After a year of mergers, leadership upheaval and accelerating AI disruption, agencies face a defining choice in 2026. Retreat into anxiety or use the moment to fundamentally rethink how they create, operate and charge for their work, writes Gareth Davies.
Will 2026 be a year of rebuilding for agencies? (Photo by Ricardo Gomez Angel on Unsplash)
If you were asked to define some of the more prominent traits of the month of January, you might reasonably point to its fixation with predictions. Like them or loathe them, the advertising industry is rarely short on points of view (natch). And the new year, in particular, offers opportunity aplenty for any aspiring Mystic Megs. But as Niels Bohr, the Nobel prize-winning Quantum physicist, famously quipped, “Prediction is very difficult, especially if it’s about the future.” But might the narrative for 2026 be a little easier to point to?
The short answer would appear to be ‘yes’. For the ad industry, much of 2026 will, almost inevitably, be spent reconciling the dramatic events of 2025. From Omnicom’s acquisition of IPG to new leadership at WPP, and so on, the big players are moving. December, particularly, left many questions unanswered, with storied agency brands either being thrust together, or worse, ‘sunsetted’ (can we consign that word to 2025 please?) on what felt like a daily basis. And if you weren’t trying to navigate that change yourself, as so many people were, you were on the outside looking in and asking one question in unison – ‘what will all of this mean for us?’
How that question is answered will be all-important in 2026. Is this change an opportunity or a threat? Speak to any agency leader in London right now and they will tell you that they are busy trying to plot a course forward. No easy task. Tristan Rice (partner at SI Global, the M&A advisors) summed up the size of the challenge when writing for The Drum recently. “…The agency world is in flux. The rise of AI in creative, media optimization and data analytics threatens to disaggregate services that traditionally made global networks valuable. Clients are demanding leaner, faster, and more tech-centric offerings, and many are rebalancing spend toward in-house capabilities or nimble specialist shops adept at data science, platform integrations, or digital commerce.”
Rice was describing the challenge for global networks, and specifically Dentsu’s international business, but the ‘existential’ threats that he identifies will be common to many agencies. I suspect the shops that we will admire at the end of the year (and beyond) will be those which are smart enough to grasp the nettle and act, meaningfully. The change that is required in our industry cannot be achieved by knitting together a few non-proprietary AI platforms. The proverbial pig doesn’t need any more lipstick.
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David Patton (CEO of Jellyfish Pictures and veteran of the ad industry), writing for More About Advertising recently, painted a picture in which the very fabric of advertising’s commercial model needs to be unpicked and reimagined. He argued that, prior to AI, agencies operated a commercial model in which both thinking and making were expensive, with inefficiencies in one balancing the other out. However, “AI has fundamentally changed that context and, in doing so, has challenged the economics of the entire advertising ecosystem by collapsing the cost of execution.”
Patton certainly isn’t the first to make the case for urgent structural change and he won’t be last. But, in the context of 2025’s disruption, Patton’s cri de coeur is even more timely. Big, small, network or indie, Patton’s concerns are relevant to all. But rather than wallowing in despair, both Patton and Rice’s commentaries should be viewed as an opportunity for the 12 months that lie ahead. Or rather a necessity.
If we so choose it, 2026 can be a year of creative reinvention. A chance to reimagine our futures, with the type of brave thinking that we counsel our clients on. A chance to define the narrative, instead of responding to it. To shape and build futures which are bespoke to each of us, to race forward with them like hell and not look back. Now, that’s surely a resolution that would be worth sticking to. And a necessary one, too.
Gareth Davies is UK group CEO of Leagas Delaney