airline Easyjet and fashion brand Napapijri, 85% of its revenues last year came from recurring client income. “The reality is that most businesses cut their budget last year. But most of our existing clients were spending more with us. That’s a reflection of our deep partnership and deep collaboration.”

Though Trippett says the merger was planned independent of AI considerations, demand related to the tech has driven at least some of that spending.

UX projects have been a particular area of client demand; in response, Dept has gathered its AI-related UX solutions into a new unit dubbed The Green House. The idea is to create prototype products in just a two-day turnaround period to help push forward project work faster.

“It can take a sort of very early stage idea, an embryonic idea, and turn it into a prototype. Normally, that might take six weeks with a really good team, but it can done via The Greenhouse in as little as 48 hours. We’ve found it extremely powerful, both in motivating our clients to think about how we can use AI in smart ways, but also, it’s really creating momentum within our internal teams.”

Now that it is done bedding in the new organizational structure, Trippett says she hopes the company can navigate the current UK recession with “confidence.”

“It’s hard for business. It’s hard for our people. But we’re moving into this year with confidence, momentum and really deep client relationships.”

Artificial Intelligence Dept Agencies

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