The expansionary moment: Why AI is the catalyst for agency evolution

Paul Limbrey, Google’s VP of global 3P ecosystem, explores new Google-commissioned research on agency excellence from Boston Consulting Group. He breaks down how agencies can use structural shifts and innovation in the AI era to reclaim their role as indispensable strategic partners.

During my many decades across the tech landscape, from enterprise IT at SAP to the mobile and programmatic shifts at Google, I’ve seen one constant: Whenever technology shifts, marketers look to their partners for the road map.

Today, that shift is AI. But, as the industry navigates this transition, a reductive view is taking hold. Between pundits predicting the death of the agency and procurement teams focused on cost-cutting, many view AI as a tool to circumvent expertise and simplify how work gets done. This perspective gets it wrong. We’re entering an expansionary moment where AI serves as an engine for growth, not a replacement for talent. Across the industry, the agency’s role has never been more critical, provided they are built for this new era.

To explore what defines a high-performing agency today, we partnered with Boston Consulting Group (BCG) to survey nearly 1,000 marketers globally. The findings reveal that the standard for excellence is twofold: intelligent orchestration and deep, specialized expertise.

Intelligent orchestration as the new benchmark

Consumers are searching, scrolling, streaming, and shopping with more velocity than ever, and AI is proving that speed and certainty can go hand in hand. To keep pace, marketers are no longer satisfied with siloed excellence. They don’t just want specialists; they want partners who can navigate the entire consumer journey under one roof.

Yet there’s a significant gap between ambition and reality, which suggests that many partnerships today are falling short. While 81% of marketers want partners to provide integrated capabilities across creative, media, commerce, and earned channels,¹ only 45% feel they are currently integrated across creative, media, commerce, and earned channels.²

The 36-point gap is fueled by friction on both sides. Procurement teams still issue separate RFPs that prioritize departmental silos and exacerbate fragmentation. Many agencies claim to offer end-to-end expertise, while their ground teams remain channel specialists who rarely sit in the same room. For most, “AI transformation” has simply meant siloed tool adoption, not better integration.

The industry is missing a fundamental truth: The unit of transformation is the workflow. In the AI era, a gold-standard partner acts as the connective tissue, using AI to unify fragmented operations into a single, intelligent orchestration layer. For agencies that achieve this, the reward is clear: 97% of marketers indicate they would increase spend with a partner who delivers across these top opportunity spaces.³

The specialized expertise mandate

As AI use cases proliferate, marketers are hungry for specialized capabilities across four key innovation areas: AI-driven creative development and production; AI-driven discovery; digital commerce and agentic buying; and influencer and creator marketing. This innovation is largely funded through reallocation of existing budgets not new or dedicated innovation spend, with only 21% of marketers funding through new budgets versus 45% through paid media and 35% through brand marketing budgets.⁴

Marketers must prioritize partners with deep, native capabilities in these areas. It is no longer just about technical sophistication; it is about choosing organizations with the discipline to move from legacy to AI focused. Most initiatives fail when there is a lack of commitment to the necessary upskilling and hiring, not because the tech is too hard to implement.

The agencies that demonstrate this staffing commitment will capture the majority of new investment. On average, 74% of marketers expect to increase investment across these emerging channels over the next two years.⁵ The budget is there. The question is who has the talent and specialized capabilities to win it.

Many agencies are delivering specialization and enterprise-grade AI systems by leveraging what tech platforms and providers like Google have already built into their products. A powerful example is Publicis Groupe. Facing the monumental goal of growing L’Oréal’s customer base to 2 billion by 2030, it recognized that modern beauty consumers have moved past simple browsing to asking deeply personal, conversational questions.

Publicis used Gemini-powered AI to decode the true intent behind these complex queries. By using AI to understand exactly what people were looking for, it provided a personalized skincare advisory service directly within the search experience, turning ads into helpful, real-time answers that drove 2X more conversions.

What began as a successful pilot in Chile is now being scaled worldwide, proving that when platforms empower agency partners with their best AI, agencies become indispensable architects of growth.

Leadership in the expansionary era

The winners of this era will be defined by their willingness to be the strategic bridge between client goals and emerging technology. By acting as orchestrators who master integrated workflows and new areas of innovation, partners will secure their role for the next decade and beyond.

As the landscape grows more complex, Google remains deeply committed to our partner ecosystem, ensuring agencies have the fluency and tools needed to lead this AI transformation. Efficiency alone won’t drive your business forward. You have to be looking for pockets of expansion.