Let’s face it: the agency world isn’t just shifting—it’s doing somersaults. Over the past year, agencies have faced downsizing, economic uncertainty, and the ever-expanding influence of AI. While some are cautiously experimenting and others are ignoring the shifts altogether (ostrich, anyone?), one thing is clear: change is non-negotiable.
For those ready to lean in, 2025 offers immense opportunity. The question is: are you ready to reimagine what’s possible?
The Challenges Agencies Face Today
The AI Boom:
AI is rewriting the rules for how work gets done. Agencies adopting AI have seen a 15.2% revenue boost from generative AI applications (1). Specific tools like ChatGPT have improved worker productivity by 37%, and developer productivity has jumped 55% with coding assistants. The takeaway? Agencies that embrace AI as a teammate are setting themselves up for higher efficiency and profits.Economic Uncertainty:
Budgets are tighter, client expectations higher, and the margin for error slimmer. Agencies must demonstrate clear, measurable value or risk losing out.Demanding Client Expectations:
As your client’s tighten their budgets, there will greater demand for proving ROI. Agencies that are able to demonstrate their value as strategic partners will come out on top.
Search Behavior is Changing:
Consumers are moving beyond Google to AI-driven tools like ChatGPT and Perplexity. If your agency’s content isn’t optimized for these platforms, you’re already missing opportunities.
What Success Looks Like
Agencies that thrive in this new landscape embrace transformation in key ways:
AI as a Collaborator:
Warner Bros. Discovery offers a prime example. By using AI to build a captioning tool, they reduced costs by 50% and cut manual captioning time by 80% (3). Similarly, agencies using AI for workflows, proposals, and brainstorming are finding not just time savings but better-quality outcomes.
Balanced Revenue Models:
Thriving agencies maintain diversified income streams, balancing stability and growth. Many agencies are moving away from purely project-based or retainer-only models. Instead, they’re opting for hybrid approaches, which combine elements of both (2). This allows them to adapt to diverse client needs and market changes, maximizing flexibility and sustainability.
Embracing a Multi-Platform Search Strategy:
Agencies that want to reach new markets need to optimize their content so that it performs well across both traditional search engines and AI tools. This requires creating comprehensive, factual content that directly answers user questions while maintaining natural language patterns that work well with conversational AI interfaces like ChatGPT and Perplexity.
How to Future-Proof Your Agency
1. Embrace AI as Your New Teammate
AI isn’t here to replace creativity—it’s here to amplify it. Whether it’s automating mundane tasks, brainstorming fresh ideas, or streamlining workflows, AI can free your team to focus on what really matters: delivering exceptional results.
Warner Bros. Discovery offers a prime example of the benefit of automating mundane tasks. By using AI to build a captioning tool, they reduced costs by 50% and cut manual captioning time by 80% (3). Similarly, agencies using AI for workflows, proposals, and brainstorming are finding not just time savings but better-quality outcomes.
Tools to start with:
Claude Sonnet: Write draft copy for marketing materials and deliverables
Chat GPT: Gather strategic insights and evaluate/validate your ideas and assumptions
Poe: Compare responses from multiple AI models.
Cassidy AI: Automate workflows and repetitive tasks.
Copilot: Supercharge your development process.
Hubspot Breeze: Streamline sales and marketing efforts
Loom AI: Asynchronous communication, tutorials and automated documentation
Pro Tip: Commit to one AI-assisted task daily to build confidence and momentum.
Free Resource: AI Adoption Checklist
Kickstart your agency’s transformation with our AI Adoption Checklist. This free, downloadable resource walks you through:
Identifying workflows to streamline with AI.
Evaluating tools like ChatGPT, Cassidy AI, and Poe.
Creating a sustainable adoption plan for your team.
2. Reimagine Your Revenue Model
There isn’t a one-size-fits-all solution when it comes to business models. Project based work and retainers both have their pros and cons. But if you’re looking for guidance, I definitely prefer a hybrid approach, which allows flexibility for clients while providing stability for your agency. It’s nice to have a big chunky payday for a large project, but if that project runs over schedule and payment is delayed, it’s nice to have retainer revenue to keep you afloat.
But regardless of the types of clients you have, you should absolutely avoid putting all your eggs in one basket. You want to protect against the scenario where a large client suddenly leaves. I recommend aiming for the following benchmarks:
No single client should contribute more than 20% of your revenue.
Your top three clients should collectively account for no more than 45% of your revenue.
Smaller clients (each contributing at least 5% of revenue) should make up the rest.
You likely won’t get there overnight, but if you aim to hit these benchmarks, it will help you to identify which clients to retain, upsell, and offboard over time.
3. Invest in Your Team’s Resilience
Your team needs to see change as exciting, not scary. Leadership sets the tone—when you’re eager to experiment, trust that your team will follow suit.
How to build resilience:
Encourage peer-led learning. Have your team create video tutorials with tools like Loom to share how they’re using new tools in their day-to-day work.
Celebrate wins and (constructive) failures. Mistakes are just lessons in disguise.
Invest in affordable platforms like Coursera, Skillshare, or Udemy for continuous upskilling.
4. Become a Strategic Partner
Clients want more than deliverables—they want someone who gets it. Being a strategic partner means asking the right questions and aligning your work with their long-term goals.
Start every client conversation with:
“What business metrics matter most to you right now?”
“How can we help move the needle on those goals together?”
When you’re proactive and aligned with their vision, you’re not just another agency—you’re indispensable.
5. Embrace a Multi-Platform Search Strategy
Increasingly people are starting their search journey through AI chat, this is particularly true of the younger generations (4). We should expect this not only to increase over time, but to accelerate rapidly. To remain visible across both traditional search engines and AI-driven tools, agencies must adapt their content strategy. Luckily there is some great advice out there from Fountain City on how to do just that (5).
Key Steps to Get Started:
Update Existing Content: Refresh high-performing pieces to align with conversational AI patterns and ensure they directly answer user questions.
Build Genuine Authority: Share expertise through thought leadership, case studies, and original research to position your agency as a trusted resource.
Understand Platform Influence: Identify which platforms power AI assistants (e.g., Bing for ChatGPT, Google Bard) and optimize for those ecosystems.
FAQs
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AI can help agencies reduce costs and boost productivity by automating time-consuming tasks like data analysis, content generation, and client reporting. Tools such as Claude or ChatGPT can assist in crafting creative content, while AI-driven platforms like HubSpot Breeze can enhance marketing automation. To maximize impact, agencies should view AI as a collaborator, not a replacement—allowing teams to focus on strategic, high-value work while the AI handles routine processes. Investing in tailored AI tools and training ensures your team can adopt these technologies effectively.
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A hybrid revenue model is ideal for balancing flexibility and stability. Combining retainer agreements with project-based work provides predictable income while allowing for one-off, high-margin opportunities. Aim for diversified revenue streams where no single client accounts for more than 20% of your income. By doing so, you protect your agency from financial instability if a major client leaves.
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Adopt AI as a partner: Stay ahead by exploring tools that enhance client outcomes and internal efficiency.
Diversify revenue streams: Protect your bottom line by avoiding overreliance on a single sector or client.
Invest in your team: Provide continuous upskilling opportunities to prepare them for emerging trends.
Evolve with client needs: Stay attuned to industry shifts and adapt your services to address them.
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To optimize for AI search tools, prioritize conversational, question-driven content that directly answers user queries. Use structured data like FAQ schema to make your content AI-readable and include clear, concise answers at the start of your posts. Focus on long-tail keywords that mimic natural language, such as “How can agencies improve client retention with AI?” Additionally, ensure your site is well-organized and fast-loading, as AI-driven tools prefer high-quality, user-friendly sources.
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Resilience starts with communication and trust. Regularly share updates on changes and involve employees in shaping the path forward. Offer targeted upskilling in areas like AI and data literacy to equip your team with tools for success. Foster a culture of peer support and collaboration by implementing mentorship programs or cross-departmental projects. Finally, address burnout by promoting work-life balance through flexible scheduling or mental health initiatives, ensuring your team stays motivated and engaged.
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In 2025, agencies will face:
Increased reliance on AI: Agencies must embrace AI tools or risk falling behind competitors.
Economic uncertainty: Diversifying revenue streams and improving operational efficiency will be crucial.
Shifting client expectations: Clients will demand measurable ROI and personalized service.
Changing Search Behavior: Marketing plans will need to include strategies for ranking in AI search results.
To prepare, agencies should prioritize agility—testing new tools, refining processes, and staying informed on industry trends. Being proactive will keep your agency ahead of the curve while competitors struggle to adapt.
Let’s Future-Proof Your Agency Together
Navigating the challenges of 2025 doesn’t have to be overwhelming. Together, we can create a plan to make your agency more innovative, resilient, and profitable.
Book a free 30-minute consultation to:
Audit your agency’s operations and AI readiness.
Identify opportunities to streamline and scale.
Build a plan for measurable growth in 2025.
Author Bio
Katie Bedford is the Founder and CEO of K Bedford Consulting, a trusted advisor to digital agencies navigating the complexities of growth, innovation, and operational excellence. With over a decade of experience helping agencies streamline their operations, embrace emerging technologies like AI, and future-proof their business models, Katie is a thought leader in agency strategy. Known for her approachable yet insightful guidance, she has a proven track record of empowering agencies to adapt to change and achieve measurable success. Katie’s expertise stems from hands-on experience and a deep understanding of the evolving challenges agencies face, making her a sought-after partner for forward-thinking businesses.