Clients are realizing they can use tools like ChatGPT to get similar or better results than their agencies, leading them to demand massive fee reductions or terminate contracts entirely. This trend highlights a significant threat to the traditional agency model if firms do not adapt and prove their value beyond what AI can offer.

The traditional agency model of being paid for strategy and ideas is obsolete. To provide real value, modern agencies must function as production companies that create tangible output—videos, content, and live events. Clients should not pay for thinking alone; they should pay for making.

Droga advises new agencies to avoid being pigeonholed into just creating disposable advertising. He urges them to build studios that use creativity to influence clients' products, business models, and experiential offerings. The old model of a large agency focused solely on ads is no longer viable or necessary.

To escape the cycle of being blamed for poor results, marketing agencies should pivot from service provider to holistic business growth partner. By offering coaching on sales, operations, and strategy, they can deliver a return on investment even before marketing campaigns launch, transforming the client relationship.

The value of a modern agency is shifting from simply executing tasks to actively upskilling the client's team. Brands should seek partners whose primary deliverable is knowledge transfer, making the in-house team smarter, more capable, and better able to own their customer strategy long-term.

AB InBev's Global CMO views their ecosystem as a "human sandwich": the brand team and agency partners provide the essential human connection, with technology as the filling. This philosophy dictates that they "choose people, not agencies," fostering deep relationships that inspire true partnership.

Paying an agency just to brainstorm ideas in slide decks is inefficient and disconnected from modern marketing needs. To be effective, agencies must integrate creative ideation with in-house production capabilities to execute at the volume and speed required by digital channels.

The speaker advises against long-term agency contracts, including standard 12-month deals. The rapid pace of change in marketing makes quarterly planning and month-to-month contracts more effective, preventing businesses from being locked into underperforming or outdated strategies.

In today's fast-paced environment, paying an agency to simply generate ideas and presentations is inefficient. Brands must move to an integrated production model where ideas and creation happen simultaneously and at scale.