The venture-capital world seems to be betting big on generative AI creative tools, and it wants adland to buy in, too.
A number of buzzy, AI-related startups have gotten financial backing from major VC firms. However, with an influx of tools that claim to make ad creation easier, some agencies are approaching them with caution.
“On the one hand, we have a lot of enthusiasm, and our creatives are always very excited to try out these new tools,” Michael Horn, global head of AI at Omnicom Advertising Group, said. “Then we have a lot of responsibilities from an ethical, regulatory, and privacy perspective.”
Do a cartwheel: What are some of these tools? Look no further than Cartwheel, a generative AI tool focused on 3D animation that was started by OpenAI and Google alums and is backed by Khosla Ventures and Jeffrey Katzenberg’s firm WndrCo. The company raised a cool $10 million in May. Or Captions, an AI video startup that’s collected over $100 million from VC firms like Andreessen Horowitz and Sequoia Capital, which debuted a set of advertising tools called Mirage Studio last month that can create video content from scratch.
“[For] pitches you don’t have a big budget, and you need to do it fast, and you need to try a bunch of stuff quickly. Speed is what Cartwheel is designed for. 3D character animation is the type of animation we’re doing, and that’s the most expensive type of animation,” Jonathan Jarvis, Cartwheel co-founder and CEO, said. “The director will have an idea, and they’ll assign something to an animator. The animator goes away for three days or a week, animates it, and comes back to the director. The director gives notes, repeat, repeat, repeat. That’s a big reason why it’s so expensive.”
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Dot the I’s and cross the T’s: While startups like Cartwheel may be buzzy, performing due diligence is key, Horn said. For context, Omnicom already has agreements in place with what he called “hyperscalers” like OpenAI and Google, he said, “and we have indemnification agreements with those companies.” Tools from those companies are made available across the agency. The agency has also already put out work for clients like McDonald’s and Nike that was created with the use of AI.
For the new wave of emerging GenAI creative tools, Omnicom only plans to work with “companies that can offer indemnification [and are] not going to generate material that is trained on copyrighted inputs ,” Horn said. Newer tools can also be leveraged more to fulfill bespoke client needs. Creatives are allowed to test them, but Omnicom is more selective when it comes to choosing which ones to use for clients.
“We are simultaneously evaluating literally dozens of these types of new generative tools, and each of them have their special sauce,” Horn said. “At the same time, we have a very rigorous governance process before we can use any of this on commercial work.”