Agency leaders who feel confident in their client relationships face an uncomfortable reality: There's a good chance their clients feel differently. While 40% of agencies rate their brand partnerships as excellent, only 13% of brands feel the same.
As brand-agency relationships evolve alongside rapid technological innovation and an increasingly complex media environment, it’s critical for agency leaders to understand the reasons for this gap—and the pressures shaping their clients’ expectations. Recent waves of holding company consolidations have only amplified this uncertainty, prompting brands to question how these structural shifts will impact their partnerships and service delivery. This is especially true amidst economic uncertainty, with most CMOs struggling to balance stagnant marketing budgets with intense pressure to drive measurable business impact.
To succeed in this environment, agency leaders must first develop a deep understanding of where their clients are pushing them to evolve and then differentiate their businesses in those areas. At the same time, they must maintain focus on two fundamentals: driving effectiveness and telling compelling, transparent stories about how that effectiveness is achieved.
Among the factors reshaping brand-agency relationships, three demand particular focus:
Each of these forces is changing what brands expect from their agency partners and how agencies must operate to meet those expectations. AI is changing the economics of agency work and prompting conversations around pricing and value. Media fragmentation is redefining agencies' role, increasingly shifting them from comprehensive partners to specialized experts. And rising client expectations are raising the stakes for agencies across the board. Understanding how each force is driving change—and how to respond—is essential for agencies looking to adapt and thrive.
Tech innovations, especially AI, are empowering brands and agencies with substantial efficiencies. The opportunity is particularly impactful for agencies, as they can apply efficiency gains across multiple clients (likely one reason why agencies have adopted AI more extensively than brands).
As AI and other technologies change how agency marketers work, brands are pushing agencies to evolve their pricing models. “Brands understand that the output of adopting these new technologies is efficiency at scale,” says Dan Wilson, Group VP of Integrated Client Solutions at Basis. “They want to know how agencies plan to share those efficiency gains with them.”
At the same time, Wilson notes that most brands and agencies haven’t reached the point where AI investments have met expectations. Barriers to adoption are also a problem, with 70% of both agencies and brands yet to fully scale the technology across media planning, activation, and analysis due to adoption challenges. This puts agencies in the difficult position of needing to evolve their pricing models to reflect AI efficiency gains that aren’t yet fully realized.
Media complexity is a major challenge for agencies and brands, and most feel their organizations’ solutions to fragmentation are only moderately effective.
This complexity and fragmentation make it difficult for agencies to provide holistic, data-driven insights around campaign performance and strategy. These problems hinder transparency, which in turn often erodes client relationships—a trend reflected in data showing over half of agency marketers report their client relationships are more strained now than they were two years ago.
Additionally, media complexity is driving brands to split their work across multiple specialized agencies. “As the industry has grown more complex, brands are understanding that, while the single, streamlined agency relationship sounds nice, it often doesn’t result in the effectiveness they’re after,” says Wilson.
This has redefined the role of the modern agency. Success now depends less on being the comprehensive partner who does everything and more on delivering specialized expertise and nimble execution in targeted areas of the marketing mix.
As tech evolutions and media fragmentation push the industry to evolve, brand expectations are growing more sophisticated in kind.
“Brands are just harder graders these days,” says Wilson. “They know what to expect, and when they’re not getting it, they’re quick to make that known and potentially make changes.” Data reflects this impatience, with one 2024 survey finding that 40% of brand respondents reported plans to switch from their primary agency within six months.
These rising expectations signal a shift in what brands want from their agencies. Where agencies once focused primarily on execution, brands now expect them to serve as trusted advisors—providing strategic guidance, offering informed perspectives on emerging technologies and tactics, and helping brands navigate marketing complexity.
With so many forces changing brand-agency relationships, agency leaders need clear priorities to inform the evolution of their businesses. Two fundamentals should guide strategic decision making:
Effectiveness will always be brands' primary concern, but delivering results is only half the battle. Agencies must also articulate how and why their strategies work.
“Storytelling will always be at the crux of what makes a good agency partnership,” says Lisa Olszewski, VP of Brand Development at Basis. “An agency’s ability to communicate how a brand’s investment is moving the needle for their business is fundamental to success.”
These priorities—driving effectiveness and demonstrating it through storytelling—matter across all three forces reshaping partnerships that this article has explored thus far. Agencies that consistently drive effectiveness and demonstrate it through compelling storytelling across these areas will be best positioned to strengthen client relationships and thrive amid industry change.
As the industry races to adopt AI, agencies who approach the technology strategically can make significant efficiency gains for both their clients and their own businesses.
Strategic integration is the foundation of successful tech adoption. Rather than accumulating a variety of disparate point solutions, agencies must prioritize interoperability with their existing tech stacks. This ensures new tools truly enhance team workflows rather than inadvertently complicating them.
Data readiness represents one of the biggest barriers to AI adoption at scale. Because AI effectiveness depends on data quality, agencies that invest in data infrastructure will significantly outperform competitors who don't. Without clean, well-organized data, even the most sophisticated AI tools will underdeliver.
Leaders should also consider rethinking their pricing models to meet client expectations for cost structures that reflect how AI is changing agency work. “A lot of agencies are exploring hybrid pricing models that mix a percent of media with incentive tiers based on innovation or performance,” says Olszewski. “We’re still in the early days of figuring it out, but it’s clear there’s an appetite in the industry for new approaches to pricing.”
Transparency should be another key consideration for agency leaders evaluating their tech stacks. As lack of transparency marks a major frustration for many brands, agencies who can offer it will set their businesses apart. “Brands want to know exactly where their media is running and what's driving results,” says Olszewski. Agencies that leverage transparency-forward solutions—for example, dashboards that offer holistic views of campaign performance across platforms—can deliver on a critical client expectation and build stronger relationships as a result.
As they work to optimize their investments, agencies must also craft compelling narratives about how their tech stack delivers superior results and drives measurable business impact. This means moving beyond general claims of increased efficiency to share concrete proof points—for example, demonstrating how AI-based optimization delivers higher ROAS than manual budget adjustments, or quantifying the hours per week that workflow automation technology saves agency teams.
In today's fragmented media environment, brands need agencies that can move with speed and clarity, quickly pivoting strategies based on performance data and adjusting campaigns in real-time. Yet rising media complexity makes this agility increasingly difficult to achieve, as agency teams navigate disconnected platforms, channels, and tools throughout their daily work.
The need for agility extends beyond campaign execution to the partnership itself. “Brands need agency partners who can think on their feet and adjust the relationship as the brand or the market changes,” says Olszewski.
Technology can play a critical role here. By adopting tools that unify disparate platforms and automate manual processes throughout the campaign life cycle, agency leaders can deliver the agility clients are looking for.
To gain the fullest value from these investments, agencies must consistently weave them into their client storytelling, demonstrating how their tech stack delivers the agility and insight that sets them apart in an increasingly fragmented landscape. In a multi-agency environment where brands constantly compare partners, clear communication about operational advantages can be the difference between deepening relationships and losing them.
Finally, agencies should drive effectiveness by deepening their role as trusted advisors. Marketing and media complexity has increased to the point where it has created significant opportunities for agencies that can guide clients through constant change.
“Brands want a partner who’s evaluating things with them, not just for them, whether that’s analytics, automation tools, creative strategy, or something else.” notes Olszewski. Clients need their agencies to weigh in on critical questions: Which platforms deserve investment? How should we approach AI adoption? What does an effective data strategy look like?
"One of the things brands have relied on their agency partners for is to help them stay informed," says Wilson. "That's a massive value proposition of working with an agency. They educate the brand, and the brand grows more and more educated over the years as a result."
Crafting compelling stories around strategies and impact is a critical piece of this advisory role, helping brands understand not just what agencies do, but why it matters. This might mean walking a client through the rationale behind a channel mix shift based on emerging consumer behavior, or recommending budget adjustments based on competitive intel. Agencies that excel at this consultative storytelling build client confidence and deepen trust by clarifying the 'why' behind every recommendation.
While each agency's path forward will depend on its unique strengths and client base, successful leaders will anchor their strategies around two constants: driving measurable effectiveness and telling compelling stories about how that effectiveness is achieved. By strategically investing in technology that enhances both capabilities and transparency, prioritizing nimbleness in an increasingly fragmented landscape, and deepening their role as trusted advisors, agencies can strengthen client relationships and differentiate themselves in a competitive market. Those who embrace these shifts will be well-positioned to close the perception gap with brands, retain valuable clients, and thrive amid ongoing industry transformation.
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Looking for more in-depth insights around how brand-agency relationships are evolving? Our research study with AdExchanger, Broken Trust, Blurred Lines: Who Owns the Future of Advertising? reveals insights from brand and agency leaders around the major obstacles facing the industry, areas of conflict and potential growth, and the forces driving digital advertising's evolution.
