This system is being eaten by AI and consulting firms — and deservedly so

— Inside the 4A advertising world (Part 3)

TL;DR

• Over the past 10 years, the global advertising pie has grown, but the slice going to agencies has kept shrinking
• What ad agencies actually sell is three things:A system for observing decision-making behavior, deep industry-specific client knowledge, and cross-disciplinary integrated execution capability— Once sold bundled, now available à la carte
• The first is being eaten by AI AI (what I'm doing myself: encoding 8 advertising textbooks + 6 major methodologies into knowledge modules)
• The second is being eaten by Accenture/Deloitte consulting firms (entering clients via "digital transformation," then acquiring ad agencies)
• The third is being eaten by Meta/Google/TikTok platforms(the bar for integrated execution dropped to where one marketing specialist can handle it)
• The 4A system deserves it:Methodology packaging has been used to mask declining delivery quality
• Only two kinds of firms will survive: top-tier creative studios, or service providers deeply integrated into client operations

This is Part 3 of the four-part series "Inside the 4A Advertising World" · Series navigation ↓

In 2018, I attended a talk in Taipei given by the APAC Strategy Chief of a major 4A group. He spoke for an hour about disruption, transformation, and data-driven creativity. Three hundred ad professionals sat below, taking diligent notes.

At the Q&A, a young man raised his hand and asked: "What was your firm's revenue growth this year?"

The Strategy Chief paused for three seconds and said: "I'm not at liberty to answer that. But I can tell you we are on the transformation journey."

The audience laughed — they thought he had dodged the question skillfully.

Seven years later, in 2026, looking back, that wasn't a skillful dodge.That was the moment this entire industry collectively entered its downward cycle。

The numbers don't lie

Let me lay out a few numbers.

Over the past decade, the revenue growth rate of the global advertising agency industry has never outpaced the growth rate of total global ad spending. In other words,The advertising pie has been growing, but the slice agencies receive has been shrinking。

Where did the difference go?

Part went to media platforms like Google, Meta, TikTok, and Amazon. Today, more than two-thirds of clients' media budgets are spent directly on these platforms — what used to flow through media agencies is now done with one click in the platform backend. GroupM, OMD, and other media units were once the most profitable parts of the 4A groups; now they've been drained by the platforms.

Part went to clients' in-house teams. McDonald's, Nike, Unilever, P&G — the biggest agency clients of a decade ago — now each maintain internal creative, data, and social teams of twenty or thirty people. Why? BecauseSpeed has to be fast, budgets have to be tight, and brand assets have to stay in-house。

The remaining part has been carved off by consulting firms. Accenture Song, Deloitte Digital, IBM iX, Capgemini Invent — these firms that used to do IT consulting and digital transformation have aggressively acquired ad agencies over the past five years, and are now among the largest "advertising groups" in the world.

And then AI arrived, hollowing out what was left of the agency foundation from below.

What ad agencies actually sell

To understand why this system is collapsing, you first need to understand what ad agenciesactually sell。

It's not creativity. Creativity is the surface.

What ad agencies have sold for the past century is essentiallythree things:

First: A system for observing human decision-making behavior. How to get people to notice, remember, be moved, and take action — this body of knowledge, from Reeves to Ogilvy to Aaker, has accumulated for a century. It's real expertise.

Second: Deep knowledge of specific industry clients. An agency that's served household chemicals clients understands their pain points, knows how to deal with retail channels, and knows how to manage the tension between global HQ and local markets. An agency that serves financial clients understands regulatory constraints and knows how to create warm communication within strict rules. This is know-how.

Third: Cross-disciplinary integrated execution capability. From strategy to creative to production to media to performance measurement — one continuous chain. Coordinating copywriters, art directors, producers, directors, media planners, researchers, account services, legal, finance — so many roles — and delivering on budget, on time, and on quality. No single genius can do this alone. It's organizational capability.

For the past hundred years, agencies could charge premium prices becausethese three things were sold bundled together, and you couldn't get one without the others. When a client wanted to run a brand campaign, there was no alternative — they had to hire a firm that had all three.

The problem is that these three thingscan now be purchased separately。

The first is being eaten by AI

The system for observing human decision-making behavior — this knowledge used to be locked inside paper decks, in the heads of senior planners, and in award case study video libraries.

Now AI isencoding all of it。

This is exactly what I'm doing. I've fed 8 advertising textbooks, the methodologies of the 6 major global holding groups, and 29 academic theories — AIDA, ELM, USP, Brand Resonance Pyramid, Positioning Theory, Brand Equity Model… — into a system, encoded as callable "knowledge modules." A brand manager opens the system, enters a brief, and the system can use the ELM model to judge category involvement, the USP framework to evaluate claim strength, the R.O.I. triangle to assess creative quality, and the AIDA structure to generate a five-act content script.

What used to take a senior planner three weeks to analyze, AI can now produce as a structurally complete first draft in thirty minutes.

And this is only phase 1. Once multi-agent systems mature, this system can run 8 agents in parallel: the MD agent takes the brief, the AE agent breaks it down, the Planner agent develops strategy, the CD agent guides brainstorming, the CW agent and AD agent produce 3–5 concepts in parallel, the Research agent designs concept testing, and the Producer agent assesses feasibility. The entire collaboration of a brand team, encoded as an automated workflow.

This isn't science fiction.This is happening right now。

Agency executives obviously know this is happening. So they're investing in AI, acquiring ad tech companies, and building data teams. The problem is —They can never understand AI better than AI companies, just as AI companies can never understand creativity better than ad agencies。

But the outcome isn't decided by "who understands it better" — it's decided by "who the client chooses."

If a client can get 80% of the quality of a strategy document from an AI system at one-tenth of the cost, why would they still pay an agency NT$8 million? Unless that remaining 20% of quality can earn them back the other NT$7.2 million.

That remaining 20% used to be "the insight of a senior planner" and "the judgment of a Creative Director." These things still exist, but AI is narrowing that 20% gap. Every bit it narrows, the agency's pricing power gets squeezed a bit more.

The second is being eaten by consulting firms

Deep knowledge of specific industry clients — this was once the agency's moat. An agency that has worked in household chemicals for twenty years understands P&G's internal processes, Unilever's brand portfolio, and the unwritten rules of Chinese retail channels better than any consulting firm.

But what Accenture and Deloitte have spent the past ten years doing istunneling straight through that moat。

Their path is simple — first they get in under the name of "digital transformation," helping clients with systems integration, CRM, e-commerce platforms, and data hubs. After completing these IT projects, they understand the client's internal processes, business logic, and pain points better than the ad agency does.

Then they start acquiring ad agencies. Accenture acquired Karmarama, Droga5, and IMJ; Deloitte acquired Heat, Kettle, and Acne.What they bought wasn't creativity — it was execution capability— so the client knowledge they had accumulated could be monetized as advertising business.

For the client, the logic flows naturally: "I'm already doing digital transformation with Accenture, my data lives in their systems, they understand my business logic best — so why would I hire a separate ad agency? Just let Accenture Song handle it too."

The only counter-argument the agency has is "but our creative work is better."

The problem is,how many CMOs would actually break apart an integrated supplier ecosystem just because of "better creative"?

Few.

The third is being eaten by platforms

Cross-disciplinary integrated execution capability — this was something agencies had a seller's monopoly on.

But over the past five years, Meta, Google, and TikTok did something the ad agencies didn't notice —They lowered the barrier to integrated execution to where one brand manager can handle it alone。

In the past, to run an integrated campaign, you needed an agency to write the strategy, a production company to shoot the film, a media agency to buy placements, a research firm to handle tracking, and a PR firm to issue press releases. Each step took time, money, and coordination.

Now you open Meta Business Suite, and you can — generate image and video assets with AI (still pretty bad), automatically test 50 versions, automatically find the most effective audiences, automatically optimize delivery, see real-time performance reports, and dynamically adjust based on results. The entire workflow,one marketing specialist who knows the backend, plus a few outsourced designers, can run it。

For small and mid-sized brands, this is already good enough.

For large brands, their in-house teams keep growing, their automation tools keep getting stronger, and the portion that needs to be outsourced keeps shrinking. What's left to outsource is two things — either truly major brand campaigns requiring world-class creativity (this part stays with a handful of top-tier agencies), or large volumes of routine, fast-turnaround execution work (this part goes to cheap boutique agencies and freelancers).

The middle layer — the "mid-budget integrated services" that traditional 4As depend on — is being squeezed into nonexistence.

Why this system deserves it

When I say "deserves it," I'm not gloating. I'm describing this industry'sstructural failure。

Over the past twenty years, the biggest mistake of the 4A system was —using methodology packaging to mask the decline in delivery quality。

I've watched too many agencies make ever-thicker pitch decks, with ever more obscure methodology names and ever-longer strategy documents, whilethe ads people actually remember keep getting fewer. Cannes winners are increasingly public-service work, "fake ads" that never actually run, or concept pieces made just to win awards. Cases that actually deliver commercial numbers and grow brands keep getting fewer.

Over the past twenty years, this industry has gonefrom "we help you make effective advertising" to "we help you produce a decision-making process that looks methodologically sound"。

Clients bought twenty years of "proof of decision-making rationality." Eventually they realized —I can put together an in-house team that produces the same proof, and even tailor it more closely to my business. Clients eventually realized —The strategy Accenture builds using my actual business data is closer to reality than the strategy an agency makes from thin air. Clients eventually realized —The analysis an AI system can produce in an hour and the analysis an agency produces in three weeks differ not in analytical depth, but in deck thickness。

The day clients realized this, the 4A system began to collapse.

That day has arrived.

What's left

But I'm not saying advertising will disappear entirely. Advertising won't disappear, andnot all ad agencies will disappear either。

What's left will be two kinds of firms.

First: Top-tier studios whose true core competency is creativity. Small in size, few in headcount, premium in pricing, working only with the most elite clients. Wieden+Kennedy, 72andSunny, Mother, BBH — these firms will continue to exist, because what they sell isn't a "decision-making process," it'screativity that genuinely moves people, sells products, and seeps into culture. This capability is something AI can't replicate in the foreseeable future.

Second: Service providers deeply integrated into client business operations. No longer "external agencies" but "part of the client's ecosystem." Accenture Song is going this direction, IBM iX is going this direction, and client in-house teams are going this direction. What they sell isn't advertising — it'scomplete solutions for business growth, with advertising as just one execution lever among many.

The middle ground — "traditional 4As stuck somewhere in between" — with beautiful offices, famous group names, and thick methodology decks, but neither top-tier creative output nor deep business integration —these firms will be cleared out of the market one by one。

The waves of layoffs across the major holding groups over the past two years are just the beginning of this process.

What this means for you

If you're still in this industry —pick a side. Either push yourself toward becoming a true creative craftsman, or push yourself toward becoming a deep partner in your client's business. The middle path is a dead end.

If you're on the brand side —rethink your relationship with your agency. Stop buying "decision-making process" and start buying things that genuinely grow brand value. Either hire a top-tier studio for a few key hero cases and handle the rest with AI and in-house resources; or find a deep partner to work with at the business-fundamentals level. The "outsource a whole integrated services package" model is obsolete.

If you're like me, someone trying to rebuild this system with AI —you're not "replacing ad agencies"; you're "liberating the genuine expertise that ad agencies have hidden behind methodology". The value of an AI system isn't replacing senior planners — it's enabling small and mid-sized brands, startups, and in-house teams without the budget for a senior planner to access the same quality of strategic thinking.

In this century-old advertising system,what's truly valuable has never been the organizational chart, the methodology names, or the holding-group endorsement — it's the body of knowledge for observing human decision-making behavior. That knowledge deserves to be preserved, passed on, and opened up to more people.

As for the parts that live on packaging, bluffing, and relationships —

their elimination is well-deserved.

"Inside the 4A Advertising World" series

1. Half of the six holding groups' methodology is real expertise, the other half is rhetoric
2. Clients say they want a Big Idea, but what they really want is to not get into trouble
3. [Current] This system is being eaten by AI and consulting firms — and deservedly so
4. How Satsuma Creative does advertising