AI is shrinking agency work. Can strategy save the agency business?

New Delhi: The ad agencies' business model is now under strain. Earlier, campaigns were conceived, produced, deployed and optimised through large teams that handled everything from creative development to media buying. 

But now, artificial intelligence has begun automating large parts of execution, including content creation, media optimisation, performance tracking and deployment. 

As that layer shrinks, agencies are being forced to confront a difficult question: What is their enduring value?

Across the industry, one answer is gaining momentum: Consulting. But as agencies talk increasingly about “consulting”, the term itself has become fuzzy. Is this a genuine evolution of the agency model, or a fashionable label applied to work agencies were always meant to do? And does consulting really offer a viable future, or is it a distraction from fixing the core business?

To understand this shift and its limits, we spoke to multiple senior industry leaders who agree on one thing: execution alone is no longer enough. Where they differ is on what comes next.

Why is execution no longer enough?

There is broad agreement that the traditional execution-heavy model is weakening. Automation is steadily absorbing tasks that once justified large agency teams. Media optimisation, performance tracking, content variations and deployment are increasingly handled by technology.

As this happens, agencies are losing the protection that sheer operational scale once offered.

Former Head - Content & Creative Services, WPP Media, Ajay Mehta sees this shift as structural rather than temporary. He believes agencies are being reshaped not only by AI, but by where they sit inside client organisations.

Historically, agencies operated bottom-up, dealing largely with brand managers and marketing teams. Consulting firms, by contrast, engaged top-down with CXOs on business problems.

“Most agencies rely on a bottom-up approach. The reason why the top consulting firms succeed is that they go top-down. They speak to CXOs,” Mehta said.

For him, the growing interest in consulting is closely tied to this access. When agencies engage only at the execution level, they are vulnerable. When they engage at the strategic level, they become partners rather than vendors.

The problem with the word ‘consulting’

While the shift away from execution is widely accepted, the industry is far less clear on what consulting actually means. The term is being used to describe everything from long-term brand thinking to short-term problem solving, creating confusion for both agencies and clients.

Hemal Majithia, founder of OktoBuzz, argued that consulting is not a loose label but a discipline that demands rigour. He described a clear hierarchy built on experience, from teaching and training to consulting, coaching and, ultimately, advisory roles. 

“Strategy is not a service. Strategy is a science,” Majithia said, stressing that it requires structured frameworks and repeatable processes.

He illustrated this through brand work, particularly the identification of brand values. Values, he explains, are not discovered through open-ended discussion. “Values are always top-down,” Majithia said. Through facilitated workshops and structured frameworks, founders narrow down choices methodically until a clear set of values emerges.

This distinction matters because many agencies, in Majithia’s view, conflate conversation with consulting. As clients become more sophisticated, that lack of rigour is becoming harder to hide.

Strategy, consulting and advertising are not the same thing

Even as agencies expand their strategic ambitions, several leaders caution against collapsing all thinking work into the consulting bucket.

Neeraj Bassi, Head of Consulting, Ogilvy, drew a firm distinction between advertising and consulting. “These are two very distinct offerings. A campaign will not get done by consulting. Campaigns will remain the core of advertising,” he said.

For Bassi, advertising is fundamentally about expression: creating consistent identities, campaigns and communication systems. Consulting, by contrast, deals with problems that may not immediately result in communication output. These could include questions of direction, structure or long-term brand health.

He also challenged the idea that AI is taking control of agency work. “I don’t think AI is taking control. I think AI is a great assistive technology,” Bassi said. While AI can speed up processes, decisions about whether something is right for a brand still require human judgment.

Crucially, Bassi rejected the notion that consulting is a defensive pivot. “I don’t think consulting is a pivot for agencies. Agency business is not dead. It will continue, and it will transform,” he said, positioning consulting instead as an add-on service that can coexist with advertising.

Is consulting really the future?

As the conversation turns from definition to direction, doubts begin to surface about whether consulting should be the destination agencies aspire to.

Amitesh Rao, CEO, South Asia - Leo, Publicis Health and Publicis Business, is clear that agencies must embrace technology if they want to survive. “Does a creative business that does not embrace the power of data and technology and AI have a reason to exist? No. It cannot exist,” he said. However, he does not believe consulting offers a safe alternative.

Rao pointed out that the consulting industry itself is under pressure. “They are seeing more recruitment freezes, no increments, layoffs, downsizing, scrutiny from clients, and commercial devaluing of the consulting product,” he said. In that context, he questions why agencies would try to replicate a model that is struggling.

In Rao’s view, agencies already operate in advisory modes when they are at their best. “The best partnerships we have with our clients are already advisory and consulting in nature,” he observed. For him, the real challenge is not to pivot, but to recognise and strengthen the strategic role agencies already play.

The capability question

If Rao questioned inevitability, Meenakshi Menon, Founder, GenSxty Tribe, questioned capability. She was direct about the risks of overreach, arguing that relevance could only be reclaimed where genuine depth and skill existed. In her view, ambition without capability did little to change outcomes.

Menon’s criticism was not aimed at the pursuit of strategy itself, but at agencies positioning themselves as consultants without the requisite expertise. She maintained that established consulting firms continued to operate at a very different level, pointing to players such as Accenture Song as benchmarks for depth and rigour.

She also cautioned against reading isolated examples as evidence of a wider shift. According to Menon, a handful of agencies talking up consulting arms did not, by itself, constitute an industry-wide transformation.

So, fad or future?

Taken together, these arguments suggest a more nuanced reality than the headlines imply.

Strategy and advisory thinking are undeniably becoming more important as execution becomes automated. 

Agencies that continue to define themselves only by output will struggle. At the same time, consulting is not a universal solution. It is not a quick pivot, nor a single skill. It demands experience, frameworks, credibility and trust.

What emerges instead is a picture of an industry in transition. Agencies are being pushed up the value chain, but not into a single mould. Some will deepen their strategic and advisory role within the advertising ecosystem. Others may build standalone consulting capabilities. Many will do neither successfully.

The future does not belong to agencies that merely rename execution. It belongs to those that can think clearly, advise responsibly and use AI to enhance, not replace, human judgement. In that sense, consulting is not the destination. Relevance is.