CANNES -- Over the last few days here, I’ve had
conversations with fellow agency leaders, marketers, tech companies, and industry partners about a question that seems to be hanging over every agency right now: what does the next version of the
agency business look like?
Here are a few key themes and takeaways that have stood out to me.
Output Over Hours
More agencies are thinking about the evolution
of their business models.
In the past, agencies were often paid based on media-buying, retainers, or billable hours. That’s not changing overnight, of course. But increasingly,
we’re seeing a shift toward output-based models. We get paid for delivering X and Y. How we get there matters less, as long as we deliver the agreed-upon output.
I think that’s a
smart pivot, although it may take time to be adopted more broadly.
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It requires historical data, for example, to accurately price work based on deliverables rather than time.
Still, I
believe this model is much more likely to gain traction than a purely outcomes-based approach, where “outcomes” can mean 20 different things to 20 different people.
The
Real Cost of AI
AI costs money. Are you shocked?
Just three months ago, hardly anyone in advertising was talking about token costs. Now, rising token expenses, wasteful AI
usage, and new studies showing that AI’s promise isn’t always translating into expected ROI are forcing advertisers and brands to think more carefully about costs.
That’s
actually a good thing for agencies. Previously, many brands were quick to throw AI at every problem and campaign.
Going forward, being more intentional about AI adoption and usage should become
the norm. That creates a massive opportunity for agencies to serve as consultants and trusted advisors.
It also means some agency work may be more protected from AI cannibalization than many
people assume.
DEI Vital, Yet Veiled
We’re in a strange moment in marketing where DEI is arguably more important than ever. Consumers want to connect with
authentic people from a wide range of backgrounds, and pretending diverse communities aren’t influential audiences and powerful buyers is absurd.
You can see diversity everywhere at
Cannes Lions this year — on panels, in creator partnerships, and throughout the event. Yet many companies are not talking openly about the value of diversity, seemingly driven by concerns about
regulatory or political backlash.
It will be interesting to see how things evolve over the next year and whether Cannes 2027 looks dramatically different and becomes more explicit in its
already strong embrace of DEI.
Mechanize Process, Not Craft
AI is an existential question for agencies, although not necessarily an existential threat.
It’s interesting to think about how agencies can continue to use AI to improve operations and efficiency. At the same time, one theme I’ve heard repeatedly during Cannes is that
creative work should remain largely sacrosanct.
AI can help optimize creative, drive scale, and adapt content for different audiences, but the creative work itself is still valued because it
requires the judgment, creativity, and expertise that great agency work demands.
The broader philosophy was essentially mechanize process, not craft.
None of these conversations
produced definitive answers, and that’s probably the point. The agency business is in the middle of a significant transition, and many of the old assumptions about pricing, operations, talent,
and tech are being challenged.
What struck me most, however, is that despite all the discussion about AI, the conversation often comes back to very human things: creativity, judgment,
relationships, trust, and authenticity.