The news: Marketing leaders say AI adoption can reduce their reliance on agencies—and even cut them out of the loop altogether.

• 83% of marketing leaders would reduce agency spending if they could fully automate content creation, per Typeface’s Signal Report, and 11% would stop using agencies entirely.
• 73% of teams that have successfully adopted AI agents have reduced their content creation spending on agencies.

Zooming out: Agencies’ role in the marketing process is being threatened by emerging AI-powered one-stop shops, such as Meta’s creative content suite.

• The fact that improved automation would prompt 1 in 10 marketing leaders to fully cut agencies out of the creation process raises the stakes for agencies to prove their worth.
• 53% of marketing leaders have already reorganized or redefined roles because of AI, suggesting that brands are dramatically reshaping work that agencies once owned, not just trimming budgets.

The silver lining: Agency contracts aren’t limited to content creation efforts. They still provide a wealth of services that AI can’t easily replace.

• 36% of marketers still turn to agencies for content planning, per 10Fold, and 62% rely on them for AI-enabled paid media.
• Half lean on agency partners for generative engine optimization (GEO) and AI content distribution to navigate evolving search algorithms and manage complex targeting.

What to do: Agencies that market themselves solely as content producers risk being sidelined as automation scales. Those that help clients navigate AI transformation—integrating tools, ensuring data quality, managing governance, and aligning strategy across teams—can promote their value beyond creative output.

Our take: While AI can handle execution, the tasks of strategy, campaign orchestration, and creative planning still require human oversight and thought.

CMOs should maintain agencies for campaign execution and scaling to reap the benefits of their expertise while designing prompts for generative AI (genAI) tools based on brand voice and platforms to automate light-lift content and maximize budgets.