What’s Killing Agencies? It’s Not What You Think

The Agency Model Isn't Just Broken... It's Extinct (And How to Evolve)

I saw some of you actually got some good use out of Scope Defender, and that's awesome. Last week's newsletter about the 80/20 rule had some tech hiccups, so here's the link if you missed it: Click here:

Listen up, agency owners.

The old way of doing things? It's not just outdated... it's dead. I'm talking about the traditional agency model, and it's time to face facts.

Your business model isn't struggling—it's a fucking dinosaur staring at the meteor. That traditional agency structure that worked for over a century? It's now actively working against you. If you're pulling 70-hour weeks, watching your margins shrink despite busting your ass, and feeling the ground shift beneath your feet—wake up. This isn't just another disruption cycle. It's an extinction-level event.

The evidence is everywhere:

• Shrinking margins despite working 70-hour weeks

• Creative work becoming commoditized through AI

• Top talent fleeing to tech companies and client-side roles

• Clients bringing everything in-house

• Tech platforms cutting out the middleman (that's you)

And let's be brutally honest—incremental tweaks won't save you. Adding "AI" to your service offerings or slapping "digital transformation" on your website isn't evolution. It's putting lipstick on a dinosaur.

But here's the truth: extinction doesn't have to mean YOUR extinction. Evolution is possible without burning everything to the ground. The agencies that survive won't be the ones clinging to outdated structures or making incremental changes. They'll be the ones who recognize the fundamental shift and strategically evolve their business models while maintaining revenue streams.

Your choice is simple: evolve deliberately or disappear accidentally.

(Source: "The Agency Model Isn't Broken, It's Extinct: How to Evolve Without Starting Over"

Trend Watch

Offline is the New Online

Forget the latest shiny object online... the real trend is offline. Yeah, I'm talking about real-world connections, real businesses, and real people in your local area. While everyone else is chasing the next digital platform or AI tool, smart agencies are rediscovering the power of face-to-face.

Recent data backs this up: Google reports that searches for local places are now outpacing comparable searches without local intent. And according to Think With Google, 78% of shoppers used at least three channels for shopping last year, with 66% planning to shop locally. This isn't just a blip—it's a fundamental shift in consumer behavior.

What's really interesting is how physical advertising is making a comeback, but with a digital twist. According to Martech Zone's latest report on 2025 local marketing trends, we're seeing a renaissance in physical and hybrid advertising channels:

• Digital Out-of-Home (DOOH) displays now use AI and real-time data to target content based on time of day, weather, and local events

• Traditional billboards and transit ads are finding new life through QR codes and NFC technology

• Neighborhood-level dynamic screens in elevators and retail spaces deliver ultra-targeted content based on specific building demographics

In a world drowning in digital noise, physical presence cuts through. Think about it—when was the last time you actually remembered a banner ad? Now compare that to the last in-person event you attended. The contrast is stark.

Local Domination: The Untapped Goldmine

Want to know where the real opportunity is? Look no further than your own backyard. While everyone's fighting for scraps in the global market, local markets remain surprisingly underserved by quality agencies.

The math is simple: becoming a big fish in a small pond is far easier than being noticed in the ocean. By focusing on your local market, you can:

• Build a reputation as THE go-to agency in your area

• Leverage local relationships for warm referrals

• Command premium rates as the recognized local expert

• Reduce competition from faceless online agencies

The most successful local-focused agencies are now positioning themselves as community hubs, not just service providers. According to the latest research, they're creating "Local Resource Hubs" with content highlighting community events, news, and neighborhood-specific information. They're also partnering with local influencers who have authentic community connections rather than just follower counts.

The agencies that are thriving right now are the ones that have stopped chasing national clients with tiny budgets and instead focused on becoming indispensable to local businesses with real money to spend.

(Source: "Local Marketing In 2025: The 7 Trends And Technologies Local Businesses Can No Longer Ignore", Martech Zone, May 15, 2025 - https://martech.zone/local-marketing-trends/ )

AI Power-Ups

AI Unleashed: Your Secret Weapon

Speaking of AI, new tools pop up every week, but don't get lost in the sauce. ChatGPT and Claude are still rockstars... focus on creating a consistent voice across all your AI to save time and get more done.

Here's the thing most agencies miss: it's not about using every new AI tool that hits the market. It's about creating systems where the AI tools you DO use work together seamlessly. The real productivity killer? Jumping between different AI platforms that don't share context or voice.

According to Upskillist's latest 2025 report on AI marketing tools, the most successful agencies are now using specialized platforms designed specifically for brand voice consistency:

• Jasper AI has become a standout with over 90 tools for content creation and brand voice management. Their "Brand Voice" feature ensures messaging stays consistent across all content, while their "Style Guides" automatically apply brand standards to maintain uniformity.

• Writer.com is helping enterprise teams save 50-70% of their content creation time while maintaining brand alignment. Their platform includes over 100 pre-built AI agents tailored for marketing tasks, with one company successfully rewriting 100 blogs in just 100 minutes to better align with their branding.

I’m not suggesting you use these tools, just giving you an idea what some agencies use. I use Chat GPT and Claude as I feel I have more flexibility.

The smart play is to pick your core AI tools and then focus on:

1. Creating detailed prompts that maintain your brand voice

2. Building prompt libraries that your entire team can access

3. Developing workflows where output from one AI tool feeds into another

(Source: "Top AI Agents for Marketers in 2025", Upskillist, May 1, 2025 - https://www.upskillist.com/blog/top-ai-agents-for-marketers-in-2025/ )

Next week I'll create a guide on creating your voice consistency with AI. This isn't just about sounding good—it's about scaling your output without scaling your headcount. The agencies seeing the biggest gains aren't just using AI—they're systematizing it.

The agency world is changing fast, but with the right strategies and a little bit of hustle, you can not only survive but thrive.

Till next week.

Laura Betterly

PS: Do you know another agency owner who’s tired of the grind and ready to build a real business, not just a job for themselves? Forward them this newsletter.