"With each consolidation, acquisition, or PE investment, marketing agencies' vision moves further away from being providers of agnostic services and creators of culture to purveyors of enterprise platforms and orchestrators of strategy and execution. Put simply, your agencies will no longer act solely as your agents but also as owners of products/solutions, resellers of technology partnerships and developers of emerging capabilities."
"A confluence of factors working together are driving this change, according to Forrester. The nexus of that change: all those factors putting pressure on how agencies charge for services, in turn pressurizing agency structures themselves. Most agencies have long relied on the time-and-materials/FTE/labor-based model, which is getting harder as margins get squeezed from several directions. First, the shift from long-running retainers to "low-margin product-based engagements" is making reliable revenues harder to come by."
2026 will be a year of seismic shifts that will see agencies lose headcount and autonomy. Agencies will resign the agency role and become marketing purveyors that own products, resell technology, and orchestrate strategy and execution. Consolidation, acquisitions and PE investment are pushing agencies away from agnostic service provision toward enterprise platforms and solution ownership. Revenue models will shift from labor-based/time-and-materials and retainers toward low-margin product engagements and media revenues. In-housing has commoditized creative ideation and execution and kept spend inside client organizations. Agency structures and margins will be pressured, forcing business-model reevaluation and reduced staffing.
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