Cars aren't the only thing Volkswagen wants to automate. Artificial intelligence is managing the brand's media buys in Germany and proving to be more effective than its media agency. Whenever Volkswagen uses the recommendations from Blackwood Seven, a Danish media agency that uses AI and predictive analytics to forecast ad spend decisions, it sells more cars than it would have if it had gone with its media agency's recommendation, according to Lutz Kothe, the head of marketing and PR for Volkswagen's passenger cars. Kothe said his team uses Blackwood Seven's algorithm to buy the right ads based on sales. Defining a role for the AI platform, however, has taken Volkswagen a while.

The Digiday AI Marketing Summit is coming up in April and will cover how brands can understand and use AI and machine learning in their marketing. If you're a brand marketer figuring out how to use AI for customer service, content creation, internal data organization and more, apply for a complimentary pass here. Cars aren't the only thing Volkswagen wants to automate. Artificial intelligence is managing the brand's media buys in Germany and proving to be more effective than its media agency. Whenever Volkswagen uses the recommendations from Blackwood Seven, a Danish media agency that uses AI and predictive analytics to forecast ad spend decisions, it sells more cars than it would have if it had gone with its media agency's recommendation, according to Lutz Kothe, the head of marketing for Volkswagen's passenger cars in Germany.

The Digiday AI Marketing Summit is coming up in April and will cover how brands can understand and use AI and machine learning in their marketing. If you're a brand marketer figuring out how to use AI for customer service, content creation, internal data organization and more, apply for a complimentary pass here. Cars aren't the only thing Volkswagen wants to automate. Artificial intelligence is managing the brand's media buys in Germany and proving to be more effective than its media agency. Whenever Volkswagen uses the recommendations from Blackwood Seven, a Danish media agency that uses AI and predictive analytics to forecast ad spend decisions, it sells more cars than it would have if it had gone with its media agency's recommendation, according to Lutz Kothe, the head of marketing and PR for Volkswagen's passenger cars.

In the world of media, artificial intelligence may be hot, but it's no shiny object. Concepts like artificial intelligence, machine learning and natural language processing are bleeding into all facets of the ad business. Today, media shops can set up AI dashboards that alert them to strange patterns in their metrics, and some agencies are looking at ways to use AI to make their internal processes more efficient and make employees happier. And, of course, clients are looking for work that has AI woven in, whether it's Alexa skills or chatbots. Any time an explosive new technology takes hold, agencies have to navigate how it fits into their business.

As artificial intelligence (AI) becomes mainstream, it feels like we are careering past a point of no return. The data-driven approach to media buying we have proudly cultivated is going to render us all obsolete as we are replaced by computers. The impact of artificial intelligence on our workforce looks bleak.

Trust is the foundation of all relationships, particularly in media. If you don't trust your agency, you shouldn't be using them -- especially related to advertising. There's a lot of talk in the marketing and media domain at the moment regarding transparency related to media buying. The infamous ANA report on media transparency in the ad industry has done its part in stirring up this debate, which has been brewing under the surface for decades. When I say decades, I really do mean decades. The fundamental business model of media agencies and consequently its issue with transparency has been around since the 1960s.

There's a reason transparency is such an important topic of discussion throughout the industry. In June, the Association of National Advertisers (ANA) published a bombshell of a report revealing that executives were aware of -- and sometimes mandated -- extensive use of nontransparent practices like rebates and kickbacks. As a direct response to the report, JPMorgan Chase sent shockwaves throughout the industry when it became the first big brand to hire a team of auditors to examine its media agency. Ultimately, Chase wanted to ensure "that they are getting what they paid for when it comes to their advertising spend and that the agency has been compliant with the contract." It seems that as the industry has grown, the power has migrated to the media agencies, rather than the marketers.

When the three founders of Blackwood Seven set up their artificial intelligence media agency in Denmark in 2013, they didn't pick the name just because it sounded enigmatic with military overtones. They wanted a short name that would work online and wasn't already taken. But Blackwood Seven, which has just opened a UK office, has provoked fear across the big media agency networks because its algorithm-based predictive technology threatens to challenge their business model. The Copenhagen shop already claims to manage 400m ( 360m) of billings a year for brands such as Volkswagen, Amazon, Groupon and Dollar Shave Club, and it has 200 staff in offices including Germany and the US. "So far, it's been a sprint – we've been running fast," Carl Erik Kjærsgaard, Blackwood Seven's chief executive, says on a visit to London with another founder, Henrik Busch, who is moving to the capital to be its UK chief executive.

Chatbots have been around for decades. There are 18,000 of them on Facebook Messenger alone, with over 1,000 chatting away on Kik in the past six months. Slack has deployed countless bots to help humans get work done in groups since 2013. We've seen a critical mass for the first time, but -- as with any disruptive tech -- there are stages. This first generation of chatbots were derived from common programming languages.

A new type of media agency that uses predictive analytics and artificial intelligence to help clients decide where they should be spending their ad dollars launched in the US last week, with the aim of challenging the traditional agency business model in order to pick up big clients. Blackwood Seven was founded in Copenhagen in 2013 but has now entered the US market, thanks to the acquisition of performance marketing agency Two Nil, which has a roster of clients including Dollar Shave Club, Groupon, Wix, Zillow, Blue Apron, and The Honest Company. Speaking to Business Insider, Blackwood Seven's chief analytics officer Dr Michael Green explained that the company doesn't rely on "gut feeling" to make media decisions on behalf of its clients. Instead, Blackwood Seven is a software platform, which charges clients a software fee, rather than taking an agreed commission on total media spend like normal agencies. Nor does the company make bulk ad spend commitments to media owners or buy media slots in advance and sell them back to its clients.