Why Ad Agencies Keep Adapting Instead of Leading

By Sam Meers

June 26, 2026

Last week my friend Jimmy Keown picked me up in his Tesla and drove us out to see the Royals at Kauffman Stadium. Except Jimmy didn’t really drive. He programmed the destination, took his hands off the wheel, and 20 minutes later we were at Gate 6. No red lights run, no fender benders, no drama. Just a car doing exactly what it was built to do.

I drive an EV from a legacy automaker. I love that car. It handles beautifully, and I’m glad it’s electric. But every time I ride with Jimmy I’m reminded of something uncomfortable: there is a profound difference between a company that was built from the ground up around a new idea and a company that decided to retrofit an old idea into a new wrapper. Tesla was conceived as a software company that happens to make cars. My car came from a company that made excellent combustion engines for a century, then put a battery in one.

Thanks for reading Sam Meers! Subscribe for free to receive new posts and support my work.

The agency business has the same problem.

Agencies will tell you they’ve been changing for decades. And they have, sort of. They adapted when television arrived. They adapted when the 15% media commission came under fire. They adapted to desktop publishing, to digital, to social, to programmatic. Now they’re adapting to AI. But adaptation is not transformation. Adaptation means you survive. Transformation means you lead.

In the golden age of the agency business, agency leaders were in the room with client presidents and CEOs. Not just for campaigns, but for the big questions. Product development. Pricing strategy. Market segmentation. Distribution models. They were genuine business partners, not vendors allocated a budget through procurement.

That seat at the table didn’t get taken away. Agencies gave it up, incrementally, over 50 years, by accepting the marketing budget instead of competing for the strategy budget, by talking about reach and frequency when they should have been talking about margin growth.

You know who filled that room? Deloitte. Accenture. McKinsey. Bain.

Here’s what’s maddening about that: agencies actually have something those firms don’t. Seasoned agency people know clients and their customers with a depth and intimacy that no management consultant can match. They know how to uncover insights. They know how to turn those insights into business strategy, not just messaging. They understand how an idea comes to life from the moment it’s conceived, not after the strategy deck has been delivered and the consultants have caught their flights home.

That’s the real value. And most agencies are leaving it on the table.

So can a traditional agency make this leap? Yes. But it requires intention, not just ambition. A few things have to be true.

First, the agency has to identify the people inside its walls who can hold their own in a CEO conversation, not a marketing conversation, a CEO conversation. Those people exist. They’re often underutilized.

Second, the agency has to clearly separate its consulting and advisory practice from its production and execution business. Not just organizationally, but possibly with a completely different brand. The two things require different mindsets, different talent profiles, and different economics.

Third, and this is where it gets interesting, the margin structure changes entirely. Consulting and advisory work commands far higher margins than traditional agency work. Higher margins allow you to hire differently. You can afford the people who are comfortable walking into a C-suite every single day.

Think of it as a Venn diagram. On one side, what a major consultancy brings. On the other, what a great agency brings. The overlap is the opportunity. An agency consultancy approaches strategy differently than Deloitte. It’s grounded in the consumer from the very first conversation, and it never loses sight of how the idea has to come to life. That’s not a weakness. That’s the whole point.

The agencies that figure this out won’t just survive AI and whatever comes next. They’ll stop putting batteries in combustion engines and start building Teslas.