In 2025, Unilever built an in-house AI studio that produced creative assets 30% faster across 18 markets. Then they signed a five-year AI infrastructure deal with Google Cloud covering brand discovery, measurement and marketing. Unilever spends £7.8 billion on marketing annually. Shocked? Surprised? Don’t be.
If the world’s biggest brands are doing this, chances are some of the smaller companies, perhaps your own clientele are also watching. The move in-house for amounts that were once spent on external agencies is definitely happening. Agency owners will be noticing this in multiple ways – perhaps retainers are slowing or drying up, clients saying design or work has been brought in house. These are all tell-tale signs and the writing is starting to appear on the wall.
We work with agencies every day. We see the numbers up close, month by month, across different types of agencies at different stages of growth. And over the past year, a pattern has started showing up consistently enough that it felt worth writing about.
The marketing budgets are still there. How they are being spent has changed
Clients are not cutting marketing budgets. If anything, the opposite is true. Influencer marketing spend grew 171% year on year according to CreatorIQ’s 2025-2026 State of Creator Marketing report. The global influencer marketing industry has hit $32.55 billion in 2025. There is real money flowing in this market.
But nearly two thirds of that growth came from budgets being reallocated away from traditional channels: TV, display and in many cases, agency retainers. It is moving toward AI tools, virtual content production and in-house teams who believe they can now do it themselves.
The question we find ourselves asking on behalf of our agency clients is not whether there is money in the market. There clearly is. The question is whether it is still flowing toward you or whether it is taking a different route than usual.
The changes we are seeing in the numbers
Agency P&Ls are starting to show differences from what used to be traditional culprits. Margins are tighter across most client groups. Retainers come with more stringent requirements from clients – shorter periods, break clauses that are a bit too close for comfort and the like. Scope conversations with clients that used to be straightforward suddenly need multiple rounds. Clients expect more reassurance than ever before and the time spent on all of this never gets billed. The BenchPress 2026 report, which benchmarks over 800 UK agency owners who had revenue under £1M and which we find genuinely useful reading, found that average gross profit rose from 36% to 41% last year. That is good news. But the same report flags that AI has made delivery faster but the savings are not always staying with the agency. A quarter of agencies say clients now expect to pay less because of it and a third say clients have started bringing work in-house. Agencies seem to be doing more but earning the same or less.
If your service mix is toward content production, social management or anything AI can now generate within fraction of the cost, changing buying habits will start to show up in your numbers. If you have the numbers to track, look at them in consistent detail.
The opportunity that agencies can capitalise on
Here is the other side of this and AI has made content production cheap and easy to create. What it has not replicated is judgment, accountability and trust. At least not yet. And brands who have tried to go it alone are finding that out in ways that are costing them real money.
A 2026 audit found fraudulent activity across influencer platforms were at 41.3%, with AI-generated bot networks driving most of it. Brands are losing an estimated $4.1 billion annually to influencer fraud. And one in three brands unknowingly paid a fully AI-generated fake influencer persona at least once last year. These numbers are huge if you think of it. (Amra and Elma, Top 20 Influencer Fraud Statistics 2026)
The agencies we see doing well in this environment are not the ones treating AI as a threat or trying to pretend it does not exist. They are the ones who have embraced it deliberately, using it to deliver faster, sharper work while keeping the human layer in place where it actually matters. Strategy. Brand thinking, or even just basic human judgement. As the founder of Nvidia, famously said – the people who can see around the curve will be valued most. And agencies can be just that – use AI and get work done fast, but also be that human silver ball that sees or can envisage things before they happen. AI handles the production and gives teams the freedom to test scenarios they simply would not have had the bandwidth to explore it before. The human layer then takes those possibilities and turns them into something that actually means something to the client and their targeted audience.
At the end of the day people always buy from people. A good rapport is where the agency value argument not only survives the current shift but actually gets stronger as it evolves. A client who tried to do it all with AI and discovered what they were missing is a client who now understands the difference.
But it only holds if you are building that positioning deliberately into how you work and how you price, rather than hoping the client figures it out on their own.
The billing conversation
The important bit of any project, if your team can now produce in two hours what used to take hours, perhaps days and weeks but, time-based billing creates a structural problem. Either revenue per project falls because the hours are fewer, or the client asks why the hours have not come down. The conversation is worth having internally, before a client forces it, is around how the work is priced in the first place. Outcome-based pricing is one route worth exploring. Rather than billing for the time it takes to produce something, you are billing for the result it delivers. A campaign that generates a measurable return. The value is in the outcome, not the hours behind it. It is not a new idea but it is one that makes considerably more sense in an AI-enabled environment than time-based billing does.
Retainers built around scope and value rather than hours are another option. The relationship stays but the pricing logic changes from tracking time and toward agreeing what success looks like and charging accordingly.
Neither of these transitions is without complexity. How revenue gets recognised changes. Cash flow timing changes and can be fraught with issues if you have not figured out internal processes that can plug in scope creep.
AI can augment scoping easily and better than humans
What you need to know before a pricing document leaves the building can be pieced together by basic AI tools now. So there is no excuse in not doing that research. While researching prospects, checks for:
- Their financials on companies’ houses, perhaps you can have clues about their revenue and people capacity.
- Look at marketing spend if easily available, if the client is large they will be filing their profit and loss account and will be available for reading
Have open and honest conversations with your clients – what would make this valuable/ workable for them? Sometimes people are refreshingly honest about their circumstances and what they are willing to spend, with the caveat that you come in cheaper.
Conclusions
We are all part of a new world – one where the quality of the product delivered is sometimes less important than the speed and cost at which it’s being done. Unlike legal or accounting services, there is no compliance risk a client will suffer if a product design looks less admirable than before. Reputational and branding risk – certainly. But it takes a company of a certain size to be able to see that through. The best bet is to become an agency that uses AI but is led by human intuition.
Whilst you get there, don’t let your numbers suffer. We have written more on the financial foundations agencies need to have in place in our guide to building a scalable finance function and in our due diligence piece for growing agencies, both of which are worth a read if any of this is useful landing close to home.
If you want to talk through what this means for your agency specifically, we are always happy to have that conversation.
Note: This article is meant for information only and not meant as advice. Please consult a professional for your specific case for clarification of doubts.
