Let’s not sugarcoat this: Artificial Intelligence isn’t just coming for agencies—it’s already here, and it’s my belief it’s going to eliminate entire categories of jobs and revenue streams agencies have long relied on.
A common and reassuring narrative has emerged in the marketing and advertising industry: AI won’t take our jobs, it will simply make them easier. This sentiment, however, fails to grasp the full scope of what’s coming. While it’s true that AI is currently a powerful tool for automating repetitive tasks, the fundamental misunderstanding lies in underestimating its future capabilities.
Given everything that’s going on in the world, and the sweeping changes we’re seeing in the marketing and advertising landscape, it’s conceivable we’ve convinced ourselves we’re now ready for (almost) anything.
But we’re not talking about AI as a helpful assistant—we’re talking about a technology that is rapidly learning to handle the very creative and strategic functions we have long regarded as uniquely human. This is less of a gentle tide, and more of a looming tsunami, and many people are still relaxing on the beach, unaware of the immense force that is about to engulf them.
As AI tools begin to automate and optimize campaign elements that were once labour-intensive and costly, brands are already finding they can achieve similar—even superior—results with less human effort and, consequently, lower agency fees.
I believe this will lead to an increasing trend of marketing budgets being re-evaluated, as a portion of the funds previously earmarked for agency creative and administrative services will either be re-invested into AI-driven initiatives, or simply pulled back into the company.
The agency model is collapsing
The traditional agency structure—bloated teams, slow processes, and monthly retainers—is no longer just unsustainable, it’s obsolete. When AI can deliver much of the same output in seconds, why would a client tolerate a six-week production timeline and a six-figure invoice?
Marketing and procurement teams aren’t just sniffing around for cheaper options. They’re now demanding AI-enhanced efficiencies because they know what’s possible. And clients, facing their own economic pressures, will inevitably gravitate towards these more efficient and cost-effective solutions.
Remember, this is just the beginning, and the pace of AI development is staggering. AI is now dismantling the very foundation of how agencies work, from the bottom up and the top down. What seemed like science-fiction just a few years ago is already reality, and that’s bad news for the entire agency value chain. All of which means that those agencies relying on large teams of specialists performing automatable functions will see their cost structures and profitability crushed.
Automation of job functions
We’re already seeing AI tools automate repetitive tasks, streamline workflows, and analyze vast amounts of data with unparalleled speed and accuracy. From programmatic ad buying to media planning, and even initial creative concepts, AI is taking over. This isn’t just about efficiency, but the very nature of work itself.
Account and project management, too, are not immune. AI-powered CRM systems and communication tools can automate client reporting, track project progress, and even anticipate client needs based on historical data. While the human touch will always be important in building relationships, the administrative burden on account teams will almost certainly shrink.
Even seemingly “safe” administrative roles are at risk. AI-powered chatbots can handle routine client inquiries, and intelligent automation can manage invoicing, scheduling, and other operational tasks. The need for large back-office teams will diminish as AI takes over these functions with greater efficiency and lower cost.
But creative is OK, right?
This is where many agencies feel the most secure—clinging to the belief that creativity is the last bastion of human ingenuity. While truly groundbreaking, emotionally resonant creative work may still require human insight for the foreseeable future, a significant portion of creative development is also becoming increasingly susceptible to AI.
AI tools are transforming creative fields like copywriting and visual content creation. These tools can generate ad copy and website content with lightning speed, and while the initial output may lack human nuance, they are rapidly improving, offering way faster, more cost-effective solutions for routine tasks.
Similarly, AI image generators can create stunning visuals from text prompts, significantly reducing the time and cost associated with graphic design and photography. Even in ideation and concept development, AI can analyze trends and generate creative concepts, augmenting the human creative process and reducing the need for traditional brainstorming teams.
Production streamlining
Production, often a complex and costly aspect of agency work, is ripe for AI-driven disruption. Video editing software with AI capabilities can automate tasks like scene detection, audio syncing, and even basic color correction. I’ve been messing about with Google’s Veo3, in which you just describe video content you want to create, and it’s eye-poppingly good.
In the realm of web development and coding, AI tools are emerging that can generate code based on design specifications, potentially reducing the need for large teams of developers for certain types of projects.
The path forward
So, is it all doom and gloom?
Not if agencies can evolve to become smarter, more nimble, and more business savvy. But agencies need to wake up from their deck chairs on the beach and run like hell from the AI tsunami that is hurtling towards them.
And I’m not talking about investing in AI.
It’s my belief advertising and media agencies should be wary of dedicating significant resources to developing their own proprietary AI technologies. That’s like trying to win an arm-wrestling contest against a T-Rex. It’ll be a noble effort, but they’re probably just going to end up as a snack.
The cold truth is that the financial fire and brain power required to build foundational AI models is a domain dominated by a handful of tech giants – Amazon, Apple, Google, Meta, and Microsoft. These companies have a near-monopoly on data, computational muscle, and geniuses who speak in Python and think in algorithms. Trying to compete with this kind of power is a costly and distracting bet that likely won’t ever pay off.
So instead of getting eaten in a pointless tech war, agencies need to recognize where their true superpowers lie. In my view, survival in this new era requires a radical transformation in how they operate:
- Hire different. Think different.
Start hiring AI-literate strategists, data-savvy creatives, prompt engineers, and business generalists who can connect the strategic dots. The future isn’t about departments—it’s about hybrid thinkers who know how to move fast and adapt faster. We need people who are as comfortable analyzing data as they are telling a compelling story.
- Move Up The Value Chain
The rigid, hierarchical structures of many traditional agencies are ill-suited to the speed and fluidity of the AI-powered future. Agencies must transform from service providers into agile strategic partners who understand their clients’ businesses so well they can become indispensable drivers of growth. It’s an evolution that requires developing a culture of continuous learning and adaptation, moving beyond rigid hierarchies to embrace fluid, iterative approaches.
3. Rethink Pricing Models
Time-and-materials is a dead model. Agencies must price based on outcomes, impact, and speed. If a campaign delivers results in days instead of months, why should you get paid less? That’s going to be a hard concept for marketers to wrap their heads around, but it’s not impossible.
- Double Down On Strategic Creativity
This isn’t about augmentation anymore. It’s automation. The “creative process” is no longer sacred, it’s scalable. Creativity isn’t dead, but it’s no longer confined to copy design or digital. It’s in how agencies solve business problems, use data, automate at scale, and invent new models. Creativity now lives in the thinking, not just the assets.
- Focus on Uniquely Human Skills
While AI will automate many tasks, it will also free up human talent to focus on uniquely human skills that are harder to replicate. This includes strategic thinking, complex problem-solving, emotional intelligence, creativity that pushes boundaries, and the ability to build strong, trust-based relationships with clients. Agencies must invest in developing these skills within their teams
- Embrace AI as a Partner
Instead of viewing AI as a threat, agencies need to embrace it as a powerful tool that can augment their capabilities, improve efficiency, and unlock new possibilities. This means investing in AI training for their teams, integrating AI-powered tools into their workflows, and developing new service offerings that leverage the power of AI.
The Harsh Truth
AI doesn’t hate agencies. It just looked at the traditional model, and, with cold digital logic, asked “Why?”
In my view, some agencies won’t make it. They’ll be the ones still clutching their awards and their big idea manifestos while AI-powered competitors are already at the finish line, having delivered the same campaign in 20 minutes for one tenth of the price.
The agencies that survive won’t be the biggest, flashiest, or most award-winning. They’ll be the ones who stopped trying to impress their peers and started focusing on making their clients money.
So, the future of agencies isn’t just different. It’s brutally efficient, ruthlessly intelligent, and deeply uncomfortable for those unwilling to evolve.
Your choice: Evolve, or start practicing your barista skills.
This article first appeared in Campaign Canada