Are Creative Agencies on the Brink? Insights from Web Summit 2024

The Drum’s editor-in-chief reports from Lisbon, where he hosted a panel discussion on 2025 Vision: The Evolution of Creative Agencies.

[Left to right] Max Lederer of Jung von Matt, Karen Boswell of VML, Gordon Young of The Drum, David Abraham of Wonderhood Studio

Now, let’s cut to the chase: are creative agencies totally f*ed**? This question loomed over our discussion as we explored the impact of an AI gold rush on traditional agency models.

David Abraham from Wonderhood Studios emphasized that while AI offers new tools, the art of storytelling remains a human endeavor. This highlights a troubling paradox: creativity accounts for 95% of an agency's value, yet generates only 5% of revenue. Agencies continue to profit from production and logistics, areas likely to be disrupted by AI first.

Max Lederer from Jung von Matt shared a stark truth: “The old billing models? They won’t survive.” He argued that AI could democratize creativity, enabling unprecedented collaboration between clients and creators. Agencies that cling to outdated revenue streams risk being left behind. The way forward, he suggested, is to embrace collaboration and prepare for an era dominated by user-generated, AI-enhanced creativity.

Karen Boswell from VML offered a pragmatic perspective: “Humans with AI will replace humans without AI.” This isn’t about machines taking over but about enhancing human capabilities. Her agency is transitioning to flexible, cross-functional teams that adapt to client needs, moving away from rigid structures.

However, all panelists acknowledged that the real challenge is not adopting AI, but maintaining the human touch. “Clients think AI means they won’t need creative minds anymore,” warned Abraham, “but that’s a myth.” The real danger lies in agencies becoming so enamored with automation that they lose their essence: genuine human insight.

So, are creative agencies f***ed? Perhaps – but only if they allow it. The future demands agencies to rethink their business models, view AI as an ally, and prioritize creativity. As Boswell wisely stated: “Put your people first and the rest will follow.”

Memorable words that resonate beyond the industry.