By 2026, can agencies rewrite the playbook fast enough to survive?

A fundamental transformation is set to redefine marketing agencies by 2026. Driven by the triple pressures of AI, the growth of in-house teams, and industry consolidation, agencies are being compelled to embrace automation and creator-led strategies while pursuing riskier revenue models. According to a Forrester report, this fight for survival may come at the cost of their traditional role as dedicated client advocates.

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This shift is manifesting in several key trends. The industry is bracing for a new wave of high-profile mergers and acquisitions, potentially including a blockbuster deal involving holding company dentsu. Furthermore, the practice of principal media—where agencies resell media inventory with a margin and guarantees—is going mainstream. With 81% of US B2C marketing executives planning to increase such investments for cost efficiency, Forrester predicts principal media will grow to nearly a third of total agency billings.

Industry leaders such as Michael Beecroft, WPP Media North East Asia CEO, view these shifts not as threats, but as opportunities. “The move away from traditional retainers to project-based engagements, particularly in the data and technology space, is something we've fully embraced,” he said.

Beecroft emphasised that WPP is moving beyond selling hours or charging commissions. Instead, the focus is on delivering tangible outcomes by leveraging global investments in AI. “If a client is willing to provide a specific budget for a defined outcome, then we will work to achieve that. How we structure our teams, our systems, and our processes to get there is our responsibility. This mindset allows us to be agile and responsive to client needs, ensuring that each project delivers clear value.” 

This transition echoes past evolutions. Shufen Goh, president, APAC for mediasense, noted that four decades ago, David Ogilvy predicted a more personalised, data-driven approach to advertising. “Agencies took years to evolve their commercial models to meet this level of accountability,” she said.

Today, AI is creating an urgency that leaves no room for a decades-long adaptation. Goh highlighted the urgent shift from charging based on spend or hours to solution-led approaches built on scalable assets, proprietary tools, and AI-enabled solutions.

On the other hand, Leela Nair, managing director APAC-MEA, Ebiquity, said in the agency review assignments it ran, it saw advertisers looking to ensure the agency models prioritise effectiveness by driving true incremental growth and responsibility by maintaining transparency and ethical standards in media investment. "Designed with care these models can then be auditable via Ebiquity’s Effective and Responsible Advertising (ERA) framework and Ebiquity’s AI Centre of Excellence."

Balancing the algorithm with authenticity

A critical question emerges: How can agencies balance the need for automation with the demand for authenticity in creator-led strategies?

As agencies increasingly embedded AI to automate aspects of their services, human creativity and authenticity remain more essential than ever, Goh said. “Those that master both innovation and creativity will stay ahead, forging genuine connections and delivering measurable, lasting value.” 

“New roles will emerge on both the marketing and agency sides, but until humans deploy and learn, no one has a crystal ball to predict exactly what they will be — and we don’t have four decades to change slowly,” she added. 

WPP’s Beecroft said the AI revolution risks reinforcing a sea of sameness, so he believes in an agency-service approach that employs an 'M-shaped orchestration framework.' “This framework recognises that while AI handles repetitive and data-intensive tasks, human intelligence remains essential for the strategic, empathetic, and creative aspects. It allows us to leverage AI to go beyond mere efficiency to driving true transformation, with our human experts focusing on building genuine connections and providing strategic direction.” 

With the belief that AI is not replacing human output, Beecroft said the human contribution will always be a critical part of our services, as it represents the core value agencies provide, especially in areas requiring nuanced judgment and emotional intelligence.  

“This sentiment applies strongly to the world of creator marketing. Authenticity stems from genuine relationships and understanding the creator's voice and community, which AI can assist with but not fully replicate. The combination of human and artificial intelligence ensures that our strategies are deeply authentic and resonant," he added.

As the industry rolls out AI, increasingly the focus is on viewing AI as an enabler, not a complete replacement of human creativity, said Ebiquity's Nair. "Agencies are using automation to handle data-heavy, repetitive tasks thereby empowering creators to focus on emotionally resonant, authentic storytelling. This approach potentially successfully preserves brand integrity while leveraging AI for scale and efficiency."

Exploring new revenue streams

Nair also pointed out that in response to both AI disruption and increased client insourcing, agencies are doubling down on AI-powered marketing solutions. These include predictive analytics, automated campaign optimisation, and generative content creation, all of which complement in-house efforts and add measurable value.

This added value, she noted, can help agencies justify new revenue streams and enhanced service offerings. Simultaneously, agencies are expanding their roles into strategic consulting—covering areas such as data governance, media accountability, and brand safety—with a strong focus on responsible advertising investment and risk mitigation.

"For several years we have already seeing a prevalence of principal media models and it can be concerning that sometimes advertisers are unaware of the extent that that this model is being applied. In many markets we are seeing 20-30% utilisation of these models," she added.

In today’s 'Intelligent Era,' Beecroft said WPP Media has developed and pursued a proactive approach to cultivating new revenue streams. "We are heavily invested in advanced analytics and data & technology solutions – from audience-segmentation studies and in-depth audience surveys, to custom AI solutions designed to drive campaign activation and deliver performance outcomes."

With AI innovations in search, it also has new solutions around generative search optimisation (GSO), extending its existing SEO services to help clients navigate and succeed in the evolving search landscape, he said. 

"We are also very experienced in creating new agency operating models, given the dynamic nature of an industry that is constantly evolving – increasingly borderless and multi-market, with various stakeholders involved in these modern brand-agency relationships. This in turn means creating new pricing models that move away from traditional service fees only. Increasingly, our media services are compensated based on the value they deliver, reflecting our commitment to tangible results," he added.

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