The advertising agency business model is undergoing its most profound transformation since the shift from print to broadcast. Three converging forces are fundamentally reshaping what agencies do, how they create value, and who survives.
Force 1: AI Automation
- Sora 2, Nano Banana — text to video at scale
- Production costs collapse -1000%
- 7.5% jobs replaced by 2030 (Forrester)
- Coca-Cola AI Christmas ad — 2nd year
Force 2: Platform Power
- Google & Meta self-serve AI tools
- Brands building in-house teams
- Amazon, Walmart retail media — closed-loop attribution
- Retail media to surpass TV ad revenue
Force 3: Consolidation
- $13.5B Omnicom-IPG merger
- FCB, DDB, MullenLowe, Y&R retired
- ~4,000 jobs cut
- “Fight for survival in digital-led world”
The Compression Cycle: 33% margin pressure, 27% cost savings from AI adoption.
This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.








