‘A game-changer’: generative AI agencies are top of the acquisition list for Brandtech

The company offers a generative AI product that manufactures marketing creative – including copy, images and video content – for use in performance media channels.

Brandtech’s acquisition of the firm will see it scale up that capability to target large enterprise clients. According to group founder David Jones, “generative AI will be the most game-changing thing in marketing that we’ve seen in our seven to eight years. It’s going to disrupt every aspect of marketing and every aspect of the world.”

Following the buy-out, it plans to train up to 1,000 staffers as generative AI experts, employing subsidiary Jellyfish’s “huge training capability”, usually deployed for clients, internally. Jones tells The Drum that “we are putting Pencil at the absolute core and heart of the business. It's an unbelievably significant acquisition an unbelievably significant moment for the company.”

“We launched we’re saying we think we can do all marketing better, faster, cheaper using technology.“ The addition of AI, he says, will inject “steroids“ into that proposition. “We believe that this move makes us the number one in the marketing space and generative AI.”

Larger clients targeted

Pencil combines text-based generative AI tools based on OpenAI’s large language models, image-generating applications derived from partnerships with Stability (the company behind Stable Diffusion), and a proprietary video tool.

The service allows clients to create copy, images and video content for use in performance channels such as Facebook, as well as offer analysis on a given ad’s effectiveness.

According to Pencil co-founder Will Hanschell, 4,000 clients have invested over $1bn of media spend with it since its foundation in 2018. Pencil previously targeted “small businesses that maybe can't afford to work with an agency in the first place,” he says, with the promise of “closing the loop around generating content that’s going to work as an ad.”

Demand for the company’s services has gone through the roof since the emergence of ChatGPT, Hanschell says. “It really pushed this into the mainstream. I think you’d be hard-pressed to find a client now that hasn't played with ChatGPT and been amazed by it.”

Pencil charges clients as little as £119.99 for that service. But now demand has been proven, Brandtech wants to scale it up and go after much larger marketing customers with a new ‘Pencil Pro’ service. Unilever and pharmaceutical titan Bayer are among the first clients.

Patricia Corsi, CMO and CIO at Bayer’s consumer health division, says it extended its relationship to Pencil, after already employing in-housing specialist Oliver.

“We’ve built a successful partnership with Oliver and The Brandtech Group, and are now delighted to extend this as we become one of the world’s first healthcare/science companies to pilot generative AI, and the first to use Pencil Pro,” she says. “The potential for the world, the world of marketing and Bayer is enormous.”

Her Unilever counterpart Giles Morrison adds: “Everyone is talking about GenAI and Unilever is excited to be running multiple pilots across the space. Pencil Pro is a true enterprise proposition that could really impact our business at scale.”

Jones says those clients will be able to benefit from a scale-up in their content output using Pencil. “it’s not that this can actually do something better at the moment than a human. But it’s just the speed with which it can do that… and how little it will cost. That’s the game changer.”

Value added

He predicts that, in time, “all marketing will be done with generative AI playing a critical role. Every major global brand and global company will do that. We'd like to be the leaders in helping them.”

The acquisition follows closely on Brandtech’s successful pursuit of Jellyfish. Jones says Pencil’s capabilities will add value to its other agency properties, including Oliver.

“In Oliver, we have the world’s number one company for in-housing. With Jellyfish we have a company that is amazing at delivering cutting-edge tech to clients. We believe that you know, there is a core need for the human in the loop. And that in Oliver and Jellyfish, we have two companies who can brilliantly deliver those humans in the loop that connect into the pencil pro platform.”