The future of digital agencies

ai agencies management

2025-04-16

This is keeping me up at night. The model we built is dying. It's time to build the next one.

Let’s start with a sketch of an agency project.

A standard mid-sized website project costs maybe £80,000. That covers the costs of the sales process, a strategist, a project manager coordinating everything, a couple of designers iterating on UX and visuals, a few software engineers building the front and back end, maybe a copywriter. It covers the subscription costs of all the tools which those people use. It pays for lots of meetings, lots of messages, many revisions based on subjective feedback loops. It takes 12 weeks, maybe more. The cost is mostly people's time – skilled, expensive, human time.

Let's sketch a different workflow. A single operator (maybe the owner, maybe a senior lead) defines the core goals and target audience. They feed this into several competing AI strategy assistants for market and competitive analysis. The AI reaches into the 'old internet' for context, and searches to verify information. They use a combination of AI-assisted search and AI-assisted layout engines to create dozens of concepts and initial design directions in an hour. It costs nothing to reject a bad concept. No-one gets upset and no-one gets tired. They use AI wireframing tools. A refining prompt goes to an AI copywriter for core messaging options, another to a design AI for multiple layout variations based on the mood board. Code generation tools vacuum in the agency's past repositories for code patterns and preferences, and begin putting together the code.

Suddenly, instead of weeks of back-and-forth for initial concepts, you have a spread of viable options in a day. The cost? A fraction of the human-hours, replaced by 10,000 API calls. Let's say, generously, we spend £500 in compute for the initial creative explosion.

Which process delivers more value for the client's pound at the concept stage? Which one will feel faster, and more responsive?

Right now, the traditional team still delivers a more polished, strategically coherent final product. AI output needs heavy curation, integration relies on AI not coding itself into fractal loops, and oversight is still paramount. The AI will create beautiful but unusable code, and vapid copy. That £80,000 project involves nuance, client hand-holding, and integration complexities that AI struggles with today.

The creatives, the software engineers, and the strategists convince themselves their craft is safe, sticking to that argument as a trillion dollars coalesces into the form of a giant silicon golem, ready to smash aside their passion, education, and professional utility. The battle, of the bespoke agency process versus 2025's fragmented AI tools – is the worst the AI side will ever be, and the best the purely human-driven model will ever look in comparison. Everything is trending against the old way.

Models will improve. Today's AI is a clumsy intern drowning in complex tasks. Tomorrow's will be smarter, faster, more integrated. The gap between AI output and human-quality output will shrink dramatically, and rapidly.

Costs will plummet. Computing will get cheaper, models will become more efficient. The £500 for that concept explosion might become £50.

The economic pressure will be immense.

Workflow tools will emerge. Right now, we duct-tape AI tools together, copying and pasting Markdown and stuffing our aims into wide RAG contexts. Soon, platforms will exist specifically to orchestrate AI agents: seamless generation, review, and deployment pipelines. This isn't about people discussing tickets in JIRA. This is an automated assembly line control panel.

Client expectations will shift. Why pay £10,000 for a brand exploration over two weeks when an AI can generate 50 viable options for £100 in an afternoon, curated by one skilled designer? Clients will demand more, faster, cheaper. The perceived value of laborious human hours on tasks AI can approximate will crater. To experts, quality of the output will be perceptibly worse. The clients will not care.

The nature of "good" will change. Just like "good code" might shift from human-readable to machine-optimized, "good design" or "good copy" might become less about singular human genius and more about the best outcome selected from a vast possibility space, refined by human taste.

Is this keeping you up at night yet?

Forget the single project comparison. Scale it up.

Let's consider "The Traditional Agency" in 2025. A 30-person agency. Senior management. Sales people. Account managers, project managers, strategists, designers, software engineers, SEO specialists. Payroll. Benefits and office space and software licenses. £1.5 million a year cost before profit. They juggle multiple clients. Projects move at human speed, bottlenecked by communication, revisions, and individual capacity. The only effective route to scale this model is means hiring more people, adding coordination complexity.

What is an AI-Driven Agency in 2028? A core team of 8 people: Senior Strategists/Client Leads, AI Workflow Architects, Prompt Engineers, Senior Curators (Design/Copy/Code), Integration Specialists. They oversee a suite of AI tools and automated workflows. They handle 3x the project volume of the traditional agency, with half of the costs. The system generates code, design, copy, variants, and KPI reports 24/7. The humans focus on high-level strategy, client relationships, final quality control, and managing the machines. Overhead? Maybe £750,000, with significantly higher potential throughput.

Which model wins? I don't mean awards, or genuinely novel and interesting output. I mean which one delivers the speed and cost clients will inevitably demand?

This isn't about AI becoming a perfect replica of a human designer or software engineer. It's about industrialization. The first steam engines were too expensive and underpowered, the first cars were death traps (when they ran at all). Don't lull yourself into the dream of a static world.

We see the wave coming. As an agency owner, my choice isn't if this change happens, but how to navigate it. Do I cling to the "craftsman" model I grew up with, the bespoke process, the value tied solely to the hours my talented (and expensive) team pours in? Or do I look for a way to surf it?

This means fundamentally rethinking the agency structure. It means accepting that much of the production work – the writing, the designing, the coding, the campaign setup – will be automated or assisted to a degree that makes the old model economically unviable for many clients. The value shifts upwards, towards strategy, towards curation, towards understanding how to wield these incredibly powerful new tools to achieve client goals more effectively than ever before.

It means saying goodbye to parts of the agency model I loved. The bustling endeavour as the team gather and focus on the upcoming deadline is replaced by a silent slowly ascending chart on dashboards monitoring AI output. Roles will change. Many will disappear. We'll need fewer junior "doers" and more senior "orchestrators" and "refiners".

The critics will say AI can't replicate human creativity, strategic nuance, or the client relationship. They're right, it can't – not entirely. But industrialization doesn't win by perfectly replicating the artisan. It wins by being relentlessly cheaper and faster for the bulk of the work. We mass-produce clothes, furniture, cars and cultural experiences. The bespoke artisan still exists, but they serve a niche market. The volume, the market dominance, belongs to the factory.

Software engineering is facing its factory moment right now. Digital agencies are right there with them. The agencies that thrive won't be the ones clinging to the past, waiting to feel the crush. They'll be the ones building the assembly lines, figuring out how to harness this new automated workforce, and delivering unprecedented value by mastering the means of production. They'll optimize for OPE – Output Per Employee – leveraging AI to create more, faster, and ultimately, cheaper than the traditional model can sustain.

The craftsman agency isn't dead yet. But the factory is being built next door, and the rent is about to go up. Time to figure out how to run the machines.