The Agency Profitability Crisis: Why "More Hands" Is No Longer the Answer

The Agency Problem: Video ad lifespan is now under 4 days. You can't hire editors fast enough to combat creative fatigue without destroying margins.

The Solution: Programmatic video generation decouples revenue from headcount—agencies report 10x creative testing capacity and 80% reduction in production hours.

The Framework: The "Infinite Asset" approach uses three layers: data ingestion (Brand DNA), variation engine (hooks, avatars, styles), and feedback loop (performance-driven iteration). Tools range from cinematic (Runway) to UGC-focused (Koro, HeyGen).

Programmatic Video Generation is the use of AI algorithms—specifically Large Language Models (LLMs) combined with diffusion models and avatar rendering—to autonomously create video assets from structured data (like product URLs) or unstructured prompts. Unlike traditional editing, which requires frame-by-frame manipulation, programmatic generation assembles visual, audio, and script elements instantly based on performance data.

For agencies, this technology shifts the business model from "selling hours" to "selling outcomes." Instead of billing for 10 hours of editing to produce one video, you utilize Generative AI to produce 20 variations in minutes, charging based on the performance lift rather than the labor input.

Traditional video production is linear and bottleneck-prone. If your lead editor calls in sick, production halts. AI video generation introduces parallel processing to your creative operations.

Below is a breakdown of how the workflow shifts when integrating tools like Koro or HeyGen into an agency environment:

Key Insight: The primary saving isn't just money—it's the opportunity cost of waiting two weeks to launch a campaign.

To truly scale, agencies must move beyond using AI as just a "tool" and adopt it as a workflow methodology. We call this the Infinite Asset Framework, anchored by Koro's "Auto-Pilot" capabilities.

1. The Data Ingestion Layer

Before a single pixel is generated, the system must understand the brand. Using API Integration, tools scrape the client's website and competitor ads to build a "Brand DNA" profile.

• Micro-Example: Koro scans a client's Shopify store to identify that "cruelty-free" is a high-frequency keyword in 5-star reviews, automatically prioritizing this angle in scripts.

2. The Variation Engine

Instead of betting on one "hero" video, agencies use Generative Ad Tech to produce massive variance. This involves permutating hooks, visual styles, and avatars.

• Micro-Example: Generating 5 versions of the same script: one with a female avatar in a home setting, one with a male avatar in a gym, and three faceless variations using dynamic B-roll.

3. The Feedback Loop

The final step is connecting creative output to performance data. The AI shouldn't just make videos; it should learn which ones work.

• Micro-Example: If the "User Testimonial" format yields a 20% lower CPA on Facebook, the system automatically queues more testimonial-style scripts for the next batch.

Not all generative tools are built for the same purpose. Here is how the top contenders stack up for agency needs.

1. Koro

Best For: High-volume social ads, UGC-style content, and automated daily marketing.

Koro distinguishes itself by acting as an "AI Employee" rather than just a video editor. For agencies, its "Ads CMO" feature is a game-changer. It doesn't just wait for prompts; it actively researches competitors and suggests winning angles.

Agency Advantage: The "URL-to-Video" feature allows you to onboard a new e-commerce client and have 10 creative assets ready for approval within the first hour of the engagement. It supports 95+ languages, making global expansion effortless.

Honest Caveat: Koro excels at rapid UGC-style ad generation at scale, but for cinematic brand films with complex VFX or specific celebrity endorsements, a traditional production studio or tools like Runway are still the better choice.

2. Runway

Best For: High-end visual effects and "text-to-video" artistic styles.
Runway is the darling of creative directors. Its Gen-2 model allows for incredible control over style and motion. However, for performance marketers, the workflow can be slower, as it requires more manual prompting and assembly compared to Koro's automated pipelines.

Theory is fine, but execution is everything. Let's look at NovaGear, a consumer tech brand that faced a classic agency bottleneck: they needed to launch video ads for 50 different SKUs for a holiday sale but didn't have the budget to ship 50 physical products to creators.

The Problem:

• Logistics: Shipping costs estimated at ~$2,000.
• Time: Minimum 3 weeks for creators to receive products and film.
• Budget: Agency quote for 50 UGC videos was ~$7,500.

The AI Solution:
NovaGear utilized Koro's URL-to-Video technology. Instead of physical shoots, they fed the product URLs into the system. The AI scraped the technical specs and high-res images, then used hyper-realistic AI Avatars to demo the features on screen.

The Results:

• Speed: Launched 50 product videos in 48 hours.
• Cost: Zero shipping costs and a fraction of the agency quote.
• Outcome: They saturated their retargeting pools with product-specific creative, driving record Q4 ROAS.

See how Koro automates this workflow → Try it free

Agencies often ask, "Is this safe for my client's brand?" It is a valid concern. When scaling with AI, governance is critical.

1. Copyright & Ownership

Ensure the platform you use grants full commercial rights. Most enterprise-grade tools (like Koro and HeyGen) provide commercial licenses for paid plans. Avoid using "research-only" beta tools for client work.

2. The "Uncanny Valley" Risk

Low-quality AI avatars can hurt brand trust. Always audit the Lip-sync quality and eye movement. If an avatar looks robotic, use it for top-of-funnel traffic where novelty works, but switch to real humans for bottom-of-funnel trust building.

3. Transparency

While not always legally required depending on your region, it is best practice to label AI-generated content or ensure it is indistinguishable in quality. The goal is efficiency, not deception.

Don't try to replace your entire video department overnight. Use this phased approach to integrate Generative AI safely.

Days 1-7: The Audit & Pilot

• Task: Identify the "Creative Trash"—low-value tasks that consume time (e.g., resizing, basic captions, translation).
• Action: Assign one strategist to test Koro on a single low-risk client account.
• Goal: Generate 5 usable assets without opening video editing software.

Days 8-14: The Hybrid Workflow

• Task: Integrate AI assets into your main production pipeline.
• Action: Use AI for the "A-Roll" (talking head) and have human editors overlay custom motion graphics.
• Goal: Reduce editor workload by 50% per video.

Days 15-30: Full Scale Automation

• Task: Activate "Auto-Pilot" modes for evergreen clients.
• Action: Set up automated daily generation based on trending topics.
• Goal: Achieve a daily posting cadence on TikTok/Reels for 3+ clients.

Forget "views." When using AI for performance marketing, measure the efficiency of your creative loop.

1. Creative Refresh Rate: How often are you introducing new winners? AI should increase this from weekly to daily.
2. Cost Per Creative (CPC): Total production cost divided by number of usable assets. This should drop by >80%.
3. Time-to-Market: The delta between a trend emerging and your ad going live. Aim for <4 hours.
4. ROAS on AI Creative: Compare the return on ad spend of AI assets vs. human assets. Often, AI wins simply because you can test 10x more variations to find the outlier.