Progency: The AI-First Agency of the Future

Published April 24, 2025-May 4, 2025

History – 1

Before exploring the future, I began by asking the AIs (Claude, ChatGPT, DeepSeek) to write a history of marketing and advertising agencies.

The Earliest Agencies: Space Brokers to Brand Architects (1840s-1950s)

The origins of marketing agencies were remarkably humble. In 1841, Volney B. Palmer established what many consider the first advertising agency in Philadelphia, operating primarily as a “space broker” – purchasing newspaper advertising space wholesale and reselling it to businesses at a markup. This transactional model dominated the industry’s infancy.

By the late 19th century, agencies began their first significant evolution. J. Walter Thompson (founded 1864) pioneered the transition from mere space selling to offering creative services and strategic guidance. Similarly, McCann Erickson (established 1902) began developing comprehensive brand messaging as America industrialised. During this period, most businesses operated under the simple belief that good, affordable products would naturally attract customers, with marketing limited to basic product announcements.

The 1920s-1940s marked what historians call the “Sales Era,” as intensified competition forced consumer goods companies to develop more sophisticated selling techniques. Agencies formalised their structures to meet these needs, though their focus remained largely on persuasive tactics rather than deep customer understanding.

It wasn’t until the post-WWII economic boom that agencies truly came into their own as creative powerhouses – the era immortalised in “Mad Men.” This period saw marketing departments gain substantial influence over company direction, with agencies as their partners in crafting national brand identities. Creativity and mass media buying dominated the agency model, with legendary figures like Bill Bernbach, David Ogilvy, and Leo Burnett establishing agencies that would define advertising for decades.

The agency model was straightforward: 15% media commission plus production fees, with services divided into account management, creative development, media purchasing, and production. Measurement remained largely rudimentary – often guesswork – with agencies competing primarily on creative flair and storytelling ability rather than quantifiable results.

The Marketing Company Era and Agency Transformation (1960s-1990s)

The 1960s-1990s saw marketing agencies expand their influence as businesses increasingly prioritised customer satisfaction over pure product focus. This period witnessed the emergence of Direct Marketing and early Customer Relationship Management (CRM), utilising databases for more targeted campaigns.

Yet this era also cemented a problematic division within marketing operations: acquisition teams commanded 80-90% of budgets pursuing new customers through media buying and campaign management, while CRM teams operated as smaller, often marginalised units focused on retaining existing customers through loyalty programs, email, and personalised communications.

Agencies mirrored this division, with traditional agencies handling mass brand messaging and specialised direct marketing agencies managing customer retention – creating disconnects that would have lasting consequences for marketing efficiency.

The Age of Consolidation: Global Giants Emerge (1980s-1990s)

The 1980s witnessed perhaps the most significant structural transformation in the agency landscape with the rise of holding companies. This consolidation was epitomised by WPP – originally Wire and Plastic Products, a manufacturer of shopping baskets – which Martin Sorrell transformed through aggressive acquisitions into the world’s largest marketing services company.

Similar holding companies emerged: Omnicom (formed in 1986 through the merger of BBDO, DDB, and Needham Harper), Interpublic Group, Publicis, and Japan’s Dentsu. These conglomerates swallowed independent agencies to form massive marketing networks that could serve global clients across multiple disciplines and regions.

The holding company model was driven by several converging forces:

Client globalisation demanding worldwide agency presence
Media fragmentation requiring broader expertise
Financial pressures for economies of scale
The need to offer integrated services beyond traditional advertising

This consolidation created “full-service” offerings through specialised agencies under single corporate umbrellas. A client might simultaneously work with several agencies within the same holding company – one for creative development, another for media planning, yet another for PR or direct marketing.

While this model delivered shareholder value through acquisition and cross-selling, it often created complexity that clients found challenging to navigate. Critics argued that consolidation stifled creativity and entrepreneurial spirit, setting the stage for boutique agencies to emerge as nimble alternatives.

Relationship Marketing Era (1990s-2010)

The 1990s and early 2000s saw agencies emphasising the creation and maintenance of long-term customer relationships. However, the fundamental division between acquisition and retention persisted and even deepened. Acquisition continued to dominate agency budgets and attention, with retention activities receiving proportionally less investment despite their proven ROI advantage.

Boutique agencies found new purpose during this period, specialising in emerging disciplines like customer experience design, loyalty program management, and early digital marketing. Agencies like Crispin Porter + Bogusky gained recognition for edgy campaigns that larger, more process-driven competitors struggled to match.

History – 2

Digital Disruption: The Internet Rewrites the Rules (2000s-2010s)

The internet revolution dramatically transformed the agency landscape. New digital channels introduced unprecedented opportunities for targeting, measurement, and engagement – but also fragmented the media landscape further, challenging the traditional agency model.

Digital-native agencies like Razorfish, AKQA, and R/GA pioneered approaches to web design, online advertising, and emerging platforms. Legacy agencies responded by either building digital capabilities internally or, more commonly, acquiring established digital shops – often at premium valuations reflecting the scarcity of digital talent.

The digital era introduced fundamental challenges to traditional agency economics:

The collapse of the 15% commission model as media buying became programmatic and auction-based
The rise of project-based engagements replacing agency-of-record relationships
Increased client demands for performance measurement and ROI
The emergence of walled garden platforms like Google and Facebook that offered self-service advertising tools directly to clients

This period saw the online advertising revolution introduce new channels – search, display, affiliate marketing – yet these innovations reinforced the same fundamental division between acquisition and retention. Media agencies adapted by developing expertise in programmatic buying, search marketing, and social media advertising, while creative agencies often struggled to maintain relevance in an increasingly data-driven environment.

AI and machine learning first entered marketing during this period, primarily as optimisation tools for ad targeting, bidding strategies, and basic personalisation. However, these were largely incremental improvements rather than transformative solutions to marketing’s structural inefficiencies.

The Disruption Intensifies: New Competitors Enter (2010s-2020)

The 2010s witnessed an unprecedented blurring of boundaries as new players entered the agency space:

Management Consultancies: Accenture, Deloitte, PwC, and others acquired creative agencies and digital experience firms to combine business transformation services with marketing execution. These consultancies leveraged their C-suite relationships and data expertise to position themselves as strategic partners rather than vendors.
Tech Platforms: Google, Facebook (Meta), and Amazon developed increasingly sophisticated self-service tools and dedicated agency support teams, gradually disintermediating traditional agency functions while capturing growing shares of advertising budgets.
Specialised Boutiques: Niche agencies focused on emerging disciplines like influencer marketing (e.g., Obviously), content production, social media management, and specialised technologies flourished by offering expertise that larger agencies struggled to develop organically.
In-House Agencies: Major brands like Unilever, P&G, and numerous direct-to-consumer startups built substantial internal agency capabilities, bringing media buying, creative development, and content production in-house to increase control and reduce costs.

This period also witnessed the rise of data-driven marketing as a core discipline, with agencies increasingly focused on:

Customer data platforms and management
Audience segmentation and targeting
Attribution modeling
Marketing automation
Personalisation at scale

The traditional divide between “creative” and “media” agencies began to blur, with data emerging as the connective tissue between message creation and delivery. Yet despite these advances, the fundamental inefficiency of marketing – the massive spending on reacquiring existing customers – persisted and even intensified as digital platforms made it easier to target “lookalike” audiences that often included a brand’s own customers.

The Present Landscape: Fragmented and Hyper-Competitive (2020s)

Today’s agency ecosystem reflects these compounding disruptions:

Holding Companies: WPP, Publicis, Omnicom, Interpublic, and Dentsu continue to dominate in terms of scale, but face pressure to decentralise and become more agile, embracing networks of micro-agencies with specialised capabilities.
Independent Agencies: Mid-sized independents like Wieden+Kennedy maintain strong positions through distinctive creative approaches and cultural relevance.
Boutique Specialists: Smaller firms thrive by offering deep expertise in specific domains – Red Antler in startup branding, for example, or MediaLink in industry consulting.
Consultancies: Accenture Interactive (now Accenture Song), Deloitte Digital, and others continue expanding their marketing services capabilities through acquisition and organic growth.
Tech Platforms: Google, Meta, and Amazon increasingly function as both media channels and marketing service providers, offering sophisticated tools for campaign management, measurement, and optimisation.

Clients now demand far more than creative ideas: they expect measurable results, real-time analytics, technological integration, and purpose-driven narratives addressing sustainability, diversity, and other social concerns. The lines between marketing, customer experience, and technology have blurred, requiring agencies to develop expertise far beyond traditional creative and media services.

The industry faces several structural challenges:

Talent Shortages: Agencies struggle to attract and retain top talent amid competition from tech companies, in-house teams, and gig economy options for creative professionals.
Margin Pressure: Procurement-led pitches, project-based work, and performance-based compensation have squeezed agency margins, leading to staff reductions and underinvestment in innovation.
Privacy Changes: The deprecation of third-party cookies and increasing privacy regulations threaten established targeting and measurement approaches, requiring new solutions based on first-party data.
Channel Proliferation: The continuous emergence of new platforms – from TikTok to connected TV to the metaverse – demands ever-broader expertise without proportional budget increases.
Customer Experience Integration: The growing importance of seamless customer experience across touchpoints challenges traditional agency structures organised around channels or disciplines.

Despite these challenges, agencies continue to play a vital role in the marketing ecosystem, adapting to changing client needs and technological disruptions while maintaining their core strength: the ability to translate business objectives into compelling communications that drive consumer action.

Consolidation as Answer?

In December 2024, Omnicom acquired Interpublic to leapfrog Publicis and WPP to become the largest agency with combined revenues of over $25 billion.

Here is some of the commentary that followed the announcement.

RTE: “Tech giants such as Alphabet-owned Google and Amazon.com have in recent years attracted marketing dollars away from traditional agencies by offering both advertising tools and marketplaces to buy and sell them. Soaring use of AI tools that allow businesses to create ads cheaper and faster has also squeezed traditional agencies, forcing them to scramble to develop similar in-house tools to retain clients. With more tech-driven solutions coming into the market, MoffettNathanson analyst Michael Nathanson said he was concerned the underlying value proposition of an ad agency’s offering would remain pressured.”

PR Week: “Syracuse University PR professor and former national chair of the Public Relations Society of America, Tony D’Angelo, said…“Omnicom and IPG are betting that their combined scale will give them bigger scale and more leverage with tech providers, and with their media buying and planning.” He added that the acquisition is evidence of how digital and AI technologies are changing the PR landscape. “The holding companies and their agencies will tout this as beneficial to clients, and it may help them deliver additional benefits,” he added. “However, clients may well wonder if they’ll get the attention they need from the larger entity.””

AdWeek: “The acquisition reflects the growing value of data and digitally oriented agencies, the opportunity presented by new technologies like generative artificial intelligence…A core element of the Omnicom takeover is the possibility it presents for the resulting company to serve all of its clients but with fewer personnel, according to Quantum Media principal and New York University professor Erica Gruene. “It’s like the old maxim: The only thing an ad agency owns gets in the elevator and goes down every night,” Gruene said. “And nowadays, you don’t need as many people in the elevator.””

FT: “Advertising rivals question whether the deal has been struck from a position of strength with Sir Martin Sorrell, founder and executive chair of S4 Capital, calling it “a circling of wagons; two people huddling in the cold”. [He said], “This is a reflection of the pressure on agency fees, people and margins together with the spectre of the impact of artificial intelligence and increased programmatic media planning and buying.”… Advertising executives saw the irony of announcing the deal as a new report from WPP’s GroupM came out showing that the industry had rocketed to over $1tn in revenues — but also revealing that more than half of the value was now in the five large tech groups, who accounted for almost all of the growth. The report underlined the need for consolidation in the traditional agency holding company model. Executives agree that the future will be about investing in AI and other technology that allows advertising to be done faster, cheaper and more effectively for clients. One area where scale will potentially make a difference is data and AI investment, with the combined group having increased firepower to invest resources in this area, according to analysts.”

WSJ: “If the Omnicom-IPG deal goes through, the combined company will supplant WPP’s GroupM as the largest global media buyer and gain new leverage with ad sellers in the process, according to Comvergence, a market research firm. Any increased buying power the merger could offer would be welcome, as would the companies’ combined technology resources, including emerging artificial intelligence capabilities, some marketers said. “Scale does matter, global scale does matter, efficiency does matter, and innovation does matter,” said Doug Sweeny, the CMO of wearable tech company Oura Health…“Building out their AI, which can impact business in a way that we’re not entirely clear about, as a larger entity together will make them more formidable to pressures on their moat.””

What’s abundantly clear is that traditional agencies face an existential inflection point—consolidation merely addresses symptoms while ignoring the underlying disease. The Omnicom-IPG merger represents a defensive manoeuvre in an industry fundamentally threatened by both technological disruption and structural inefficiency. The path forward demands more than scale; it requires dismantling the acquisition-centric paradigm that has dominated marketing for two decades and replacing it with a retention-first model that eliminates the systemic waste of repeatedly paying to reach existing customers. The agency of the future will emerge not from incremental adaptation but from radical reinvention—one that transforms marketing from a cost centre driven by ephemeral impressions into a profit engine powered by sustainable customer relationships.

Tomorrow

I then asked the AIs for their views on the agency of the future in an AI-first world. Here is the consolidated view.

The agency of the future in an AI-first world will undergo a fundamental transformation across multiple dimensions:

Organisational Structure

Leaner Teams: Traditional large agency structures will give way to smaller, more agile teams of strategic thinkers and AI orchestrators
Multi-Agent Ecosystems: Agencies will deploy interconnected AI systems that collaborate on tasks from ideation to execution
Boutique Specialists vs. Transformed Giants: Large holding companies will decentralise into AI-powered micro-networks, while specialised boutiques will leverage AI to compete at scale

Human Roles & Talent

AI Conductors: Humans will shift from execution to orchestration, directing AI systems while maintaining creative vision
New Specialised Roles:
- AI Trainers who teach models to align with brand voice
- Empathy Engineers ensuring emotional resonance
- Prompt Engineers crafting optimal inputs for generative systems
Fractional Talent Networks: On-demand global teams assembled for specific projects, augmented by AI capabilities

Value Creation & Service Offerings

From Hours to Outcomes: Value will shift from billable hours to measurable business results
Curation Over Creation: The premium skill will be curating and refining AI outputs rather than raw creation
AI Literacy as a Service: Agencies will train clients to understand AI capabilities and interpret AI-driven insights
Proprietary Data Ecosystems: Custom data lakes will train agency-specific AI models, creating competitive differentiation

Client Relationships

Continuous Partnerships: Project-based engagements will evolve into ongoing relationships with real-time optimisation
Performance-Based Pricing: With AI’s predictive accuracy, agencies will confidently offer outcome-based compensation models
AI Transparency: Agencies will need to demystify their AI usage, building trust in seemingly “black box” processes

Creative Capabilities

Hyper-Personalisation at Scale: Thousands of tailored ad variants dynamically adjusting for micro-audiences in real-time
Synthetic Talent: AI-generated influencers and virtual spokespeople reducing reliance on human creators
Predictive Storytelling: AI forecasting cultural trends and consumer needs months in advance
Creative Audits: AI analysing past campaign performance to recommend winning approaches for future work

Operational Transformation

Automated Low-Value Tasks: Media buying, reporting, compliance checking, and other routine processes fully automated
Real-Time Campaign Iteration: Continuous A/B testing and optimisation rather than “set and forget” approaches
Seamless Integration: The most effective AI implementation will be invisible, enhancing rather than showcasing the technology

Ethical Considerations

Trust as a USP: Strong ethical frameworks and transparent AI usage becoming competitive advantages
Bias Prevention: Regular auditing of AI models to ensure diverse representation and avoid perpetuating biases
Privacy-First Approaches: Agencies becoming guardians of customer data and brand safety
Human-AI Balance: Maintaining the human element while leveraging AI capabilities

Key Challenges

Creative Homogenisation: Risk of formulaic outputs if everyone uses the same AI tools
Talent Transition: Managing the shift from traditional roles to AI-augmented positions
Value Definition: Articulating the unique human contribution in a world where AI can handle 80% of marketing tasks

The most successful agencies will blend AI capabilities with distinctly human qualities—empathy, cultural understanding, strategic thinking, and emotional intelligence—creating a seamless partnership that feels more human, not less, despite the technological underpinnings.

Possibilities

My next question to the AIs was about which entity is best placed to build the agency of the future.

The AI-first agency of the future will likely emerge from several different players, each bringing unique strengths to this transformation:

Leading Contenders

AI-Native Startups & Specialists

Unique advantage: Built around AI from day one with no legacy constraints
Key strengths: Speed to market, disruptive pricing models, technical innovation
Examples: Specialised firms like Synthesia (AI video), Jasper (AI content), Runway ML
Challenge: Building strategic credibility and brand trust beyond being seen as tech vendors

Consulting Giants with Creative Ambitions

Unique advantage: C-suite relationships, enterprise AI expertise, massive resources
Key strengths: Accenture (7% market share in generative AI services, $3B AI investment)
Examples: Accenture Song, Deloitte Digital ($4B AI expansion plans)
Challenge: Overcoming perception as “soulless” and attracting top creative talent

Tech Giants & Platforms

Unique advantage: Own the foundational AI models and massive data ecosystems
Key strengths: Vertical integration, unmatched computational resources
Examples: Microsoft/OpenAI, Google (Gemini), Adobe (Firefly), Meta (Llama)
Challenge: Overcoming trust issues as platforms that compete for advertising dollars

Legacy Agency Networks (With Transformation)

Unique advantage: Client relationships, creative heritage, global infrastructure
Key strengths: Resources to acquire AI capabilities, massive scale
Examples: WPP’s NVIDIA partnership, Publicis’ CoreAI platform, Dentsu’s Merkury data platform
Challenge: Bureaucracy, billable-hour mindset, talent retention against tech companies

Forward-Thinking Martech & SaaS Companies

Unique advantage: Data-driven DNA, existing marketing technology stacks
Key strengths: Access to first-party data, established marketing workflows
Examples: Salesforce, HubSpot, agentic AI platforms
Challenge: Building creative credibility beyond technical capabilities

Decentralised Creator Networks

Unique advantage: Authenticity, direct access to creators and communities
Key strengths: Fractional talent models, cultural relevance
Examples: Web3 DAOs, platforms like Fiverr or Contra enabling on-demand teams
Challenge: Ensuring brand consistency, scaling for enterprise needs

Client In-House Operations

Unique advantage: Direct control over data, speed, and costs
Key strengths: Alignment with business objectives, proprietary data
Examples: Coca-Cola’s Creative Juice studio, Unilever’s internal capabilities
Challenge: Risk of insular thinking, losing outside creative perspectives

The Winning Formula

The most successful builders of the agency of the future will demonstrate:

Hybrid DNA: Blending technical AI expertise with genuine creative vision
Platform Thinking: Operating as orchestrators of talent, tools, and technology
Ethical Leadership: Setting standards for responsible AI use in marketing
Data Advantage: Proprietary data assets or methodologies for AI training
Cultural Agility: Attracting talent comfortable in both technical and creative domains

The Likely Outcome

Rather than any single player type dominating, we’ll likely see:

Ecosystem Convergence: Blurring lines between traditional categories as acquisitions and partnerships reshape the landscape
New Entrants Rising: AI-native startups with disruptive models challenging established players
Legacy Transformation: Some traditional agencies successfully reinventing themselves through aggressive restructuring
Tech Platform Evolution: Tech giants extending their platforms into agency-like services

The future belongs to organisations that can democratise AI without losing creative soul, operate as fluid networks rather than rigid hierarchies, and balance scale with speed. The biggest threat isn’t competition—it’s irrelevance for those clinging to 20th-century agency models while the world races toward AI.

Who – 1

To a specific question about who can build the agency of the future, I got varying answers from the AIs. Three AIs give three different answers!

Claude

If I had to select just one entity best positioned to build the agency of the future, I would choose Accenture.

Accenture represents the optimal blend of capabilities needed to create the AI-first agency:

Resource Advantage: Their $3 billion investment in AI through 2030 and development of 50+ industry-specific AI agent solutions demonstrates both commitment and capacity to lead this transformation.
Hybrid Business Model: They’ve already bridged the consulting-creative divide through Accenture Song (formerly Accenture Interactive), acquiring creative agencies while maintaining their strategic consulting foundation.
Enterprise AI Expertise: Their AI Refinery platform and specialised agent builder position them at the forefront of enterprise-grade AI implementation across industries.
C-Suite Relationships: Unlike pure creative agencies or tech startups, Accenture has established trust at the highest levels of global organisations, giving them unique influence over AI transformation roadmaps.
Scale and Talent: They have both the global reach and the ability to attract specialised AI talent that smaller players cannot match.
Practical Implementation Track Record: With 7% market share in generative AI services and hundreds of successful AI implementations, they’ve demonstrated ability to move beyond theory to practical application.

What Accenture lacks in creative DNA compared to traditional agencies, they can acquire through strategic purchases. What they lack in foundational AI model ownership compared to tech giants, they compensate for with implementation expertise across multiple platforms.

The agency of the future requires blending strategy, technology implementation, creative execution, and ethical governance – precisely the combination Accenture has been assembling through its evolution from pure consulting into a hybrid strategic-creative-technical powerhouse.

I then asked for additional info on Accenture Song.

Accenture’s existing agency business operates primarily through Accenture Song (formerly Accenture Interactive), which has grown to become one of the world’s largest digital agencies through a strategic acquisition strategy and integrated service model.

Accenture Song: Evolution and Scale

Accenture launched Accenture Interactive in 2009 as a digital marketing services division. In April 2022, they rebranded it as Accenture Song to better reflect its expanded creative capabilities. The unit now generates approximately $15-16 billion in annual revenue, making it comparable in size to major advertising holding companies.

Acquisition Strategy

Accenture has built its agency capabilities through an aggressive acquisition strategy, spending billions to acquire over 40 creative, design, and marketing agencies globally. Key acquisitions include:

Droga5 (2019) – One of their most significant acquisitions, bringing high-profile creative talent and award-winning campaigns
Karmarama (2016) – A major UK creative agency
The Monkeys (2017) – A leading Australian creative agency
Fjord (2013) – A global design and innovation consultancy
MediaHound (2022) – A content intelligence platform
Adaptly (2018) – A digital media buying agency
Rothco (2017) – An Irish creative agency

Integration Model

Unlike traditional holding companies that maintain separate agency brands, Accenture has generally integrated acquisitions under the Song umbrella. Their model connects:

Creative capabilities (campaign development, content creation)
Experience design (UX/UI, customer journeys)
Technology implementation (platforms, data systems)
Business strategy (leveraging Accenture’s consulting expertise)

Differentiated Positioning

Accenture Song has positioned itself differently from traditional agencies by:

End-to-end services: Offering everything from strategy through implementation and ongoing optimisation
Technology integration: Connecting creative work directly to commerce, data, and enterprise systems
Business transformation: Focusing on business outcomes rather than just campaign metrics
Data capabilities: Leveraging Accenture’s analytics expertise for personalisation and measurement

AI Integration

Accenture has been integrating AI into Song’s offerings through:

Content production: Using generative AI to scale creative outputs
Experience optimisation: AI-driven personalisation engines
Media automation: Advanced algorithmic approaches to media buying
Creative analytics: AI tools to predict campaign performance

Challenges and Criticisms

The Accenture agency model has faced some criticism around:

Creative culture: Challenges in maintaining creative excellence within a consulting-driven organisation
Integration complexity: Difficulties in fully integrating acquired agencies
Talent retention: Some creative talent departures after acquisition
Identity tensions: Balancing consulting methodologies with creative processes

Despite these challenges, Accenture Song has established itself as a legitimate competitor to traditional agency networks, particularly for clients seeking integrated technology, business strategy, and creative services as they navigate digital transformation and now AI adoption.

Who – 2

ChatGPT

If I had to bet on one entity to successfully build the Agency of the Future, it would be Adobe.

Why Adobe?

AI and Creative Fusion: Adobe has deep domain expertise in creativity and is already pioneering generative AI through Adobe Firefly, Adobe Sensei, and Creative Cloud products. It uniquely blends creative intuition with technological sophistication.
Martech Dominance: Adobe Experience Cloud (Marketo, Adobe Analytics, Adobe Campaign, Adobe Real-Time CDP) gives it unrivalled access to customer data, analytics, and the capability to scale hyper-personalisation seamlessly.
Existing Trust and Brand Credibility: Adobe has global brand recognition, strong existing relationships with Fortune 500 CMOs, and a trusted position as an enterprise partner—crucial for becoming the strategic agency partner of the future.
Ability to Transition from Tools to Agency: Adobe already offers extensive consulting, managed services, and strategic advisory. Transitioning from tool-provider to agency-provider can be a natural evolution, allowing Adobe to own the full creative-to-consumer value chain.
Financial Muscle and Strategic Vision: Adobe is financially strong, has successfully navigated previous technological shifts (print → digital → mobile → AI), and has consistently demonstrated willingness to invest and pivot aggressively towards market leadership.

Close Competitors:

Salesforce (strong martech/data presence, less creative DNA)
Accenture Interactive (deep consulting capabilities, weaker native AI tech stack)
Google/Meta (powerful tech stacks, but limited agency-style personalised customer journeys)

However, Adobe’s unique intersection of creative mastery, powerful martech stack, and advanced AI capabilities makes it the most compelling bet to build the definitive Agency of the Future.

DeepSeek

If forced to pick a single contender most likely to build the Agency of the Future, Publicis Groupe stands out as the best bet—not because it’s flawless, but because it’s aggressively reengineering itself to balance legacy strengths with future-proof agility. Here’s why:

Strategic Acquisitions & Tech Investments

Publicis has spent the past decade acquiring capabilities that legacy peers are still scrambling to replicate:

Epsilon ($4.4B in 2019): A data powerhouse with 250M+ consumer profiles, enabling hyper-personalised AI-driven campaigns.
Sapient ($3.7B in 2015): A digital transformation consultancy, bridging marketing and enterprise tech.
CoreAI (2024): Its proprietary AI platform, trained on Publicis’ 2.5 petabytes of data, automates everything from media planning to creative ideation.

These moves position Publicis not just as a “marketing agency,” but as a data-driven tech integrator.

Decentralised Agility

While rivals like WPP remain siloed, Publicis has restructured into the “Power of One” model:

Agencies (Leo Burnett, Saatchi & Saatchi) collaborate under a single P&L, breaking down internal competition.
Marcel, its AI-powered talent platform, connects 100,000+ employees globally, enabling fluid team-building for client projects.
Micro-agencies like Publicis Sapient and Publicis Spine act as nimble innovation labs, bypassing holding-company bureaucracy.

This structure mirrors the “network of micro-agencies” future—big enough to scale, agile enough to pivot.

AI Fluency Without Losing Creativity

Publicis avoids the “soulless AI” trap:

Its Creative at Scale division pairs generative AI tools with human creatives to produce 10x more content (e.g., personalised Coca-Cola ads).
Partnerships with Adobe and Microsoft integrate Firefly and Azure AI into workflows, but campaigns retain emotional punch (e.g., award-winning work for Heineken, Samsung).
Ethical guardrails: Publicis openly audits AI models for bias and trains staff to use AI responsibly—a trust advantage over startups and tech giants.

Consulting-Like Client Access

Publicis mimics consultancies’ C-suite influence:

Sapient advises CEOs on digital transformation, embedding Publicis deeper into client operations.
Dynamic Client Solutions offers AI-powered performance guarantees (e.g., “We’ll cut customer acquisition costs by 20% or refund the difference”).

This shifts Publicis from a vendor to a growth partner, competing directly with Accenture Song.

First-Mover in the AI Talent War

Publicis is poaching talent from both tech and creative worlds:

AI engineers from Google and Meta to refine CoreAI.
Storytellers from Hollywood and TikTok to humanise AI outputs.
Upskilling programs: 100,000 employees trained in AI prompt engineering and data ethics by 2024.

The Risks

Publicis isn’t invincible:

Integration challenges: Melding Epsilon’s data with creative teams remains messy.
Overpromising on AI: Clients may revolt if campaigns feel robotic.
Consultancy competition: Accenture Song’s $18B revenue dwarfs Publicis’ consulting arm.

Why Publicis Over Others?

Tech Giants (Google/Meta): Lack creative credibility and face brand distrust.
Boutiques: Too niche to handle global, integrated campaigns.
WPP/Dentsu: Still shackled by legacy structures and slower AI adoption.
Accenture: Strong on data, weak on creative emotional

Publicis uniquely merges enterprise-grade tech, creative firepower, and operational agility—the trifecta needed to dominate an AI-first world.

Final Take: The Agency of the Future must be part-creative studio, part-consultancy, part-tech lab. Publicis Groupe is the only legacy player actively becoming all three. If it continues to decentralise, invest in ethical AI, and prioritise outcomes over billable hours, it could render the “holding company vs. boutique” debate obsolete—and redefine marketing itself.

Deep Research

I asked ChatGPT Deep Research to perform an in-depth analysis of how agencies are evolving in response to technological advancements, particularly AI, and shifting client demands. Here’s a summary of the key insights. (The full research document is approximately 19,000 words.)

Historical Evolution of Agencies

Traditional agency models began with creative agencies focusing on campaign concepts, media agencies handling placement, and later digital agencies emerging for online marketing. Compensation evolved from the standard 15% commission system to fee-based models, project fees, retainers, and increasingly, performance-based pricing tied to measurable outcomes. Major disruptions included digital transformation, programmatic advertising, data-driven marketing, the shift from mass marketing to personalization, and data privacy regulations.

Current Agency Landscape

Today’s agency ecosystem includes global holding companies (WPP, Omnicom, Publicis, etc.) alongside independent and boutique firms. Agencies face significant challenges:

Talent attraction and retention as skilled employees are lured to tech companies or start their own firms
Margin pressure from clients negotiating aggressive fees
Shorter client relationships as brands frequently review accounts or parcel projects to multiple agencies
Competition from consulting firms and in-house agencies (82% of major advertisers have some form of in-house agency)
Keeping pace with rapidly evolving technology

Traditional business models are being tested as clients move away from retainers toward project-based or performance-driven engagements. Agencies are responding by specializing in niches, integrating more deeply with client teams, or developing hybrid compensation models.

AI-Driven Future

The “AI-first agency” will likely have a leaner structure with AI handling production and optimization while humans focus on strategy, oversight, and creative direction. Key technologies reshaping agencies include:

Generative AI creating text, images, and video
Predictive analytics forecasting outcomes and audience behavior
AI-driven media buying and optimization
Multi-agent systems with specialized AI agents collaborating on different functions
AI tools for project management and operations

AI will transform core agency functions: creative teams will use AI as a partner for ideation and production; media planning will become more data-driven with algorithms managing placements in real-time; performance marketing will shift from reporting the past to predicting the future; and strategy roles will focus on decision-making with AI inputs.

Insourcing vs. Outsourcing

AI tools becoming more accessible could accelerate the in-housing trend, as brands find they can achieve similar results with fewer people. Agencies will need to reposition themselves as innovation partners and strategic advisors rather than execution teams. The balance between insourced and outsourced work will vary by company size and region, but agencies must prove their value in an environment where baseline capabilities are higher for everyone.

Future Business Models

Several forward-looking models are emerging:

Performance-based pricing aligning agency compensation with client results
Subscription-based services offering predictable costs and recurring revenue
Hybrid SaaS-agency blends combining proprietary platforms with consultative services
Consulting models charging for strategic advice while execution is automated
Marketplace platforms connecting clients with talent and AI solutions

Potential Builders of the Future Agency

Multiple players are competing to define the agency of the future:

Holding companies have scale, global reach, and client relationships but face legacy structures and talent drain
Tech platforms (Google, Meta, Adobe, etc.) possess cutting-edge AI and vast data but lack service DNA and creative heritage
Consulting firms (Accenture, Deloitte) offer strategic rigor and C-suite access but may struggle with creative culture
AI-native startups bring innovation and agility but face challenges with credibility and resource constraints

Additional Considerations

The essay also highlights several important factors that will shape future agencies:

Ethical challenges including data privacy, algorithmic bias, transparency, IP rights, and workforce impact
Disruptions to the advertising supply chain as AI streamlines production and buying processes
The need for agencies to navigate varied global privacy laws and develop privacy-first strategies
A potential shift in focus from customer acquisition to brand building and retention as AI commoditizes performance marketing

Strategic Takeaways

The agency industry is at an inflection point, creating opportunities for innovators. AI will be the centerpiece of future agencies, but success will come from human-AI collaboration rather than replacement. Regional differences will persist, with emerging markets potentially leapfrogging with new models. Ethics and trust will become key differentiators as agencies navigate AI responsibly.

The “Agency of the Future” won’t follow a single model but will share common characteristics: AI-first operations, outcome-based mindsets, integrated services, global yet local capabilities, and ethical frameworks. Those who invest in technology and talent today will become the indispensable marketing partners of tomorrow.

My Take – 1

As can be expected, I have a very different view on the agency of the future in an AI-first world. (This section builds on my previous writings with assistance from Claude.)

Beyond Consolidation: A New Model Emerges

Reiterating what I wrote earlier: “What’s abundantly clear is that traditional agencies face an existential inflection point—consolidation merely addresses symptoms while ignoring the underlying disease. The Omnicom-IPG merger represents a defensive manoeuvre in an industry fundamentally threatened by both technological disruption and structural inefficiency. The path forward demands more than scale; it requires dismantling the acquisition-centric paradigm that has dominated marketing for two decades and replacing it with a retention-first model that eliminates the systemic waste of repeatedly paying to reach existing customers. The agency of the future will emerge not from incremental adaptation but from radical reinvention—one that transforms marketing from a cost centre driven by ephemeral impressions into a profit engine powered by sustainable customer relationships.”

The Retention Revolution: Agency of the Future

While holding companies struggle with consolidation to combat shrinking margins and technological threats, a fundamentally different agency model is emerging—one built not around creative services or media buying but on the principle of maximising customer lifetime value through retention.

Retention-First Paradigm

The agency of the future – Progency – inverts the traditional marketing funnel by focusing primarily on keeping and growing existing customer relationships rather than the endless (and increasingly expensive) pursuit of new ones. This retention-first approach acknowledges a fundamental truth that adtech-oriented agencies have long ignored: acquiring a customer once and nurturing that relationship delivers far greater ROI than repeatedly paying platforms to reacquire the same customers.

This shift means redeploying resources from wasteful reacquisition to relationship deepening through:

Daily engagement with existing customers through owned channels
True 1:1 personalisation enabled by AI and zero-party data
Frictionless conversion experiences within owned media
Customer advocacy programmes that drive referrals (essentially zero-cost acquisition)

For client brands, this transformation promises a dramatic improvement in marketing efficiency, cutting the 70% of budgets currently wasted on reaching customers already in their databases while simultaneously increasing lifetime value from each relationship.

The PEAK Framework: Building the Next-Generation “Progency”

At the core of this new model lies the PEAK framework—a comprehensive approach combining Platform, Experts, AI Agents, and Kaizen continuous improvement methodology to deliver performance-based outcomes rather than just services or software.

Platform (Martech)

Progency doesn’t merely use technologies—it owns or deeply integrates proprietary martech systems that enable:

Complete customer data unification across touchpoints
Seamless multi-channel orchestration
Interactive engagement capabilities like AMP in email (NeoMails)
First-party data collection and activation
Authenticated identity solutions for precision targeting (NeoN)

Unlike traditional agencies that buy third-party tools or consultancies that implement others’ software, these next-generation agencies build their competitive advantage on proprietary technology stacks.

Experts

Human expertise remains critical—not for routine execution but for strategy, creativity, and relationship management:

Vertical industry specialists who understand sector-specific challenges
Customer journey architects who design frictionless experiences
Data scientists who translate insights into actionable strategies
Creative directors who establish brand guidelines and messaging frameworks

The key distinction: these experts focus on high-level strategy and innovation rather than day-to-day campaign management or production tasks, which become increasingly automated.

AI Agents

Perhaps the most transformative element, AI agents form a “Department of One” that handles complex marketing operations at scale without proportional staffing increases:

Content agents that generate personalised messaging across channels
Journey agents that orchestrate multi-step customer experiences
Analytics agents that continuously monitor performance and identify optimisation opportunities
Testing agents that autonomously experiment with variations to improve results
Segment agents that identify micro-audiences for targeted engagement

These agents work collaboratively under the supervision of an AI Co-Marketer that ensures all activities align with brand guidelines and strategic objectives—effectively performing tasks that would otherwise require dozens of human specialists.

Kaizen (Continuous Improvement)

The final element is a methodology of relentless optimisation:

Rigorous A/B testing across all touchpoints
Incremental enhancement of customer experiences
Data-driven refinement of targeting models
Streamlined workflows and processes
Constant knowledge sharing across client engagements

This systematic approach ensures that performance improves continuously over time, compounding the value delivered to clients.

Performance-Based Economics

Progency fundamentally reimagines compensation through performance-based models that align agency incentives directly with client business outcomes. Rather than billing for time, media commission, or flat retainers, the agency earns a percentage of the measurable uplift it creates:

Revenue share on incremental sales generated
Performance fees tied to customer retention metrics
Cost reduction bonuses from eliminating AdWaste
Value-based pricing linked to lifetime value improvements

This revolutionary model transforms marketing from a cost centre into an accountable investment with measurable returns—much like adtech platforms but focused on retention rather than acquisition.

My Take – 2

Three Core Services

Progency will likely specialise in three interconnected service areas that specifically target different customer segments based on their engagement levels and value potential.

NeoN: Reacquisition Reimagined

For “Test” customers—those who have gone dormant or inactive (90+ days)—the traditional approach has been expensive retargeting through Google and Meta. NeoN offers a revolutionary alternative:

An email-based ad network leveraging authenticated identity
Brand-to-brand collaboration that eliminates platform intermediaries
Precision targeting through PII-based matching
Interactive ActionAds that enable frictionless transactions directly within email
Performance-based pricing that aligns all parties’ incentives

NeoN transforms reacquisition economics by enabling brands to reach their dormant customers through the active engagement channels of non-competing brands. This creates a dual benefit: one brand “prints money” by monetising their engaged audience while another “saves money” by efficiently reactivating their dormant customers.

NeoMails: Reactivation Through Interactive Engagement

For “Rest” customers—those showing declining engagement (30-90 days inactive)—NeoMails provides a proactive intervention to prevent them from becoming fully dormant:

AMP-powered interactive email experiences
Atomic Rewards (Mu) that gamify engagement and drive consistent opens
Microns that deliver 15-60 second “brain gain” experiences
SmartBlocks for zero-party data collection
In-email transactions that eliminate the “click-through penalty”

NeoMails transforms traditional email from static broadcasts into engaging, interactive experiences that command attention and drive action—solving the “No Hotline” problem that forces brands into expensive reacquisition cycles.

Neo360: End-to-End Customer Growth

For brands seeking comprehensive optimisation of their customer relationships, Neo360 offers an integrated solution combining platform capabilities with expert services and AI orchestration:

Complete ownership of customer journeys across touchpoints
N=1 personalisation at scale through AI Twins
Automated content creation and optimisation
Cross-channel orchestration with real-time adaptation
Continuous testing and refinement of engagement strategies

Neo360 typically begins by focusing on maximising value from Rest customers before expanding to Best customer retention and Next customer conversion—creating a seamless ecosystem for sustainable growth.

The Economics of Progency

Progency creates a fundamentally different economic relationship with clients:

Zero Base Fee + Performance

Minimal upfront costs for clients
Agency compensation directly tied to measurable outcomes
Shared risk and reward creates perfect alignment

Measurable ROI

Clear attribution through control/test methodologies
Transparent performance reporting
Accountability for business impact, not just marketing metrics

Long-Term Partnerships

Multi-year agreements focused on customer lifetime value
Deeper integration with client operations
Shared data infrastructure and knowledge building

This economic model transforms agencies from vendors selling services to partners invested in long-term business success—a dramatic shift from today’s project-based, procurement-driven agency relationships.

The Competitive Landscape

Progency’s transformative model will face different competitive threats than traditional agencies:

Traditional Agency Holdcos

Struggling with legacy cost structures and business models
Attempting digital transformation but constrained by quarterly earnings pressure
Unable to make the technology investments needed for true AI-native operations

Tech Platforms

Building increasingly sophisticated self-service tools
Limited by focus on their own ecosystems rather than cross-channel orchestration
Facing privacy headwinds that challenge their targeting models

Management Consultancies

Strong in strategy but weaker in execution
Growing creative capabilities but lacking proprietary martech
Typically using performance-based pricing but not fully retention-focused

In-House Teams

Developing deeper customer understanding
Challenged by talent acquisition and technology integration
Often still acquisition-focused due to organisational structures

Progency will need to navigate this complex landscape by offering a compelling alternative that delivers measurable business results through retention-focused strategies, proprietary technology, and performance-based economics.

My Take – 3

Here is a table comparing agencies of today with Progency.

Dimension	Traditional Agencies Today	Progency: The AI-First Agency
Core Focus	Acquisition and creative campaigns	Retention and customer lifetime value
Primary Value Proposition	Creative ideas and media buying	Measurable business outcomes and eliminated AdWaste
Customer Segmentation	Demographic and behavioural	BRTN (Best, Rest, Test, Next) engagement-based
Technology Approach	Uses third-party tools	Owns proprietary martech platforms
AI Implementation	Bolt-on features and point solutions	AI-native with multi-agent orchestration
Team Structure	Large, specialised departments	Lean strategic teams with AI “Department of One”
Compensation Model	Time-based billing, commissions, retainers	Performance-based with revenue sharing
Platform Relationship	Dependent on Google/Meta for targeting	Independent alternative to adtech platforms
Media Strategy	Paid media dominance (80-90% of budgets)	Owned and earned media prioritisation
Personalisation Capability	Basic segmentation	True N=1 through AI Twins
Creative Process	Human ideation and production	AI-augmented with human strategic direction
Client Relationship	Project-based or annual contracts	Long-term performance-based partnerships
Measurement Focus	Campaign metrics (impressions, clicks)	Business results (LTV, retention rates)
Data Approach	Fragmented, often third-party	Unified first-party and zero-party data
Customer Journey Management	Channel-specific campaigns	Seamless cross-channel orchestration
Operational Philosophy	Campaign-driven	Continuous optimisation (Kaizen)
AdWaste Approach	Accepts reacquisition as normal	Systematically eliminates reacquisition need
Ethical AI Framework	Limited or reactive	Built-in governance and transparency
Core Service Components	Creative, Media, Strategy	NeoN, NeoMails, Neo360
Organisational Agility	Hierarchical and process-heavy	Adaptive and outcome-focused

This comparison highlights how Progency represents not just an evolution of the traditional agency model but a fundamental reimagining of marketing services for the AI era—emphasising retention over acquisition, outcomes over inputs, and relationships over transactions.

Brand Transformation

Traditional Agencies	In-House Teams with Martech	Progency Transformation
Consumables-based pricing (time and materials)	Subscription-based martech costs	Performance-based pricing tied to actual results
No revenue ownership or accountability	Limited accountability for ROI	Brand’s success = Progency’s success
Just another vendor among many	Another internal cost center	True growth partner with aligned incentives
Low stickiness; easily replaced	Tool-dependency without expertise	High stickiness through integrated outcomes
Brand needs a marketing army	Brand struggles with martech complexity	Marketing army optimised with AI orchestration
Campaign-based thinking	Project-based implementation	Continuous customer lifecycle management
Creative-centric with limited data	Data-rich but insight-poor	Intelligence-driven creativity at scale
Siloed channel expertise	Fragmented martech stack	Seamless cross-channel orchestration
Excessive client management layers	Technical debt and integration issues	Streamlined “Department of One” efficiency
Platform-dependent targeting	Limited 1st-party data usage	Owned audience targeting through NeoN
Limited measurement beyond campaign metrics	Basic attribution models	Closed-loop revenue impact measurement
AdWaste accepted as normal cost	AdWaste recognised but unsolved	Systematic AdWaste elimination
Generic messaging to broad segments	Basic segmentation capabilities	True N=1 personalisation through AI Twins
Episodic customer engagement	Inconsistent customer journeys	Daily customer hotlines via NeoMails
Acquisition obsession at expense of retention	Balanced focus but limited effectiveness	Retention-first approach with BRTN framework
70% of budget wasted on reacquisition	50-60% of budget wasted on reacquisition	Budget optimisation through owned channels
90-day planning cycles	Quarterly roadmaps	Real-time optimisation through AI agents
Expertise spread across multiple vendors	Expertise limited by talent constraints	Comprehensive expertise through Neo360
Declining margins; industry consolidation	Rising costs with questionable returns	New profit centre for sustainable growth
Struggling to adapt to privacy changes	Cookie-dependent strategies	Future-proof authenticated identity solutions

The Progency model fundamentally transforms the brand’s marketing from either a scattered agency approach or an overwhelmed in-house operation into a cohesive, AI-powered growth engine focused on maximising customer lifetime value while eliminating the massive waste inherent in traditional approaches.

Conclusion: The Path Forward

For agency leaders looking to evolve toward this model, the Progency path forward includes:

Shift focus from acquisition to retention: Reorient strategies and capabilities around maximising customer lifetime value rather than driving new acquisition
Build or acquire proprietary martech: Develop owned technology assets rather than reselling or implementing third-party tools
Invest in AI agent capabilities: Build autonomous marketing systems that can execute complex tasks at scale
Transform compensation models: Move from time-based or project-based billing to performance-based pricing tied to business outcomes
Specialise in specific customer segments: Focus on solving the unique challenges of Best, Rest, or Test customers rather than attempting to be all things to all clients

The agencies that successfully make this transformation will not merely survive the industry’s disruption—they’ll lead it, helping brands eliminate the massive waste of AdWaste while building more valuable, sustainable customer relationships. In doing so, they’ll reclaim the strategic importance that agencies have gradually lost to adtech platforms and consultancies, becoming true growth partners rather than mere service providers.

Progency isn’t just a better version of today’s model—it’s a fundamental reimagining of the agency’s role in the marketing ecosystem. By focusing on retention over acquisition, outcomes over inputs, and relationships over transactions, it offers a compelling alternative to the consolidation-as-defence strategy currently dominating industry headlines.

As we enter the era of NeoMarketing—the third major epoch following Traditional Marketing (1950s-1990s) and Modern Marketing (2000s-2020s)—Progency represents the ideal implementation partner. While NeoMarketing provides the philosophical framework for transforming marketing from a cost centre into a profit engine, Progency delivers the operational blueprint. Together, they create a pathway for brands to escape the $500 billion AdWaste trap and build sustainable, profitable customer relationships that drive genuine business growth.

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