Advertising
Age presented content titled, “3 misconceptions fueling pessimism about ad
agencies—and signals that they’re overblown.”
Okay, except
the article is based on a report published by an advisory and consulting firm’s
industry analyst whose CV includes stints as a senior executive at IPG and WPP.
Given that IPG
was erased and WPP
is a flaming dumpster, what is the value of perspectives from a White man
who toiled at such places?
In Adland,
those who can, do; those who can’t, analyze for consultancies.
3
misconceptions fueling pessimism about ad agencies—and signals that they’re
overblown
By Ewan Larkin
Ad agencies
have taken a beating in perception, battered by AI anxiety, restructurings and
a string of layoffs. In a report published today, Brian Wieser, principal at
advisory and consulting firm Madison and Wall, argues the sector is being
misread.
The prevailing
narrative that automation, in-housing and client cutbacks are slowly hollowing
out the agency business is largely a story about a handful of struggling public
companies, not the industry as a whole, Wieser said. His analysis, which draws
on a new data set covering 17 publicly traded agency groups and hundreds of
independent, privately held companies, claims that the industry is more
profitable and durable than many believe.
Ad Age dives
into Wieser’s key takeaways below.
The agency
sector is growing, just not like it used to
The struggles
of agency holding companies including WPP and Dentsu have shaped what Wieser
sees as a misinterpretation of the U.S. industry’s health. Revenue at private
independents—which account for roughly two-thirds of the U.S. agency
business—grew about 2% in 2025, compared to just 0.5% growth across all
publicly listed agencies, Wieser wrote.
“Many people
conflate public companies as being the industry,” Wieser said in an interview.
Excluding
political agencies, which skew industry data in election years, Wieser
forecasts roughly 2% revenue growth annually through 2030, compared to
approximately 1.5% growth in 2025. While that’s up, it’s also a deceleration
from the 4% to 6% growth the industry enjoyed in the pre-pandemic years, which
Wieser acknowledges is unlikely to return.
AI isn’t
gutting the agency business, at least not yet
The inexorable
rise of generative AI has prompted long-term concerns about ad agencies, putting
pressure on the shares of the industry’s biggest players. Agency holding
companies have attempted to quell the damage: Stagwell ramped up its share
buyback program to signal confidence in its growth, while Publicis Groupe
Chairman and CEO Arthur Sadoun drew a sharp distinction between his company and
rivals, which he accused of squeezing margins to please Wall Street.
Wieser sees the
anxiety around AI as overblown, at least in the short term. A Madison and Wall
report published in March, based on direct conversations with senior technology
and strategy leadership at most of the largest agency groups, found that
clients are not cutting budgets in response to AI, but asking for more. “The
tools are real. The investment is real. The financial impact, so far, is not,”
Wieser wrote in the March report.
That agencies’
financial trajectories have arguably improved in 2026 rather than worsened,
Wieser added in today’s report, only amplifies that point. There may come a
time when AI’s financial impact on agencies becomes material, “but we’re still
a long way away from that world,” he added. For now, he argued, agencies have
adapted, deploying AI tools while leaning on what machines cannot yet
replicate, the human judgment and knowledge required to sell ideas.
In-housing
isn’t displacing agencies
Marketers have
been building in-house agencies for decades; the share with internal
capabilities nearly doubled from 42% to 82% between 2008 and 2023, according to
the Association of National Advertisers.
Wieser,
however, argues that the ANA’s figure obscures what’s actually happening: his
own analysis of the trade group’s data suggests those marketers account for
only around 10% of total agency-related work, despite years of in-housing
efforts. “Lost revenues from in-sourcing have likely been offset by growing
revenue streams from emerging marketers who historically performed all
marketing in-house (as most companies do from their earliest stages),” he
wrote.