The Agency of the Future is AI-infused

When I joined the marketing agency world in 1994, I was enamored by the energy, big brands, and happy hours. Back then, being part of a larger agency was fun, and client dollars seemed to flow freely. In the past thirty years, the ground has shifted, and owning (let alone working at) an agency is deeply challenging, and the fun is more difficult to find. Two recessions, COVID and AI, have left scars, but also plenty of opportunities for career agency professionals. Let’s explore those opportunities.

Accepting Challenges

One of the most concerning trends I noticed in the past decade, when running my own agency and talking to other agency owners in the NextNW Agency Owners’ Roundtable, was the shift in client mindset about agency relationships. The nature of client relationships has organically evolved to be more transactional (project-based). This shift also created a price sensitivity to marketing services we hadn’t seen in previous decades. The price compression from more competition on projects, combined with increases in employee costs (particularly healthcare), has resulted in significant declines in margins.

To further exacerbate the situation, mid-sized agencies started to see competition from larger consulting firms and agencies during COVID. More recently, those same mid-sized agencies now face fierce competition from freelancers and contractors, bolstered by AI tools that function as a force multiplier. Finally, the agency world has had to adjust to the hybrid and remote workforce, economic uncertainty, complexity of globalization, and political polarization.

While no business is immune to these current trends, agencies are often the canary in the coal mine, as the first to get “cut” and the last to get rehired by cost-conscious clients. So, what can agency owners and executives do to mitigate these troubling trends? I’ve outlined six opportunities to create the agency of the future. There is no reason to survive when you can thrive. Let’s get started.

Defined Leadership

While I’ve written extensively about agency leadership best practices over the years, I can summarize my recommendation for leadership lessons for 2026 and beyond in brief. The first step is understanding leadership’s unique abilities and combining that with their industry knowledge, experience, passion, and personal and professional goals. The sweet spot in the middle of those elements is where each leader is most likely to thrive. The next step is to clearly define each role and measure value or contribution based on associated key performance indicators (KPIs).

Don’t forget to revisit the KPIs regularly (quarterly or annually) and adjust performance, pay, or equity, as needed. Regardless of role, leaders should develop and hone their emotional quotient (EQ) to maximize team engagement and productivity, as IQ doesn’t correlate to success, in my experience. Lastly, consider “twinning” leadership’s essential knowledge, experience, and personality. This allows team members and partners to “tap” AI-powered twins when members of the leadership team are not available.

Lean Structure

Agencies of the past were measured by revenue, employee headcount, office size, and perks. Agencies of the future will be measured by the efficiency and engagement of their team, the ability to leverage global resources as well as intelligent tools to maximize profitability. Research shows that teams gathering in-office or in a hybrid work environment are more effective than fully remote teams. Regardless, keeping these teams engaged while being remote is a challenge that requires discipline and intention.

The agency of the future will also be global in nature, leveraging talent residing offshore, nearshore, contractors, and virtual assistants. Cost structures change dramatically by utilizing talent on a global scale, but it all needs to be managed thoughtfully. Finally, teams of the future will integrate AI agents to perform low-level and even mid-level tasks to free up humans to add value at a more strategic and creative level. In short, the agency structure of the future is lean and virtual.

Thought Leadership-Centric Marketing

I rode the internet wave in 1996, teaching myself search engine optimization (SEO), pay-per-click (PPC), email marketing, and social media. I built teams and benefitted from the excitement, confusion, and momentum of the early 2000s migration to digital marketing. While SEO and PPC still work today, AI has dramatically altered the landscape.

Marketing of the future, particularly online, will be driven by thought leaders and influencers. Agencies will need to leverage public relations techniques to gain an edge over competitors, particularly in search engines and AI platform searches. Google unveiled its EEAT methodology for identifying high-quality content sources in 2022. Since then, websites that are developed with EEAT in mind perform better in searches.

To win the search battle, agencies must demonstrate Experience based on quantity metrics like years-in-business, customers, and review counts. The Expertise element can be demonstrated via unique content like blog posts and FAQs. Authority is best represented by PR initiatives like syndicated articles, media mentions, and speaking gigs at industry conferences. Lastly, Trustworthiness is illustrated by client testimonials and case studies, as well as industry awards and certifications.

AI-Powered Sales

Creating a healthy sales pipeline at agencies is often the most popular topic at our Agency Owner Roundtable meetings. To ensure stability, agencies must always be building a sales pipeline, which is often challenging for marketing professionals who would rather be doing the work than selling it. The most successful agencies have dedicated business development teams to “own the pipeline.”

The agency of the future will have a clearly defined set of client personas, by industry, seniority, geography, or other key factors. AI can be helpful in creating ideal customer profiles (ICPs), based on historic data, augmented with timely research. From there, utilize tools like Apollo or ZoomInfo to secure contact information from prospects that match your ICP. The next step is creating messaging for drip campaigns, utilizing LinkedIn plug-ins like Meet Alfred to contact and nurture prospective clients.

Outcomes-based Services & Pricing

One trap I see many agencies fall into is the hourly rate model, with time and materials pricing. It took me 20 years to move away from the hourly rate model, which I believe is outdated and irrelevant, particularly since the adoption of AI. Agencies of the future will reframe products and services based on value instead of the time it takes to create the output.

To inform a value-based pricing model, consider competitive benchmarking, augmented with informal focus groups (and AI) to reframe messaging based on the client’s perspective and pain points. Services should be simplified, actionable, and highly measurable to delight clients. When pricing services, clearly articulate the return on investment (ROI) and the associated impact of the client’s investment.

AI-Infused Operations

The agency of the future will integrate AI into every aspect of the business, from the technology stack to the organizational chart. I’ve outlined the depth and breadth of AI-integration, and that is just scraping the surface. AI should be used to automate processes and tasks, but don’t stop there. The agencies of the future will integrate AI agents into the org chart to take the technology seriously. However, the agency of the future will put employees first, and not let the AI tail wag the agency dog.

When ChatGPT launched in late 2022, most agency professionals were unclear about what was possible. It didn’t take long to impact on the structure and workflow of agencies, however. I used to say AI turned graphic designers into art directors and copywriters into copy editors. Tools have evolved rapidly and dramatically since then. See how Gamma replaces junior designers, how Google ImageFX displaces junior illustrators, and USECMO replaces brand strategists. In fact, watch Marblism replace six key employees at small firms.

The agency of the future may not be “AI first,” but it will be “AI-infused.” Nobody is immune to the march of AI, but agency leaders and employees who embrace AI will replace those who do not.