Working closely with agencies every day, we’ve had a front-row seat to the start of one of the most significant transformations our industry has ever experienced – the transition to a world with AI. Through our recent research holding detailed interviews with 30 creative agency leaders, and working alongside more than 20 agencies in their AI journey in 2024, we’ve seen firsthand how AI is reshaping not just how we work, but what’s creatively possible.

Moving past the AI anxiety

Let’s be honest – when generative AI first emerged as a serious tool for creative work 2 years ago, many of us had concerns. Would it diminish the value of human creativity? Could it compromise the quality of our work? Will it make our hard won skills redundant? These were natural reactions. But what we’ve discovered through our research and hands-on experience is something far more nuanced: while the potential for semi-automating some tasks is there, the more impactful use of AI is as a powerful creative amplifier.

What we’re actually seeing

The most inspiring moments in our research came from agencies that have moved past the experimental phase. These AI Pioneers – about 20% of the agencies we studied – are building new ways of working that combine human creativity with AI’s ability to condense and recombine huge amounts of information to deliver more impactful results for their clients.

One agency leader put it perfectly when they described how AI allows creatives to “more easily access their creativity.” We’re seeing teams explore more creative directions, push boundaries further, and deliver higher quality work – not because AI is doing the creative thinking, but because it’s removing barriers to expression and expanding what’s possible.

The real opportunity

The efficiency gains for certain tasks are real (think content localisation, for example). But the real win for agencies is using AI to help them what they do best – strategic thinking and creative innovation. When creatives can quickly explore multiple directions and “get all of their crap ideas out quickly,” as one leader put it, they have more time and mental space for the kind of deep creative thinking that leads to breakthrough ideas.

What this means for agency leaders

From our conversations we’ve learned that successful AI integration isn’t just about having the right tools – it’s about having the right approach. Here’s what’s working:

1. Skills Before Tools

The agencies seeing the best results are those investing heavily in their people. They’re equipping their teams not just with AI tools, but with the skills and confidence to work with AI as it evolves.

2. Strategic Integration

Rather than making AI a point solution for doing a handful of identified tasks, the AI Pioneers are weaving it throughout their core processes. They’re rethinking workflows, team structures, and even their business models to leverage AI’s strengths.

3. Client Partnership

The most forward-thinking agencies are bringing their clients along on the journey, having open conversations about how AI enhances their creative options and encouraging their clients to take advantage of them.

Looking Ahead

We are at the beginning of the AI transition. The agencies that will thrive aren’t those using AI to simply work faster – they’re the ones using it to push creative boundaries and deliver ideas that were previously too complex, too expensive, or too time consuming to be possible.

The future we’re seeing emerge is one where:

A call to action

To our fellow agency leaders: this is our moment. The technology is ready and the opportunity is clear. Yes, there are challenges to navigate – from skill development and agency growth, to client education to data privacy. But the rewards for those who get this right are many.

As the creative industry embraces AI, we’re constantly finding new ways to augment creativity and increase the value we can add to brands. But it’s not enough to just give people the tools – it’s about equipping people with the skills and confidence to work with AI as it evolves.

The question isn’t whether AI will transform our industry – it’s already happening. The real question is how will you integrate AI in a way that augments the value to bring to your clients, and aligns with your agency’s creative vision? Every agency’s journey will be unique, shaped by their particular strengths.

Moving forward

For those ready to embrace this change, the path forward is about building teams that are confident with AI, developing processes that leverage its strengths, and creating work that shows clients the enhanced value we can deliver.

The future of creativity is human + AI, and for those of us willing to embrace this change, the creative possibilities are exciting..

To dive deeper into how creative agencies are successfully navigating the AI transition, download our full report. Drawing on conversations with 30 creative agency leaders and our experience helping over 20 agencies embrace AI throughout 2024, it offers practical insights on everything from building AI-confident teams to developing new client service models. Whether you’re just starting your AI journey or looking to accelerate your adoption, you’ll find actionable strategies and real-world examples to guide your next steps.

Visit wearespark.ai to access the complete research and join the conversation about the future of creative work.

In the dynamic world of experiential design, the integration of neuroscience represents a unique opportunity where science and creativity can combine to help elevate immersive experiences. 

To dive deeper into this fascinating subject, we sat down with Katherine Templar Lewis from Kinda Studios, a women-led neuroaesthetic studio and lab using neuroscience to prove the power of art on human connection and wellbeing. Working with brands, experience designers, platforms and institutions, Kinda turns neuroscience into felt experiences to deepen their impact on a range of interconnected health measures. 

With a wealth of expertise in crafting immersive environments that resonate with audiences, Katherine offers her insights into how experiential designers can harness the power of neuroscience to enhance their design practices. 

Katherine, can you give us a quick overview of what exactly Neuroaesthetics is?

Sure, so neuroscience is the study of the nervous system, including the brain, spinal cord, and peripheral nerves, and how they influence behaviour and cognitive processes. It explores the intricate workings of the brain’s neurons and neural circuits to understand how information is processed, emotions are generated, and actions are coordinated. 

Neuroaesthetics, is a new branch of neuroscience that our work centres in, which studies how different elements affect our environment, be it light, sound, art, nature itself, impacts our brain and body.

It delves into the aesthetic underpinnings of emotion, thought and behaviour, providing insights that can inform various fields, including design. At Kinda Studios, we see neuroscience as a valuable tool for understanding human perception and emotion, allowing us to create immersive experiences that resonate deeply with our audience.

Can you give examples of how Neuroaesthetics influences your design decisions?

Neuroaesthetics serves as a toolbox for us at Kinda Studios, providing valuable mechanisms that we can leverage to enhance our design decisions. While neuroscience doesn’t hold all the answers, it offers insights that allow us to tap into the power of creative difference. For instance, we utilise colours and sounds in design that have an affect on our nervous systems, either positive or negative. Understanding how they can evoke specific emotions and drive behavioural responses allows us greater intention in our designs 

By harnessing the power of art and sensory experiences, we create immersive environments that stir emotions and engage visitors on a deeper level. This approach not only elevates the overall design but also enables us to create social impact through values like environmental stewardship through experiential storytelling. Neuroscience empowers us to create meaningful experiences that resonate with people’s feelings and drive positive behaviour change.

How can neuroscience improve the overall quality of immersive experiences? 

Its influence extends beyond sensory stimulation; it facilitates a deeper connection and understanding of our own selves within immersive experiences. By delving into our innate desire for coherence and connection, neuroscience enables us to craft experiences that resonate deeply with visitors. We recognise that while we experience spaces every day, often without conscious control, immersive experiences offer a unique opportunity to intentionally shape those encounters. We see ourselves as privileged to create spaces where visitors can transcend their everyday reality and be transported to other worlds, fostering a profound sense of connection and engagement with impacts that lingers long after the experience ends. 

What advice would you give experiential designers wanting to incorporate neuroscience into their projects?

My advice would be to seize the opportunity to deepen your understanding and leverage this knowledge to elevate your creations. Fortunately, neuroaesthetics is now offering a wealth of resources to learn from and explore. In parallel, technological advancements are ushering in a new era where we can really harness and utilise scientific insights into experiences to deepen their impact. By leveraging this technology with neuroaesthetic knowledge and insights, you’ll be better equipped to deliver immersive experiences that resonate on a profound level.

Now more than ever is an appetite for transdisciplinary collaboration. The work we do is not just to translate but also to connect. Collaborating and exchanging ideas with both fellow designers and scientists can provide valuable perspectives and inspiration for your projects.

One resource that we often recommend is the book “Your Brain on Art: How the Arts Transform Us” by Ivy Ross and Susan Magsamen. In this book, Susan Magsamen delves into the fascinating intersection of neuroscience and art, exploring how artistic experiences can profoundly impact our brains and lives. It’s a captivating read that offers valuable insights into the power of creativity and its effects on the brain.

By immersing yourself in resources like this and actively engaging with the neuroaesthetics and studios like ours, you’ll be well-equipped to infuse your experiential designs with a deeper understanding of the human mind and emotion, ultimately creating more impactful and meaningful experiences for your audience.

What challenges have you faced using neuroscience within design? And how did you address these?

Incorporating neuroscience into design presents exciting opportunities for world-building and creating immersive experiences. However, we’ve encountered challenges when certain environments don’t align with neuroscience principles. For instance, hospitals and schools often prioritise functionality over emotional well-being, hindering our ability to create truly immersive experiences.

In hospitals, the focus on efficiency and sterile environments can be at odds with the nurturing and healing aspects that neuroscience suggests are beneficial. Similarly, schools face constraints due to limited space and the need to accommodate large numbers of people, making it difficult to implement neuroscience principles effectively.

External factors like noise pollution from motorways and heavy traffic pose challenges beyond our control. Despite these obstacles, we address them by adapting our designs to work within the constraints of the space. Neuroaesthetics research and studios like Kinda Studios are helping in transforming these spaces for greater positive impact. 

We also have an in situ lab that uses neurophysiological equipment to test and explore the impact of different environments on our brain and body. The more that this work becomes a two way dialogue between science and art the further both fields can grow and the greater the positive impact we can create.

While challenges exist, they can help to fuel creativity and drive to find innovative ways to integrate neuroscience into design, even in less-than-ideal circumstances. By embracing these challenges, designers can continue to push the boundaries of immersive experiences and create meaningful connections with audiences.

What methods do you use to measure the impact of neuroscience within designs?

Yes, we use a variety of methods to measure the impact of neuroscience within our designs. This includes utilising advanced technologies such as brainwave monitoring (EEG), electrocardiography (ECG), and gamma wave analysis to gather quantitative data on neural and physiological responses to our experiences. Additionally, we rely on self-report measures to capture subjective feedback from participants, allowing us to understand their emotional and cognitive reactions.

What do you see as the future of neuroscience driven-design and how do you think it will affect the design/event industry?

The future of neuroscience and neuroaesthetic-driven design holds immense potential to revolutionise the design and event industry. As we continue to embrace science-informed design practices, we’ll see a shift towards creating experiences that are not only aesthetically pleasing but also deeply resonant on a cognitive and emotional level. Neuroscience insights will guide us in crafting environments that prioritise human well-being and connection, with an emphasis on integrating elements of nature to enhance mental and emotional health.

 

NEW STATE-OF-THE-ART FACILITY SET TO ENHANCE UNESCO CITY OF FILM STATUS

Award-winning visual content production company Distortion Studios has acquired and fitted out brand new studios in Brislington. The (200m2) studios will enable producers across all disciplines – television, film, advertising, music, corporate and events – to create original IP utilising the cutting-edge technology of Virtual Production and the power of Unreal Engine.

This initiative, supported by funding from Creative UK and in partnership with iMAG Displays, will see the first permanent Virtual Production studio in Bristol. At the forefront of creative and technological development, the new studio was set up by the team at Studio Giggle, a multiple award-winning creative team, including a group of highly experienced Unreal Engine experts and specialists in immersive digital arts.

Distortion Studios are decked out with state-of-the art equipment including 11x4m curved LED Volume, ROE Black Pearl 2 V2 LED panels, 2x2x3m wild wall mobile led panels, 2x Stype RedSpy tracking system, Stage Precision, Pixera Media Servers and Brompton processing.

Later this month, Distortion Studios will open its doors with a series of launch events. They will be hosting two full days of demos on Thursday 25th and Friday 26th April and a drinks reception on the evening of the 25th. The demo sessions will allow visitors to learn more about virtual production, interact with the LED screen, and speak to the Distortion Studios team.

Distortion Studios would like to invite the Bristol Creative Industries members to the launch in April. To attend, please email [email protected] .   

Jonathan Brigden, Managing Director of Distortion Studios comments, “We’re thrilled to have set up our studios in this great City in the South West. Blurring the lines between fantasy and reality, the benefits of VP are simply infinite. We’re proud to be cementing Bristol’s status as a UNESCO City of Film.”

Hannah Long, Portfolio Manager at Creative UK adds “We are absolutely thrilled to have been a part of this journey with Studio Giggle and see the development of their brand new state of the art Virtual Production studio, Distortion Studios, in the vibrant City of Bristol. Jonathan, Steve and their team are such a talented and friendly bunch and a delight to work with. We are proud to have them in the Creative Growth Finance portfolio and as their Portfolio Manager, I cannot wait to see the exciting projects that lay ahead.”

Press contact: Debbie Lawrence at The Lippin Company Ltd : [email protected]

About Distortion Studios

Distortion Studios is a specialist virtual production studio based in Bristol. Blurring the lines between fantasy and reality, Distortion Studios is run by an in-house team of specialists in immersive digital arts. Using cutting-edge equipment, our experts in virtual production are able to create stunning visual effects and captivating environments for film, television, music, events and other media in the most cost-effective way possible.

Our team of award-winning live and film production innovators with more than 20 years’ experience includes masters in Unreal Engine as well as a global network of talent and resources to achieve every creative vision.

Distortion Studios where ideas become reality.

www.distortion.studio

About Creative UK

Creative UK believes in the power of creativity to change lives. We unite the creative industries and generate opportunities for innovation to thrive by investing in creative people and businesses. And we harness the power of the creative sector to build a stronger, fairer, and more prosperous future.

We are the UK’s leading Creative Industries investor and a strategic investment partner for growth-minded creative businesses. Creative Growth Finance is a landmark fund providing vital scale up finance to the UK’s most promising creative businesses, partnering with Triodos Bank to offer loans of £100,000 to £1m.

www.wearecreative.uk/investment

Chancellor Jeremy Hunt delivered the government’s 2024 Spring Budget on 6 March. Here’s a round-up of measures and announcements relevant to businesses in the creative industries.

Spring Budget 2024 measures for creative industries

During his Budget speech, Jeremy Hunt referenced the creative industries. He said:

“We have become Europe’s largest film and TV production centre with Idris Elba, Keira Knightley and Orlando Bloom all filming their latest productions here.

“Studio space in the UK has doubled in the last three years. At the current rate of expansion, we will be second only to Hollywood globally by the end of 2025.”

In the full Budget document, the government said it is:

“…committed to the success of creative industries, a sector that contributed £125 billion in gross value added (GVA) in 2022 and employs 2.4 million people across the UK.

“In June 2023, the government published the [creative industries] sector vision setting out ambitions to grow the sector by a further £50 billion in GVA and support an additional 1 million jobs.”

The Budget included several announcements specific to the creative industries:

Audio-visual expenditure credit for UK independent films

A new UK independent film tax credit (IFTC) will be introduced at a rate of 53% on qualifying film production expenditure. It will be available for films with budgets under £15m that meet the requirements of a new British Film Institute (BFI) test.

Films will need to meet at least one of the following conditions:

Productions will be able to make claims from 1 April 2025 if the film started principal photography from 1 April 2024.

Find more details here.

Jay Hunt, BFI chair, said:

“The government’s new tax credit is a game changer for UK filmmakers, creating jobs and ensuring great Britsh stories continue to be told. By introducing the uplifted rate, the prime minister and the chancellor are fuelling the growth of the wider screen sector that contributes billions to the UK economy.”

Ben Roberts, BFI chief executive, added:

“This is a dramatic moment for UK film, and the most significant policy intervention since the 1990s. The positive impact will be felt across our industry, and through all the new films that audiences will get to enjoy.

The films we make are vital to our culture expression and creativity – they reflect a diverse and global Britain, and build careers – and we’re grateful to government, the DCMS, the industry and our friends at Pact for working together to realise this historic initiative.”

Audio-visual expenditure credit

Following a consultation at Autumn Statement 2023, the credit rate for visual effects costs in film and high-end TV will be rise by 5% to 39% from April 2025. The 80% cap will be removed for qualifying expenditure for visual effects costs.

Film studios business rates relief

A 40% reduction on gross business rates will be provided to eligible film studios in England until 2034. The government said the relief will be implemented “as soon as possible” with bills backdated to 1 April 2024.

Tax relief for theatres, orchestras, museums, galleries and exhibitions

From 1 April 2025, the rates of theatre tax relief (TTR), orchestra tax relief (OTR) and museums and galleries exhibitions tax relief (MGETR) will be permanently set at 40% (for non-touring productions) and 45% for touring productions.

Find more details here.

National Theatre funding

Funding of £26.4m will be provided to upgrade the National Theatre’s stages and infrastructure.

General measures of interest to the creative industries

The following are announcements not specific to the creative industries but are of interest to businesses in the sector.

National insurance cut for self-employed

Freelancers make up a third of the creative industries so this measure is very relevant to the sector.

From 6 April 2024, the main rate of Class 4 National Insurance Contributions (NICs) for the self-employed will be reduced from 9% to 6%.

The government claimed that combined with the abolition of the requirement to pay Class 2 NICs announced in the 2023 Autumn Statement, the measure will save an average self-employed person on £28,000 around £650 a year.

National insurance cut for employees

From 6 April 2024, the main rate of employee NICs will be cut by 2p from 10% to 8%.

The government claimed that combined with the 2p cut announced at Autumn Statement 2023, the measure will save the average worker on £35,400 over £900 a year.

VAT threshold increase

The level at which businesses must register for valued added tax (VAT) will increase from £85,000 to £90,000 from 1 April 2024. The government said around 28,000 businesses will benefit in 2024-25 from no longer being VAT registered.

The deregistration threshold, at which businesses can deregister from VAT, will increase from £83,000 to £88,000.

Recovery Loan Scheme extended

The government’s Recovery Loan Scheme, which launched in 2021 to support businesses to recover from the impact of the COVID-19 pandemic, will be extended to 31 March 2026. It will be renamed the Growth Guarantee Scheme.

The government guarantees to the lender up of 70% of funding provided to businesses through the scheme. Loans of up to £2m are available for businesses in Great Britain turning over up to £45m. For Northern Ireland businesses, the maximum loan is £1m.

Full expensing

Full expensing allows companies to claim 100% capital allowances on qualifying plant and machinery investments. In the 2024 Budget, the government said it will publish draft legislation and seek to extend the scheme to assets for leasing “when fiscal conditions allow”.

 

Bristol-based communications and marketing firm Purplefish has become employee owned. Joanna Randall, who formed the award-winning business in 2012. has sold 100% of shares to the new trust.

The Living Wage business, located in Bristol’s creative business community at Paintworks, was awarded B Corporation certification two years ago and becomes the first PR agency in Bristol to make the transition to employee ownership.

As part of the transition, a new board has been appointed and Joanna Randall will remain an active executive board director of the business which sees associate director Lucy McKerron promoted to the role of managing director. They are joined by two employee trustee directors, senior account manager Jonathan Adams and account manager Zoë Fawcett.

Working across technology, property and leisure sectors across the South West, nationally and internationally, the business joins the ranks of a growing number of UK businesses making the move to employee ownership.

As an employee-owned business, the team will have greater input into the running of the business and its future, benefiting from a share of the profits.

The company is also celebrating a clutch of new client wins in recent months including experience business Yuup and agency collective firm Istoria.

The move is celebrated with a new website for the business which reflects the value of harnessing emerging and generative AI technologies while maintaining a human-centric approach to communications and marketing.

Commenting on the move, Randall said: “This is a really exciting time for the business. As a sole owner and shareholder it can often be an isolated role so I’m really looking forward to being part of the new management team in defining our future direction.

“I believe our traditional business structures are becoming outdated where companies are run for the sole benefit of owners and shareholders – employee ownership offers a more authentic way of running a business where commercial growth is still a focus but the benefits can be shared more equitably.”

New managing director Lucy McKerron said of her new role and the future direction for Purplefish: “I’m incredibly excited to be stepping into the role of Managing Director here a Purplefish, an agency I’ve come to know so well and love in the last two years since joining the team. The business is perfectly aligned with my personal values of integrity, creativity, and compassion, providing rewarding work for both myself and the wider team – something which will only be emphasised as we move into our EOT model.

“I’m looking forward to continuing to innovate as a business, both for our existing and new clients as we grow and evolve. We’re committed to leaning into the opportunities emerging technologies can bring while maintaining our human-centric approach to creativity, our connection to the issues that matter, while continuing to help our clients stand out and thrive.”

We are excited to share the news that Aimee Talbot will be taking on the newly created role at Varn, Head of Innovation.

As we start to see AI technologies transforming how we all live and work, it’s vital to acknowledge that the landscape of search and SEO will be impacted and will constantly be evolving. We wanted to ensure that Varn remains at the forefront of what’s ahead for our industry and for our clients. This new in-house role is designed to help us and our clients to stay ahead of the AI & innovation curve.

We asked Aimee a few questions, so that we can share what her new role will focus on, and to explore how this will help Varn to shape the future success of our clients. From understanding what’s next, as well as the need to adopt new tools, techniques & processes in order to have visibility online, Aimee shares her thoughts as Varn’s new Head of Innovation…

Question: Can you tell us a bit about your new role at Varn as Head of Innovation?

Absolutely! I’m so excited by my new role, which came about as a result of the many recent developments in search. I’ve been working at Varn heading up the Technical SEO team for over a decade now, during which time SEO has evolved considerably. Some of the more significant transformations in SEO have taken place over the past three or four years, necessitating extensive research and ongoing training in order to stay abreast of industry developments. With the emergence of Google SGE, and an increasing focus being placed on AI, a role dedicated to this innovation in search became imperative. With almost 15 years of experience in Technical SEO and a passion for all things Varn, I was thrilled to be offered this new responsibility.

The role of Head of Innovation at Varn aligns with a fundamental objective outlined in the Varn Vision Statement, emphasising our commitment to spearheading advancements in search technology and leading search innovation. Alongside the introduction of this pivotal role and ongoing efforts to build an internal team dedicated to innovation, we are strategically directing our resources towards four key pillars within this workspace, steadfastly maintaining our focus on these aspects throughout 2024. These main pillars of innovation include the following:

1. Search Innovation: The face of search is ever-developing and has been for many years – but with AI becoming a key driver behind search algorithms and generative search results starting to appear, we’re expecting to see many more changes throughout Search Engine Results Pages in the coming months. Our commitment lies in staying ahead of these forthcoming changes to SERPs. By gaining a profound understanding of these developments, we can strategically assess their potential impact on Google search results and, consequently, on our clients. This proactive approach enables us to align client websites with the latest search advancements and critical ranking factors, ensuring their compliance and optimising their performance in the evolving digital landscape.

2. Technical SEO Innovation: A vital part of our innovation initiative involves the enhancement of our Technical SEO service offerings, internal tools, and the ongoing development of our incredibly talented Tech SEO team. For instance, our commitment to excellence is exemplified through our tailored SEO audits. These audits are meticulously crafted to form a comprehensive search strategy for each of our clients. In alignment with the latest trends in SEO, we consistently refine and expand these audits, allowing us to remain abreast of the latest developments, and promptly adapt to any changes in the dynamic landscape of search engine optimisation – for instance, we have recently added sections to these audits for AI, web accessibility, and more.

3. Market Innovation: Another key focus for the innovation team lies within the wider digital marketing landscape. As an example, we are currently researching and developing new PPC scripts to help our Paid Search team surface additional data from PMAX campaigns. We are also researching and training in new market developments pertaining to automation, AI, machine learning(ML), natural language processing, LLMs and generative AI, to name just a few areas.

4. Ways of Working Innovation: We are continuing to develop our own Python scripts and GPTs here at Varn, in order to streamline and automate internal processes – and not just for small sites that are relatively easy to crawl, we also work with clients whose websites contain 100,000+ pages. This strategic automation empowers our team to allocate more time to SEO tasks demanding a nuanced, manual approach. Simultaneously, we are crafting a suite of internal tools that conduct automated reviews of key SEO elements. These tools are meticulously designed upon a bespoke knowledge base, granting us full control over their analytical processes and scoring mechanisms. Leveraging our extensive expertise, we can evaluate critical SEO factors, expediting data collection without compromising on the quality and depth of insights. This dual approach ensures efficiency without impacting the integrity and inherent value of our insights and experiences.

Question: Why is keeping ahead of innovation in SEO and search so vital?

Remaining at the forefront of industry trends and embracing state-of-the-art technologies is imperative in the world of SEO, particularly in light of recent advancements. With global internet access reaching unprecedented levels, it is prudent to capitalise on this expansive audience potential by leveraging the opportunities presented through search. According to DemandSage, there are currently over 5.3 billion internet users throughout the world (more than 65% of the world’s population) – this number is expected to reach 6.54 billion by 2025. Therefore, expanding your outreach to encompass online users presents a significant opportunity for substantial growth in your potential audience. Remaining at the forefront of search innovation is crucial in unlocking access to this audience, as it plays a pivotal role in sustaining and optimising online rankings and visibility, and is a key part of outperforming your competition.

At Varn, we are passionate about the work that we do, and about delivering results for our clients. By consistently staying ahead of the curve and staying abreast of evolving search trends and patterns, we can expertly craft customised SEO strategies for our clients, ensuring successful and measurable outcomes.

Question: What are some of the key developments you think clients need to be keeping an eye on and why?

One of the main updates our innovation team are currently focusing on is the development of Google SGE. We have been researching and testing SGE since mid-2023, in order to understand how it works, and how it might impact search results. SGE has been in beta testing since May 2023 and has been live in the U.S. since last August. It isn’t yet live in the UK, although it is expected to be launched here at some point in 2024. This is something we’re really going to be spending a lot of time looking into, and a development that we recommend all clients monitor, as this will undoubtedly change the face of search.

SGE is poised not only to significantly influence the visual landscape of SERPs but also to revolutionise the approach to content creation and optimisation for SEO. The emergence of AI-generated results seems to be pushing traditional organic rankings down these results pages, occupying more prominent space and thereby impacting organic impressions and click-through rates. Acknowledging the transformative impact of SGE, we are investing significant time and effort to fully understand its implications for both current and future clients. Our primary objective is to tailor and adjust our SEO strategies, ensuring clients can optimise their visibility within the dynamic and evolving SGE landscape.

There are a number of key SEO areas related to SGE that I would recommend placing focus on this year, in order to help you stay ahead of the curve. Here’s a sneak peak into the areas I would suggest prioritising over the coming months:

Aside from SGE, AI in general is another key area we all need to monitor throughout 2024. I posted a blog back in November about AI and the future of search, which is worth a read. We are also expecting to see key developments this year in Sustainability, and even more demand on GPTs – Not only out of the box GPTs such as Bard and Chat GPT, but also custom GPTs built on a bespoke knowledge base.

As part of our innovation goals and research efforts, we plan to keep clients and followers in the loop in regards to our latest discoveries. You can keep up to date with our latest innovation developments and find out more about what we’re working on by checking out the Varn Insights and by signing up to our monthly newsletter.

If you have any questions or concerns about innovation developments, or have a topic you think we should dive into as part of our innovation efforts, we would love to hear from you.

Google’s Search Generative Experience (SGE) transforms users’ search experience through generative AI. SGE enables users to ask more detailed questions in search, receive concise summaries of their queries, and have the option to engage in conversational follow-up queries. Currently, SGE is still in Beta and is being rolled out in multiple countries through Google Search Labs.

This article will look at how SGE is trained, focusing mainly on Google’s “Generative Summaries for Search Results” patent. This patent appears to describe the underpinning of  SGE and provides insights into how it works.

How is Google’s SGE trained?

Google’s SGE is trained on several large language models (LLMs) and has also been specifically trained for search-related tasks. For instance, identifying high-quality web results with associated sources that confirm the information provided in the output. These models work alongside Google’s core ranking systems to deliver helpful and reliable results that are relevant to search-user queries.

What are LLMs?

LLMs are machine learning (ML) models that excel at understanding and generating human language. LLMs are something that people have now become accustomed to interacting with on a day-to-day basis. Key examples include Chat GPT and Google’s Bard, which are underpinned by powerful LLMs.

LLMs are a form of Generative AI, meaning the AI model can generate something new. They can perform numerous tasks, including summarising, translating, and rendering text.

An LLM is made up of three key components: data, architecture (a neural network transformer) and training. The transformer architecture allows the model to handle data sequences, for example, lines of code or text sentences. Training is where the model learns to predict the next word in a sentence. The model will keep iterating and improving its predictions until it is reliable for generating sentences. Fine-tuning an LLM allows the model to excel at a specific task.

LLMs learn about patterns and language from the extensive data sets they are trained on. They can then create outputs for inputs. For instance, if we give it a string of text “can’t judge a book by its”, it will predict the next word and likely output “cover”.

What LLMs underpin Google’s SGE?

SGE utilises a number of LLMs, including an advanced version of Multitask Unified Model (MUM), PaLM2, LaMDA and more. All of the LLMs are trained on vast amounts of data. Google uses multiple LLMs in SGE as it enables them to fine-tune the models to users’ unique needs, enhancing the search experience.

Google’s Multitask Unified Model (MUM) has been trained across 75 languages and has already been deployed on Google Search to improve the search experience. For instance, this model has been used to identify related topics in video content even when the topics aren’t directly mentioned.

PaLM 2 is a language model that excels in multilingualism, reasoning and coding. This is because it is trained heavily on multilingual text, large numbers of scientific pages containing mathematical expressions, and many publicly available source code datasets. Like all the others, this model is not limited to use in SGE. Google has also employed this LLM in Bard to enhance its language capabilities.

SGE is also employing Gemini to make it faster for users. Gemini was announced at the end of 2023 and is natively multimodal. Multimodal AI means it can understand and generate data across various modalities, including text, imagery and audio. Google noted they achieved a 40% reduction in latency for users in SGE.

What does the US11769017B1 Patent mean for Google’s SGE?

The patent filed by Google in March 2023, named “Generative summaries for search results” was approved on the 26th of September 2023. It appears to be the patent underpinning Google’s SGE. This patent details an approach to using large language models (LLMs) to generate a natural language (NL) summary in response to a query. Meaning that the summaries are created in a way that is easy for a user to understand. The processes outlined in the patent are key to SGE. It covers not only how LLMs are utilised, but also where information could be pulled from to generate these NL summaries.

The patent also outlines how additional context will be considered for each query. This means there will be variability depending on the specific way a query is submitted or the context in which it’s asked. This explains why so many people researching and collecting data on SGE are finding so much variability in what shows up for them on different days or locations.

Additional information stated in the patent that could be utilised: 

Can SGE be Wrong or Biased?

Google has stated that SGE may have knowledge gaps in certain areas and has, therefore, been designed only sometimes to produce a result if it concludes that it needs more knowledge to answer the query confidently.

Additionally, the patent describes a system where the generated summaries will be evaluated based on the probability that they are both reliable and accurate. Confidence measures will be used to assess the natural language summaries to determine whether or not to produce a summary for a specific query. For instance, Figure 2 from the patent outlines the method and illustrates how confidence measures are implemented.

Furthermore, it is essential to recognise bias when it comes to generative AI. Google has acknowledged that SGE could produce biassed results. Google have stated the following:

“The data that SGE is trained on is based on high-quality web extracted data that can exhibit narrow representations of people or potentially negative contextual associations.” – Google

Google has implemented multiple measures to try to mitigate biased results. For instance, they use adversarial testing in SGE. Adversarial testing “involves proactively trying to “break” an application by providing it with data most likely to elicit problematic output.” (Google). This aims to identify bias and safety concerns in the model and use this information to improve the model.

Wrap Up

The SGE Google experiment is an exciting time for generative AI and SEO. At Varn we are constantly monitoring and testing the updates to SGE to ensure our clients can appear within AI generated results. We have recently looked at the overlap between SGE and organic search results and we are continuing to collect and analyse data as SGE evolves.

If you have any questions about SGE, how it works and how it appears to be impacting SEO, please get in touch with the SEO Experts at Varn. We would love to hear from you.

It has been a big year for artificial intelligence; so much so that Collins Dictionary made AI the most notable word of 2023

AI has actually been around for several decades, but since ChatGPT burst on the scene in November 2022 it has been a huge global topic of conversation.

Developments in the technology are moving fast and businesses around the world are using AI tools for various tasks. But there are also ethical concerns around bias, privacy, plagiarism and accuracy. And what does it mean for sectors like ours which has a big focus on human creativity?

Dan Martin asked members of Bristol Creative Industries to tell us how they are using AI, the tools that are most useful, any concerns they have about the technology and what impact they think it will have on the creative industries. 


“In the field of design, AI has emerged not as a threat but as a formidable ally. It serves as a creative collaborator, an ever-available helping hand that can assist designers in unleashing their true potential and the potential of their ideas.

“AI algorithms can analyse vast datasets, identify trends, and provide inspiration that might have eluded humans. It extends the possibilities of what we can create, helping us push the boundaries of design. However, it’s crucial to recognise that AI doesn’t replace creativity – it’s an enhancer – part of a unique and collaborative team that will do great things together.

“As we embrace AI in design, we must tread carefully regarding ethics. AI’s capacity to mimic styles, artists, and writers raises important questions about originality, plagiarism, and intellectual property.

“We must recognise the ethical implications of using AI and we should establish guidelines and standards to ensure AI is directed fairly and honestly to constantly check ourselves and each other, always questioning the work we produce. Integrating AI into agencies is inevitable and holds tremendous promise. When used with integrity, it is a transformative force that can elevate our creativity, efficiency, and impact.

AI tools we use regularly include Chat GPT, Midjourney, Dalle and Vizcom. We are currently looking for the best opportunities to use Loops and Boords.

Ryan Wills, Taxi Studio
View Taxi Studio’s BCI profile


“There is one tool that is showing promise and potential; Claude. We’re finding it more of a helpful tool than say ChatGPT because it allows you to attach files. It’s also good for breaking up documents and summarising. It’s in beta, so it’s pretty rough and ready, but we’ve done things like ask it to create shot lists from video storyboards and it does a fairly good first job.

Dalle3 has been put into Bing, and that’s a fun tool. It can create nice pictures in just one prompt. It’s been handy for stock image creation, but it’s limited. For example, it can’t create anything beyond a 1×1 ratio.

“Whereas Midjourney is a much more powerful image generator, but you’ve got to put a lot more into the prompts and variance tweaking. They are interesting, but I don’t see them replacing a creative function. You still need the creative vision to make them work.

“As an agency, we’re carefully exploring the risks and ethics of such tools in our sector. The Daily Telegraph and The Guardian are two examples where a cautious approach to AI is being taken and we anticipate that other publishers will follow suit. The Daily Telegraph has recently issued guidelines to staff prohibiting publishing AI-generated text except in limited cases with legal approval and The Guardian is vying to maintain transparency around human-produced journalism.

“We’re mindful that we’re still in the infancy of AI and advancement is bubbling away. As they stand, they’re not replacing anything or anyone, more that they are a string to the bow. It still feels like there’s a long way to go with AI tools but we’re excited to see what’s to come.”

Sarah Woodhouse, Ambitious PR
View Ambitious PR’s BCI profile


“As a video production team, we’re really receptive to AI based tools that improve our editing workflow. We were early adopters of the beta version of Adobe Premiere Pro‘s text based editing tools, which really speeds up sync selection when dealing with multiple talking heads. We also use the enhance speech function to improve audio quality when location recording sound is compromised; this has varying degrees of success, but it’s good to see the capability evolving.

“An enthusiasm for exploring AI was an important factor in hiring our two newest members of staff and we try to make time for them to try out new applications.

“So far AI has been a positive experience for us, especially where it speeds up mundane tasks. We welcome it as a tool to further human creativity rather than undermine it. However we do appreciate this may be influenced by our team members requiring multiple skills rather than focusing on a specialised area of post-production.”

Penny Beeston, Beeston Media
View Beeston Media’s BCI profile


“We want to position AI as a complementary tool, rather than a replacement for strategic communications and copywriting. We are using specialist applications like Jasper and ChatGPT to add speed and scale to parts of the content creation process. We’ve focused this year on building our own internal experience and knowledge but there have already been a few projects where we have been able to show our expertise.

“Generative AI is like having a really inexperienced intern. It needs to be provided with the right information, instructions and tasks to get the best results. And because its responses are based on already existing content, the answers AI provides are always generic. While it might give us a starting point to add our own creative and strategic thinking to – it is nowhere near being able to create something we’d be happy to send to clients.

“As an agency and an industry, we must make sure this technology doesn’t replace actual human interns. That’s why we are continuing to take on interns from local universities next year. We want to help people gain the experience they need to build rewarding careers in the creative industries.

Darren Clare, Stratton Craig
View Stratton Craig’s BCI profile here


“Generative AI has felt a bit like discovering the internet for the first time; it truly is magic. When it comes to the practical business benefits, it has started to automate some simple tasks. We can edit podcast episodes and the accompanying social clips easily on Riverside.fm, do some image manipulation and we’ve started to experiment with its ability to write social media posts.

“There’s likely to be a big opportunity for creative businesses, if you embrace what’s possible and think about how it’s going to impact the way you work. We just need to be careful that we’re still supporting the development of people joining the industry — it’s the tasks they do that are being taken over — and that marketing focuses on quality and community. There’s going to be a lot more content created, so you’ll need to work harder to stand out!”

Chris Goodfellow, Inkwell
View Inkwell’s BCI profile here


We recognise that the pace of change of technology is accelerating exponentially. By becoming comfortable with that and working within guardrails that support this change, we can identify and take advantage of areas of opportunity for our clients as well as for our own business.

With a focus on human centricity, our strategy is broken down into a couple of key areas. It all starts with open dialogue and conversation, from board level and across the organisation. We have AI champions from each part of our business, who are busy identifying the key challenges and opportunities within their own specialisms, from motion to finance. This allows the prioritisation for areas of focus, so that new tools that may not be in use already can be tested.

“We’re also putting in place a clear vision statement that aims to set boundaries within which innovation can flourish. For any concerns that may arise when using a tool, we’re setting up a bias council, so that these can be raised and explored to avoid the discrimination.”

Emma Bass, Six
View Six’s BCI profile here


“I think it would be foolish for us to deny the potential held by artificial intelligence. When it comes to research, data collection, analysis and reporting etc, AI tools are brimming with potential. They’ve certainly helped us streamline processes and massively improve overall efficiency.

“However, there are certain processes that simply cannot (at the moment), and should not, be replicated by computers.

“Be it copywriting, content creation, web design or strategy, we strongly believe in the value of creative human input across all our work. AI is unable to capture the essence of brands, clients and individuals, no matter how hard it tries.

“Yes, these tools will continue to evolve and improve, but our focus will remain on the knowledge and experience of people, not machines. They’ll help our people be more productive and reduce time spent on monotonous tasks but they lack that spontaneous and creative flare.

In terms of tools we use, it’s all ChatGPT at the moment. The plan is to create unique GPT models catered to all of our clients and work types. This will allow us to train models based on client-specific documentation like style guides, landing pages and SEO best-practice docs.

“We have previously been combining third-party plugins, such as Browser OP and Webpilot, with specifically engineered prompts. As GPT is improving at a rapid pace though, third party browser plug-ins are becoming less important and these features are becoming native within GPT.”

Paul Morris, Superb Digital
View Superb Digital’s BCI profile here


“AI cannot innovate, only replicate – at least in its current form. AI tools like the infamous ChatGPT are able to create things based on existing data that they have been shown. This inability to produce something from nothing, or to create an entirely new direction for a web service like development or design, means it is unlikely to serve a threat to the industry.

“That doesn’t mean we shouldn’t use it, however. AI is an incredibly useful tool in oiling up the creative process, making certain aspects like research and insights go much faster. However, it probably won’t replace traditional creative practices for companies that want something bespoke.

“For web design, and websites in general, most organisations want to speak to humans. That’s because they’re led by humans, and the services they offer are invariably for humans. This common factor means that human-led design is the most logical thing to do, both now and in the future.

“There will be organisations that embrace AI to the extremes, even creating full AI websites. The impact of this is most likely to be seen in entry level projects for people that want a site quickly such start-ups.

“There are indications that Google penalises websites that utilise full AI content. Furthermore, as AI is in its infancy, we’ve yet to see how it will evolve both legally and functionally – restrictions on things like use of content and copyright laws could come into play down the line.

“For now, it’s best to think about the good that comes from AI – the speedy research, the ideas generation, and the surface-level insight into a topic – rather than assume it’ll replace jobs or the creative industry as a whole.”

Nick Bird, Squarebird
View Squarebird’s BCI profile here


“We have integrated many video production based workflow enhancements using various AI tools, and have regular meetings to discuss its wider impact. Many conversations conclude with, “It’s good, but not great, and not yet ready” or “It feels like AI” etc, but the fact is that with AI’s exponential growth curve, it will be ready and soon!

“The level of disruption AI poses to business is both exhilarating and overwhelming, and we’re hoping that the benefits will balance the effort, money and time it takes to stay up to date with fast paced change, to test what’s right for each business and to integrate it successfully into better workflows.”

Sam Hearn, Omni Productions
View Omni Productions’ BCI profile


“AI in one form or another is used pretty frequently to support our team. I use the word ‘support’ intentionally.

“ChatGPT came with a lot of hype, but after the initial novelty wore off, we found that the majority of use-cases are typically rephrasing meeting notes or making email notes more concise – though creating approaches and frameworks for ideas has been more valuable.

Voice AI is looking promising as a low-cost solution for social media assets, though it certainly doesn’t replace a voice over artist (yet). Again something we are experimenting with and will likely make more use of in the near future.

“Text-to-image tools are interesting. Photoshop has some half-decent inbuilt generative tools now, but in more powerful scenarios we’ve been able to build environments using MidJourney to support our creative. Notice the use of ‘support’ again? It’s not perfect, but it does help rule out what’s not working.

“Finally, and perhaps the most unusual use for us so far, was collaboratively working to set up an online chat-game for Conan the Barbarian. We worked in partnership with a text prompt engineer to craft a framework for a text based adventure game called ‘Tavern of Treachery’. Reviewed by PC Gamer, the campaign ran for the first two weeks of launch and generated over 3,000 unique AI encounters with Conan.”

Rich Williams, Something Familiar
View Something Familiar’s BCI profile here


“Like many teams, we used AI before ChatGPT burst onto the scene. Spending time on it has helped us find ways to bolster our work. Some of these findings will be shared in the chapter of a book called #PRStack, which is due out later this month.

“In our team meetings, AI chatbots record discussions and outline actions. A close friend’s creation, parker.ai, promises to enhance this.

“We’re also looking at how AI can manage tasks like analysing engagement feedback efficiently, allowing us to dedicate more time to strategic, high-value work.

“There’s no doubt it’s a game-changer, but I’m apprehensive about two things and irritated by a third.

“Firstly, like with social media, I worry that optimism bias will stop us from collectively recognising the potential for bad actors to wreak terrible harm. There is an important role for regulators here to ensure the right controls are in place.

“My second fear is that we fail to grasp the opportunities AI presents.

“My third concern comes from a long-standing bugbear: that the landscape between organisations and the public becomes even more littered with bad tech ‘solutions’ (chatbots and ‘convenience’ parking, I’m looking at you).

“That’s why I’m convinced that the AI success stories will be the ones who integrate it into their work while keeping people at the heart of what they do.”

Ben Lowndes, Distinctive Communications
View Distinctive’s BCI profile here


“Performing initial discovery can be a time-consuming process, and even briefing it to someone else can seem like a chore. While it still requires a knowledgeable eye to read and verify responses, ChatGPT 3.5 has been a good tool for researching business sectors, personas, and helping to draft workflows. This has helped to cut down time on the tedious tasks in order to be able to focus on the fun ones.

“But AI isn’t a magic bullet (not yet, at least) as the results you get from these tools are only as good as the prompts you give them, much like the benefit of writing a good brief.

“Within early stage concepting especially AI assisted workflows are all about maximising your time and output. It goes without saying Photoshop’s Generative Fill has been a gamechanger – beyond that we are also using generative AI models like Stable Diffusion to help bring our ideas to life.

“The benefit of AI for people within the creative industries feels vast. For any concerns about its negative impacts, we can only look to other historical comparisons. Maybe the impact of the letterpress on calligraphy in the mid-15th century? Or the democratisation of the personal computer and home printer through the late-20th century? For now, these are all just tools and as long as we take care to use them appropriately, we can keep our excitement to use them!”

Neil Sims, Oakwood
View Oakwood’s BCI profile here


“Our first exploration of AI began with using early deepfake technology to recreate a young Ian Wright, for an Adidas 90s apparel re-launch project. AI has since become a key part of our workflow, e.g. in upscaling renders and adding in-between frames. This was essential for a 10 minute projection mapping project requiring 8K renders at 50fps, an impossible task without the AI tool Topaz Labs Video AI.

“We utilise the evolving AI features in tools such as DaVinci Resolve for tasks such as object removal, rotoscoping and denoising. We’ve enhanced efficiency and precision, making processes quicker and more streamlined.

LLMs like Bard and Chat GTP provide workflow advice on complex VFX challenges in software like Houdini, accelerating R&D and discovering more effective solutions.

“We’re also exploring AI for early-stage ideation and generating visual elements, a shift from traditional reliance on stock imagery.

“From our experience, there is no doubt AI will play a significant role in VFX and asset development. Although AI hasn’t yet perfected executing vision, its contribution to creativity and ideation is undeniable.

“Nuance, especially when iterating with clients and artists, means a production process where people have ultimate control is still essential.”

Sama Alyasiri, Nymbl
View Nymbl’s BCI profile here


“We predict that AI will be disruptive but not fatal. We have been integrating AI into our work flows in a way which benefits our clients and as our business is all about SEO, is in line with Google’s guidelines. We believe, and the results from our clients show, that the core principles of good SEO will remain the same, even if the tools we use to deliver those results will evolve.

“It’s about strategy, and how to use it. A bit like when steam engines were invented, and everyone panicked about their impact. The ones that succeeded were the ones that learnt how to use the steam engine to their benefit rather than ignore it or try and stop them. Therefore, it will not change the core pillars of SEO, but it’s a tool that can be used to assist us in helping to make our clients visible online.

“One area to keep an eye on in search marketing, is that we are noting some of the biggest visual updates to Google SERPs that we’ve seen in some time – with Google’s Generative AI-powered Search Experience (SGE). Context will be carried over from question to question, to help you more naturally continue your exploration and these AI generated search results are very different from what we’re used to seeing. We expect more growth and development within SGE, over the coming months.”

Tom Vaughton, Varn
View Varn’s BCI profile here


“We’re getting great results when it comes to brand messaging. Copywriting at the branding stage can be like picking apart a plate of tangled thoughts, ideas and content, and then putting them into a coherent order.

“AI offers us strands to pull at sooner, giving us developed phrases that we can adapt and shape and link to. Yes, most of the output is cliché or inappropriate or wildly off-tone, but it’s a much better starting point than a blank page, a blinking cursor and a looming deadline.”

Simeon de la Torre, SIM7
View SIM7’s BCI profile here


“We’ve been working on AI related-projects for our clients since 2019. We view AI integration as largely beneficial; embedding AI and machine learning in products and workflows offers advantages such as enhanced efficiency, superior decision-making, and enriched customer journeys.

“Understandably, skilled individuals across the creative industries may have concerns. Yet in my 20+ years in digital media, I’ve found new technology always requires time to find its place. I consider it a new toolkit that should ultimately liberate us to focus on the really smart stuff that relies on human creativity, curiosity, heart, soul and intuition.”

Dave Harrison, Spicerack
View Spicerack’s BCI profile here

Chancellor Jeremy Hunt delivered the government’s 2023 Autumn Statement on 22 November. Here’s a round-up of measures and announcements relevant to businesses in the creative industries.

If you’re a Bristol Creative Industries member and you’d like to share your view on Autumn Statement 2023, email Dan.

In the full Autumn Statement document released after the speech, the government says:

“The UK has world-leading creative industries at the heart of an increasingly digital world. The sector grew at over one and a half times the rate of the wider economy between 2010 and 2019,73 contributing £126 billion in GVA in 2022.

“In June 2023, the government published its sector vision which set ambitions to grow the creative industries by £50 billion and deliver a creative careers promise to support a million more jobs by 2030. This included £77 million in new government spending, bringing the total announced since the 2021 Spending Review to £310 million. The sector also continues to be supported by significant tax reliefs, which were worth £1.66 billion in the year ending 2022.”

Autumn Statement 2023 measures for creative industries

In terms of specific announcements for the creative sector, the Autumn Statement included the following:

Plans to boost tax reliefs for visual effects

In his speech, Jeremy Hunt said:

“Our creative industries already support Europe’s largest film and TV sector. This year’s all-Californian blockbuster Barbie was filmed in the constituency of the Hon Member for Watford, where the sun always shines.

“I know that even more could be invested in visual effects if we increased the generosity of the film and high-end TV tax credits, so I will today launch a call for evidence on how to make that happen.”

In the consultation document published after the speech, the chancellor says:

“I can confirm that we will provide more additional tax relief for expenditure on visual effects, to boost the international competitiveness of the UK’s offer. This call for evidence takes the first, crucial step towards this, as it will provide the government with the depth of understanding it needs to develop targeted proposals that best serve the needs of the visual effects industry.”

The call for evidence follows the announcement in the government’s March Budget that audio-visual tax reliefs are being reformed into expenditure credits with a higher rate of relief than under the current system. The new expenditure credits can be claimed from 1 January 2024.

The government is looking for comments on how the new Audio-Visual Expenditure Credit can provide more generous tax relief for visual effects by 3 January 2024.

Neil Hatton, CEO of UK Screen Alliance, said:

“Very often clients will say, ‘We love your creativity, your innovation and reliability to deliver. We love your people and we love working in the UK, but your VFX incentive doesn’t meet what is available elsewhere in the world’. Either that or, ‘We are capped out’.

“This consultation and the promise of a more competitive incentive should aim to position the UK as the first choice destination for VFX production for international film and TV. We are focused on capturing a larger market share as global demand for VFX recovers, following the US actors’ strike, and we aim to play a full part in growing the UK’s creative industries towards the government’s 2030 targets.”

Funding for film and high-end TV

The government said it will provide £2.1 million of new funding next year for the British Film Commission and the British Film Institute Certification Unit “to support the production of film and high-end TV across the UK”.

The unit certifies films, animation, television programmes and video games as British or as an official co-production in order to be eligible for the UK’s creative sector tax reliefs. The BFI has previously said that it lacks funding to adequately adminster the certification.

Review of public investment in R&D spending

The government said it will review public investment in R&D spending for the creative industries “to a Spending Review timeframe”.

Business rates

The 75% business rates relief for hospitality, retail and leisure businesses up to a rateable value of £110,000 has been extended until 2024-25, and the small business rates multiplier has been frozen at 49.9p.

The standard multiplier (paid by properties with a rateable value of £51,000 or more) will be uprated by September’s CPI next April (6.7%). This will mean an increase from 51.2p to 54.6p.

Clarifications of rules for cultural tax reliefs

At the Spring Budget, the government extended the temporary higher rates of relief of three corporation tax reliefs that are collectively known as the ‘cultural reliefs’:

In a policy paper published alongside the Autumn Statement, HM Revenue & Customs said “the government is taking the opportunity to clarify some of the relief rules, including what is eligible for relief” in order to “provide clarity to the industry and ensure the fairness and success of the cultural reliefs”.

Administrative changes to creative industry tax reliefs

In a policy paper published alongside the Autumn Statement, the government said companies claiming tax relief for films, high-end TV, animated TV, children’s TV, video games, theatrical productions, orchestral concerts and museum and gallery exhibitions will be required to complete and submit an online information form.

This include claims made for the new expenditure credits: the Audio-Visual Expenditure Credit (AVEC) and the Video Games Expenditure Credit (VGEC). It also includes the cultural tax reliefs: Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibition Tax Relief (MGETR).

The reason given is as follows:

“It is expected that these changes will streamline the process of making a claim and assist companies in transitioning to the new regimes. The completion and submission of the online information form will make it easier to tackle abuse and will reduce the administrative burden on HMRC, allowing claims to be processed faster.”

For AVEC and VGEC, the measure will take effect from 1 January 2024. For the cultural reliefs, it be introduced from 1 April 2024.

National Insurance

Freelancers make up a third of the creative industries so these measures are very relevant to the sector.

From 6 April 2024, self-employed people with profits above £12,570 will no longer be required to pay Class 2 National Insurance Contributions, while the main rate of Class 4 self-employed NICs will be cut from 9% to 8%.

The government said the changes will benefit around two million self-employed people with the average person earning £28,200 seeing a saving of £350 in 2024-25.

AI compute

Compute powers the development of AI models.

The goverment will invest £500 million in further UK based compute over the next two financial years “so that universities, scientists and start-ups have access to the compute power they need to help make the UK an AI powerhouse”. This brings the total planned investment in compute to more than £1.5 billion.

General measures of interest to the creative industries

The following are announcements not specific to the creative industries but are of interest to businesses in the sector.

Full expensing

Full expensing allows companies to claim 100% capital allowances on qualifying plant and machinery investments and write off the cost of investment in one go. For every pound a company invests, their taxes are cut by up to 25p.

The measure was due to end in March 2026 but the Autumn Statement announces that it has been made permanent.

The government said it worth over £10 billion a year and “the biggest business tax cut in modern British history”.

Late payment

Alongside the Autumn Statement, the government published the report from its Prompt Payment and Cash Flow Review.

Measures aimed at tackling the impact of late payment on small businesses include:

Funding for high growth businesses

The government will establish a Growth Fund within the British Business Bank to provide a permanent capital base of over £7 billion “to give pension funds access to investment opportunities in the UK’ s most promising businesses”.

Exentions of the British Business Bank’s Future Fund: Breakthrough programme with at least £50 million additional investment in “the UK’s most promising R&D intensive companies”.

A new Venture Capital Fellowship will be set up with the aim of “producing the next generation of world-leading investors in the UK’s renowned venture capital funds to support investment into the UK’s most innovative high-growth companies”.

A new £20 million cross-disciplinary proof-of-concept research fund to boost spin-out businesses in universities.

Research and development tax relief

The existing Research and Development Expenditure (RDEC) and SME schemes will be merged for expenditure incurred in accounting periods beginning on or after 1 April 2024. The notional tax rate applied to loss-makers in the merged scheme will be lowered from 25%
as per the current RDEC scheme, to 19%.

The intensity threshold in the additional support for R&D intensive loss-making SMEs will be reduced from 40% to 30%, which the government says brings around 5,000 more R&D intensive SMEs into scope of the relief.

A one year grace period will be introduced so that companies that dip under the 30% qualifying R&D expenditure threshold will continue to receive relief for one year.

National Living Wage and National Minimum Wage

From April 2024, the National Living Wage (NLW) will increase by 9.8% to £11.44 with the age threshold lowered from 23 to 21 years old. The government said it represents a rise of over £1,800 to the annual earnings of a full-time worker on the NLW.

There are also changes in the National Minimum Wage:

National Minimum Wage 2024

It’s no secret that the digital world has a considerable environmental footprint, rivalling that of the aviation industry. Local digital agency Torchbox has embarked on a journey to quantify its Scope 3 emissions, in particular in relation to the carbon footprint of the websites they build and manage. 

 

Drawing insights from projects like Thoughtworks’ Cloud Carbon Footprint and the Green Software Foundation’s Software Carbon Intensity specification, Torchbox has crafted a bespoke approach to address this complex issue.

Their Hosting Infrastructure Methodology provides detailed insights into emissions from website hosting and the Sustainable Web Design Methodology casts a wider net, estimating emissions linked to overall website use.

Exploring digital emissions while deepdiving into Scope 3 led to some interesting debate about what should be included within Scope 3 when it comes to the hosting of clients’ websites with hosting partners. 

Informed by the GHG guidance Torchbox decided to include these emissions using the Hosting Infrastructure methodology as part of their Scope 3, even though the clients are the primary owners. The GHG Protocol encourages this double counting so that more parties are focused on driving reductions.

Measurement models will evolve and new standards will emerge but, for now, this approach provides Torchbox with what it needs to start a reduction programme. And, they can report an accurate picture of hosting emissions for their clients’ carbon footprints

You can download Torchbox’s Digital Emissions Methodologies. Feedback is not just welcomed; it’s encouraged as they are keen to engage in ongoing dialogue, to continue to refine and enhance their approach.