Advertising Agencies: Is the Industry Living on Borrowed Time?

Over the past few months, I’ve had candid conversations with senior leaders and veterans in advertising, and while the consensus is sobering, I believe there’s still a way forward. Having spent my career in this industry, it’s heartbreaking to witness the challenges we’re facing, but what’s more painful is seeing the potential for transformation slipping through our fingers. The question is: Are we nearing the end, or do we have the courage to adapt and evolve?

The Pressures Agencies Face

It’s no secret that traditional advertising agencies are being squeezed from multiple directions. The rise of platforms like Google and Facebook has allowed brands to bypass us and go directly to their audiences, cutting out the middleman. Meanwhile, companies are building in-house creative teams, keeping their brand control close to home and reducing the need to partner with agencies. This is where the cracks start to show.

The real revolution, however, comes from data and automation. Precise targeting at scale is now the name of the game. Automated platforms have changed the rules, and traditional strategies just aren’t cutting it anymore. And when clients demand measurable ROI on increasingly tight budgets, the pressure on agencies to prove their worth becomes unbearable.

Here's the thing, these challenges, while real and significant, are not unfixable. It’s not just external forces disrupting us; the real work lies in addressing the deeper structural issues. We have to recognize these and take action before it’s too late and it’s time to face the deeper issues.

The Deeper Issues Holding Us Back

1. Commoditization of Creative Services: I’ve always believed that creativity is our crown jewel, but these days, clients treat it like a commodity. The value of unique, breakthrough creative work has been eroded by price competition. Agencies are fighting for smaller and smaller pieces of the pie, which makes it difficult to invest in the talent and innovation that originally made us indispensable.
2. Fragmented Media Channels: The proliferation of digital platforms and influencers has fractured the advertising landscape. The unified campaigns we once championed are harder to pull off when brands can easily collaborate with niche influencers or run micro-campaigns directly. The complexity is staggering, and the old agency model struggles to stay relevant in this chaos.
3. Eroding Trust in Agencies: This one stings. Scandals around media buying, hidden fees, and kickbacks have deeply damaged trust between agencies and clients. If clients don’t trust us with their budgets or believe we’re transparent in our dealings, they’ll take matters into their own hands. And they are.

But the deepest issue, and one that often flies under the radar, is the struggle to attract and retain talent. Agencies used to be dream destinations for creatives, strategists, and innovators. But now, the best minds are lured by tech giants, startups, or even the allure of working directly with brands. Why? Because we haven’t adapted our work cultures or empowered our teams the way these companies have. The grind of agency life has become less attractive, and as a result, we’re losing the very people who could help us innovate our way out of this mess.

Can the Industry Be Saved?

Despite all of this, I believe we’re not done yet. But it’s going to take more than just a slight course correction. The industry needs radical change.

1. Embrace Data & Technology: Agencies are already using data, but we need to go deeper. The future lies in truly integrating data with creativity, not just using it for targeting but allowing it to inspire the work itself. The agencies that do this seamlessly will drive the next wave of impactful marketing.
2. Diversify Services: Agencies are broadening their horizons, but surface-level expansion won’t cut it. We need to embed ourselves in clients’ broader digital transformations and product innovations, offering strategic value that goes beyond just campaigns.
3. Double Down on Creativity: This is where I get excited, because no matter how advanced the algorithms become, they’ll never replicate human creativity. Stories still move people. Emotion still drives action. If agencies can refocus on creating powerful, emotionally resonant stories, we’ll carve out a space that no machine can touch. But this takes talent, and we need to foster environments where the best creatives want to stay and thrive.
4. Build Trust Through Transparency: Trust is everything. We need to rebuild it, brick by brick, by being upfront with clients about media buying and fees. Agencies must be seen as partners, not vendors, and that starts with honesty and transparency.

The Future of Agencies

I’ve been in this industry long enough to know that change doesn’t come easy, but I also know that advertising agencies have always been resilient. We’ve reinvented ourselves before, and we can do it again. There’s still time, but we need to act before it runs out.

The biggest challenge isn’t recognizing that change is needed, we’ve known that for a while. The challenge is having the courage to make that change happen and to make it happen now.

What Do You Think?

Is the industry really on borrowed time, or are we on the cusp of a much-needed evolution? I’m curious to hear your thoughts on how agencies can truly transform. What changes have you seen that give you hope—or concern? Let’s keep the conversation going. Drop a comment below and let’s discuss what’s next for advertising.