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In the AI era, the traditional agency model is under huge pressure, Clients are demanding more value and greater efficiencies, requiring agencies to move beyond execution and prove high-value, strategic worth.
We partnered with BCG on research that reveals a critical gap: On average, agencies are 35% more advanced than advertisers across a broad swath of marketing use cases, from measurement and insights to creative and content.1 But only 42% of advertisers believe their agency has helped educate them on AI solutions.2
The research also looked at how leading agencies are using AI to build their advantage. They aren’t just adopting tools. They’re transforming their foundations, their operations, and client solutions to overcome this pressure and win today.
Globally, leading agencies report new business growth 1.6X higher than their peers at earlier stages in the last 12 months; efficiency gains 2.6X higher than their peers at earlier stages in the last 12 months; and profitability growth 1.1X higher than their peers at earlier stages in the last 12 months.3
To drive profitable growth in 2026, agencies must execute three strategic plays:
Shift to value-based models
The play: Instead of trading time for money, focus on monetising the value you bring to your clients. Combining tech and performance-based fees is the clearest path to a value-based model.
The payoff: Unlocking profitability. Tech-based fees create recurring revenue and performance-based fees are the clearest way to monetise AI value, for agencies of all sizes.
The proof: In the next 3 years, leading agencies plan to spend nearly half (48%) of their time on data & tech services (e.g., data and tech consulting, licencing tech solutions), while expecting data & tech fees (e.g., licencing and SaaS fees) to comprise 32% of their revenue mix.⁴
Actionable example: Pilot a SaaS tool and turn a one-time service into a recurring revenue stream. Offer a white-labelled or proprietary AI tool for external use on a monthly subscription.
Establish a data-enabled tech capability
The play: Use technology and infrastructure to leverage data for insights and activation, and build your AI advantage from this.
The payoff: Building a robust base. Creating defensible AI foundations are critical for developing and scaling long-term AI capabilities.
The proof: Leaders are investing for the long-term, with plans to spend nearly half their time (48.2%) on data and tech services within the next three years.5
Actionable example: Audit your stack and commit to a unified technology approach – so that data can flow seamlessly from insights to activation, regardless of your agency’s size.
Invest in scalable pilots
The play: Move beyond superficial AI demos and focus investment on small, measurable pilots. This will quickly demonstrate client value and ROI and differentiate you from the competition.
The payoff: Surviving and thriving the disruption. This is the fastest way to de-risk adoption and secure new business.
The proof: Leading agencies have scaled AI for nearly 3X as many marketing use cases across campaigns and accounts, as compared to their peers at earlier stages.6
Actionable example: Approach a key client with a co-invested proof of concept to validate AI’s efficiency in quantifiable areas, such as automated reporting or bid optimisation, to prove value before scaling.
How Google can help
It’s imperative for agencies to move quickly to avoid being left behind. And while the pace and scale of change may feel daunting, we’re here to help. We’ll be continuing to share ways that can help you win with AI in three key areas:
- Accelerating creative asset production to ensure your clients show up where their customers are
- Creating, capturing, and converting demand as consumers search, stream, scroll, and shop on Google and YouTube
- Effectively measuring ROI to demonstrate your value to your clients
Get started today with our suite of AI-powered products, tools, and resources:
Accelerate performance
Leverage AI-powered solutions like AI Max for Search campaigns, PMax, and Demand Gen to drive client ROI and efficiency.
Supercharge creative
Use generative AI tools like Veo and Gemini to scale asset production, ensuring your clients are prepared for the AI-first era.
Build data strength
Access key platforms like Data Manager and Google Analytics to build the defensible, unified data core required for an enduring AI advantage
