Growth lessons from 2 years of interviewing agency leaders
The good news is brands are investing.
The latest Advertising Association (AA)/WARC Expenditure Report forecasts the UK ad market will grow 8.2% overall this year to £50.5bn, before rising a further 5.9% to £53.5bn in 2027, suggesting marketers remain willing to invest despite ongoing economic uncertainty.
The bad news is that agencies remain stuck in a lot of bad habits or traditional ways of operating.
These agency zombies preach growth to their clients while they remain focused only on short-term solutions. Within the “Age of More”, agencies need to get their sh*t together more than ever.
As discussed with Omar Oakes, Founding Editor of The Media Leader, growth is no longer a happy accident born of “throwing things at the wall.” It is a product of design.
Staying resilient when conditions fluctuate means finding the structural problems and planning for the long term vs papering over cracks, which eventually brings the house down.
Across nearly two years of 300 Seconds on Agency Growth, we’ve seen three themes surface in almost every conversation. All three represent significant opportunities for agency leaders.
- Stand for something distinctive
The bar is not especially high when it comes to agency propositions. Walk into any credentials meeting, read any agency website, sit through any pitch and the language blurs into one. Andy Nairn, Founder of Lucky Generals, calls it ‘trademark nonesense’.
In a market where clients are scrutinising agency rosters more carefully, a proposition that is genuinely clear and specific stands out sharply against that backdrop.
Simon Francis, Founder of Flock Associates, called a strong positioning “the organising principle at the intersection of what clients value, what competitors lack, and what your people believe. It should comfortably repel the wrong clients and attract the right ones.”
When agencies make a deliberate choice about what they stand for and use that as a filter for every decision allows them to know who they go after, who they pitch to, what work they take on and which clients they walk away from. That discipline creates compounding advantages over time because keeping your current clients, retaining your people and winning more new business all become more efficient when there is a clear proposition underneath.
Sally Weavers, co-founder of Craft Media London, described the opportunity precisely when she joined us on the podcast. She identified what she calls the “tions” trap, where agencies fill their positioning with “optimisation, personalisation, distribution and integration” words that mean something individually but say nothing when every agency in the room is using them simultaneously. Escaping that trap, in her view, is one of the highest-value moves an agency leadership team can make.
There is a vital distinction to be made – differentiation is for products, but distinction is for brands. While agencies try to be “different” by piling on more services, the resilient agency wins through the radical act of simplification.
The commercial case is straightforward. A strong brand commands a 20 to 30 per cent price premium according to Interbrand’s research. Getting the proposition right is one of the most direct routes to better margin available to an agency leadership team.
- AI approached effectively
The mood around artificial intelligence in agencies has shifted meaningfully in the past twelve months. The anxiety has given way to something more practical and more optimistic – a genuine confidence that the technology, applied well, creates competitive advantage.
The agencies that have been clearest about what it is for and how it fits into the way their people work have found serious efficiencies. That clarity is what separates AI as a genuine capability builder from AI as a cost-cutting exercise.
The opportunity we see consistently is in how agencies use the time the technology returns to them. “The research, the exploration, the preparation, the two-thirds of a pitch process that happens before anyone is in the room, can be transformed by AI tools used well” is exactly the sentiment Hannah Baker from Brave Bison shared in our conversation.
That time, saved and reinvested in the thinking, the strategy and the creative work that actually wins clients, creates a compounding advantage in every pitch situation.
Emma and Jules Love, Founders of Spark AI, champion the “Think. AI. Think” process. You must have your own ideas first; if you engage the AI too early, you constrain your thinking to its predictable outputs. As David Indo from ID Comms notes, pitches are won on “charm, empathy, and confidence” human traits no algorithm has mastered.
AI is not going to take agency jobs, but the person who knows how to use it effectively probably will take the job of the person who does not. For agency leaders, that is an invitation to invest in training and capability rather than simply in access to tools.
- Outcome-based pricing is the holy grail
The move away from time and materials pricing has been discussed for years. What has changed is the pace at which it is becoming both possible and necessary, and the opportunity that creates for agencies willing to move ahead of the curve rather than waiting until they are pushed.
The argument for change is straightforward. In a market where artificial intelligence can compress into hours work that once took weeks, pricing by the hour creates a structural problem. The more efficient you become, the less the model rewards you for it.
The most progressive independents are getting there. That’s a view we shared in a presentation to a large investment bank recently on how media agencies make money.
Ryan Kangisser, Chief Strategy Officer at MediaSense, described the practical path clearly when he joined us. His view was that the transition to outcome-based models requires agencies to first do the internal work: understanding what their services genuinely cost to deliver, being transparent with clients about how they generate revenue and building the commercial confidence to price against impact.
Ultimately, David Muldoon from Ebquity, believes that a contract can no longer be something that is signed and put in a drawer for three or four years until it is time for renewal. Driven by ongoing technological integrations and variable outcome-based fees, contracts must now be treated as living, breathing documents that are constantly referenced, iterated on, and updated throughout the relationship.
Bringing it all together
All three themes are expressions of the same underlying opportunity. It belongs to an agency that knows what it is worth and has built the confidence and discipline to behave accordingly.
The agencies that use this moment to get the fundamentals right will grow most confidently through whatever comes next. That means a clear proposition, a thoughtful approach to AI and a commercial model that reflects their true value. That’s commercial resilience, turning ambition into predictable commercial momentum for the long-term.
We’ve got more conversations to come and more learnings to share!