The Remaking of the Agency Business Model
Premium Report
The advertising agency business model is undergoing its most profound transformation since the shift from print to broadcast.
Three converging forces—AI automation, platform disintermediation, and industry consolidation—are fundamentally reshaping what agencies do, how they create value, and who survives.
The stocks tell the story: WPP has plunged 62% in 2025 and is dropping from the FTSE 100 after 27 years, while analyst ratings for Publicis hit multi-year highs. This divergence isn’t random—it reflects a structural bifurcation between agencies adapting to the new reality and those clinging to legacy models.
The core thesis: AI commoditizes production but increases strategic complexity. Agencies that pivot from making ads to orchestrating AI-generated campaigns across fragmented platforms may emerge stronger. Those who sell hours and bodies face existential pressure.