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In recent years, they have advertising agencies accepted the AI story To demonstrate continued relevance, as such, disruptive technologies threaten their historical value: labor.
Now, AI startups — empowered by agency and ex-Big Tech executioners — are entering the fray with more competition in the promise of “AI agents,” and some brands are starting to listen.
Last week, a new startup called Palona launched with $10 million in seed funding and plans to build AI agents to help consumer brands with sales efforts, customer support and interactive insights.
Palona’s co-founders—former execs at Meta, Google, and Samsung—hope to give AI agents higher emotional intelligence while customizing agents with brand-specific instructions and safety rails. Palona also developed what he describes as a “supervisor” to help control hallucinations and ensure conversations stay within brand guidelines. Palona’s first customers include West Coast pizza chain Pizza My Heart (for ordering pizza) and home security firm Wyze (for learning about camera and subscription options).
“Our product goal is gentle persuasion, not aggressive persuasion,” said Palona co-founder and CEO Maria Zhang, speaking about AI agent conversations with consumers. “We’ve made it clear, and all our customers want gentle persuasion, too.” No one wants that annoying kind of salesperson. “
One of Palona’s first clients is Mindzero, a wellness center based in South Carolina. It recently started using an AI agent to cut response times from days to mere seconds, Mindzero CEO David Semerad said. Along with answering customer questions, the AI agent also integrates with Mindzero’s booking system. Semerad thinks this will be especially useful as Mindzero Scales from 1 to 10 locations across the US in the next year.
Palona is just one of several startups that have launched in recent weeks to help brands build AI agents. Another is anthrology, founded by ex-execs at MediaMonks, Next generation agency Helmed by industry veteran Martin Sorrell.
However, rather than just building agents, the startup also offers other data solutions and AI advisory services. One of the first clients is fashion brand Anthropologie, which is working with the startup to increase the use of data downstream while using AI agents to improve employee workflows.
Anthropology’s focus on specific projects rather than massive budgets aims for a more targeted approach with clients rather than asking clients to cut big check everything. Tyler Pietz, co-founder of Anthropic, said traditional three-year plans with systems integrators—and the expensive budgets that come with them—don’t work with the current AI landscape.
“Why would you ever throw $350 million or $500 million into a campfire and hope the smoke makes you healthier?” Pietz said. “It’s very clear that every week there’s going to be something that changes the whole game.” Not always at the highest level, but with a new approach to this or that. “
Working with small teams can help brands navigate the bleeding edge of innovation, said Jon Halvorson, Mondelez’s global SVP of consumer experience and digital commerce. They are also often less threatening to existing partners than large consultancies that might compete with agencies for business. However, he noted that this does not mean that clients should choose to work only with startups.
“Whenever you go through these massive change management projects, you can’t always have all the talent on day one,” Halvorson said. “A lot of niche talent in this field doesn’t want to be in your house on day one.” So you need fractional expert resources. “
Speed, efficiency and trust are all key when it comes to AI, Halvorson said: “Every day as the world changes, you need that one trusted source to be in your ear.”
Preparing companies for AI agents is not always an easy task. Depending on the applications, this could require major overhauls of how companies collect, clean, store and access their data. Other tasks include new considerations for data governance to define who should be given access to various data sources.
“The models that come out and people get into all the use cases,” said Erin Foxworthy, Snowflake’s industry lead for marketing and advertising. “I think there’s a lot in this industry, there’s a data layer. You want to lean into a data base that is neutral and agnostic so you’re not tied to something you don’t know will change later down the line. “
A week in search of AI
It was another week for generative AI searches across tech giants, smaller rivals and even a new startup.
OpenAI Bearded his long-awaited AI agent “Operator” tool With research partners in e-commerce, travel, news and- eBay, Etsy, Target, Instacart, StubHub, Booking.com – and some publishers like Thomson Reuters, Associated Pressand Axios.
Confusion announced a new integration with Crunchbase To enable users to search for financial data, conduct market research and search for sales leads. Other updates this week include today’s release of a new mobile assistant for Android and Tuesday’s debut of a new search interface Sonar.
Other updates this week came from the browser Bravewhich released a new feature called RERANK that allows users to customize their search algorithm to prioritize and deprioritize page results. Meantime, Microsoft Shown new AI search features rolling out to Windows 11 users first before rolling out to public availability later.
Challenges and Products – More AI news and announcements
- More brands are bringing AI to their Super Bowl ads, with Godaddy planning to promote its Airo platform and meta ad buyers for its smart ray glasses.
- LinkedIn has become the latest tech giant to face AI-related courtafter LinkedIn Premium customers who claimed the Microsoft subsidiary trained AI models using private messages without consent.
- President Donald Trump reset AI regulations in the US after rescinding a 36-page executive order on AI signed by then-President Joe Biden in 2023. Instead, Trump issued a new one-time EO promoting American innovation while pushing for AI systems. Avoid “ideological bias or engineering social agendas”.
- Infinite Reality, an immersive technology company, has announced plans to acquire e-commerce startup Obsessed, which helps brands create virtual shopping experiences using AI.
- Mozilla and Eleutherai published new ones research on using open source datasets for LLMS training. The paper, published in collaboration with more than two dozen researchers, provides best practices, policy recommendations, and aims to show how open datasets can make AI models fairer, more transparent, and more accountable.
- Anthropic debuted A new feature called Citations, a new API that allows his Claude models based on source documents.
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