Predictions 2025: Agencies Jettison Legacy Structures To Form New Agency Types
The last 24 months have been challenging for the agency marketplace, with depressed tech spending in the US and global dragging of agency performance. In particular, the start-stop nature of existing or newly awarded brand assignments was a source of financial frustration. Yet 2025 shows signs of optimism, including a strong US economy, agency M&A activity, a resurgence of brand spending, and a growing independent agency market. Combine these factors with the marketing agency industry’s continued efforts to unwind legacy systems and structures — redefining the holding company role, redeploying digital capabilities, combining commerce and media, and separating creative ideation from creative production — and 2025 promises to bring new agency offerings and types to address marketers’ continued remit to do more with less.
Forrester predicts that, in 2025:
- AI-powered content production will decelerate marketing in-housing. The growth of in-house agencies will slow (or the project load will shift) as marketers turn to more cost-effective, AI-powered content production solutions developed by external partners to leverage generative AI (genAI) cost and time efficiencies. Sixty-one percent of agencies currently use genAI in marketing efforts, compared to 17% of in-house agencies. Outsourced content production agencies will deliver low-cost marketing at scale while customizing models to produce bespoke, on-brand marketing for brands.
- One-third of digital media specialists will evolve into full-funnel agencies. The division between performance and brand media assignments collided, and digital media agencies will bridge the gap with full-funnel media capabilities. Barely half of US CMOs plan to integrate performance and brand media assignments, and over a third plan to integrate creative and media assignments in the next 12 months. In 2025, CMOs and agency executives will reconcile full-funnel, full-service capabilities with deep expertise in various disciplines and channels.
- CRM agencies will transform into data-backed CX agencies. To circumvent growing concerns surrounding third-party data compliance and acknowledge that data is attached to execution, data management agencies will reinvent themselves as customer experience (CX) agencies. Breaking away from the constraints of traditional data brokers, these agencies will redefine their previous focus on data sourcing and management into foundational elements of a wide range of activation services including media planning and buying, as well as loyalty and CRM execution.
Modernize Your Agency Model With Contemporary Agency Types
The adage “What got you here won’t get you there” rings true. Next year’s marketing agency landscape will be characterized by new models and offerings, designed to meet the performance/brand meld, scale content to the number of media impressions, match media impressions to sales transactions, and integrate the vital components of marketing ideation with execution. Many current partner structures will lend themselves well to adapt to new needs with slight changes in remit and capabilities. Where possible, give your partners the opportunity to show their expanded offerings. Other partnerships will require you to modernize your model to one that combines the necessary scale/quality; brand/performance; media/creative; and data/CX combinations.
Start Planning Today For What’s Coming Tomorrow
Forrester clients can access our full Predictions 2025: Marketing Agencies report. If you would like to further discuss implications, please schedule a guidance session with me. Be on the lookout for my upcoming Forrester Wave™ evaluation of media management services.
If you aren’t yet a Forrester client, you can download our complimentary Predictions guide, which covers our top predictions for 2025. Get additional complimentary resources, including webinars, on the Predictions 2025 hub.