Agencies

Martin Sorrell has a lot on his mind: artificial intelligence, media transparency, the Iran war and tariffs, to name a few points of friction. The founder and executive chairman of S4 Capital, which owns Monks, sees an agency sector that is grappling with largely flat revenues but remains complacent in the face of gathering storm clouds, setting itself up for a rude awakening in the future. 

“It can’t carry on as it is,” Sorrell said in an hour-long sit-down interview with Marketing Dive in March 2026. “Or rather, it isn’t carrying on as it is, because it’s basically flat as a pancake.”         

The executive, who helped shape the modern ad-holding group model by building out WPP through aggressive M&A, also questioned the moves of rivals, including Publicis Groupe’s spat with The Trade Desk and Omnicom’s handling of its acquisition of Interpublic Group. 

“To my mind, that’s a defensive merger,” Sorrell said of the Omnicom-IPG deal. “It’s very similar, to my mind, to Paramount and [Warner Bros. Discovery] in that one side's gonna not survive.” 

Sorrell’s breakdown of the myriad challenges facing agencies in 2026 comes as his own network has struggled with growth. S4, which positions itself as a digital-first challenger to holding companies with roots in traditional media, saw like-for-like net revenue slide 8.5% in 2025. However, the company’s revised results were better than expected while its net debt ultimately came in lower than consensus estimates.

Changing growth dynamics

One of agencies’ chief problems is that ad spending growth is no longer directly tied to other measures of economic health, such as GDP. Ad-spending forecasts have been relatively resilient despite the impact of tariffs, while the stock market has avoided a worst-case scenario, but agency earnings are a mixed bag.

“The traditional correlation was if clients did well, agencies did well. There was, I think, a very tight correlation between corporate profitability and ad spend,” said Sorrell. “You would think that ad spend would increase. [That’s] not happening.”

Sorrell was also wary of relying too much on assessing other ad-holding companies’ earnings data, believing it’s not “highly dependable” since different networks have different ways of reporting revenue, an issue that has been raised by other leaders in the space.

Another disruption for agencies is that some categories, namely technology, are shifting more of their resources from operational expenditures — an area that includes marketing — to capital expenditures to the tune of over $600 billion as they race to develop AI products. Nearly half of S4’s client roster is in tech, creating a difficult situation for the Monks owner.  

Lastly, the Iran war is significantly roiling an already teetering economy beset by on-again, off-again tariffs and stubborn inflation. As the Middle East conflict stretches on with no clear end in sight, marketers are unlikely to make big decisions.  

“There’s just a general caution,” said Sorrell. “I’ve got to say, I think getting up every morning and having to deal with the implications of all this uncertainty is not pleasant for marketers.”

Rising tensions

As agencies navigate these headwinds, some are trying to more aggressively assert their economic power. That’s at least how Sorrell views Publicis in March 2026 recommending clients to not work with The Trade Desk after saying the demand-side platform failed a third-party audit, claims the ad-tech firm’s leadership has contested. The dustup has raised broader questions around media transparency, with Sorrell believing agencies will struggle to stand up to deeper scrutiny into their practices.   

“I don’t think the agencies will be able to withstand a demand from the client to know what the price is and what the margin is. I mean, The Trade Desk-Publicis dispute is effectively that,” said Sorrell, who suggested Publicis may have shot itself in the foot with the maneuver. 

“If I was the client, I would say I have audit rights — which most of the big sophisticated clients do have — and I want to audit what you’re doing,” he added.

Principal-based media buying, when agencies both buy and resell media to their clients, is another area where agencies are again in the hot seat following a high-profile lawsuit against WPP and new research from the Association of National Advertisers underscoring marketers’ growing uncertainty about the practice, which is increasingly common. Sorrell wasn’t opposed to the concept in principle, noting that agencies often broker complex deals with publishers that factor in multiple clients and can receive better pricing for their efforts. 

“I think there is an argument that it should be kept by the agency,” said Sorrell of discounts offered by publishers. “The question is whether procurement at clients will accept that, whether that will prevent them from saying: ‘That's ours and not yours.’”   

“I think the general point is everybody is looking for transparency,” Sorrell added.

Beyond tensions between advertising companies, Sorrell also frequently returned to the turbulence inside of agencies, specifically Omnicom following its $13 billion-plus takeover of IPG. The executive pointed to Omnicom’s reportedly chilly handling of some layoffs, including alleged mass firings where leaders kept their video cameras turned off during the meeting, and the organization’s plans to enact $1 billion in labor cost reductions, a figure higher than previous targets.

“I’m not saying that any of us are softies, but there's a brutality which is quite shattering,” said Sorrell.

AI’s threat and opportunity

Agency contraction could intensify as AI is adopted at scale. Visualization, copywriting, personalization and media planning and buying are some of the ripest functions to be taken over by AI, Sorrell predicts.  

Meanwhile, agencies need to contend with stiffer competition from hyperscalers — the Googles and Amazons of the world — that are investing heavily in one-stop-shop AI tools for advertisers. Those offerings are frequently targeted at small- and mid-sized marketers, but could eventually be positioned for larger clients that make up agencies’ bread and butter. 

Agencies aren’t investing sufficiently in AI technology to keep up, per Sorrell, which could lead to a massive amount of compression. Half of agencies’ proprietary AI platforms will either shutter or become obsolete by 2029 as enterprise organizations opt for platforms developed by hyperscalers, according to Gartner forecasts.  

Not everything is doom-and-gloom when it comes to AI in Sorrell’s mind. The technology, which he says he’s optimistic about, could bolster efficiency and streamline organizations to get rid of silos. S4 in 2024 launched Monks.Flow, an AI-powered managed service offering aimed at assisting clients with adapting to the AI era. The problem is many brands are still stodgy in their thinking when it comes to AI, including through legal and procedural resistance, Sorrell explained.

“It’s extraordinary but clients don’t move fast enough. So it’s not about technology, it’s about change management and it’s also about simplifying workflow,” said Sorrell. “I mean, Monks.Flow is really about that.”   

During the spring 2026 upfront presentations, leading media companies made their big pitches to secure advertising dollars, enlisting Hollywood talent and audio-visual flair to punch up programming slates and digital capability offerings. Across the sometimes literal dog-and-pony shows were several reminders of how these presentations continue to evolve to meet changing consumer behaviors and advertiser demands.

"The biggest shift heading into this year’s upfronts is that TV is no longer insulated by awareness-only measurement expectations,” said YJ Kim, strategy director at consultancy AI Digital, in emailed comments. “Premium reach still matters, but measurable business impact is increasingly what unlocks incremental budget."

Several themes emerged during upfronts hosted by legacy publishers including NBCUniversal, Disney, Warner Bros. Discovery and Fox, as well as tech giants Netflix and Amazon that are relative newcomers to TV advertising. Marketing Dive was on the ground in New York for these showcases, and has assembled key takeaways from a series of presentations that had more in common than not.

Live sports win

The sitcoms and hour-long dramas that previously dominated the upfronts felt like afterthoughts in presentations increasingly dominated by sports. 

NBCU is expanding its Sunday night sports strategy from football to basketball and baseball, giving advertisers a more consistent opportunity year-round. Its Telemundo channel will also feature 700 hours of 2026 FIFA World Cup programming and be on-site at all 104 matches for the soccer tournament. For its part, Fox will broadcast a record 70 World Cup matches on network television, with 40 in primetime. 

“This week, you’re going to hear a lot about the value of live sports and ad-supported streaming. At Fox, that’s not a new story: It’s what we’ve been delivering successfully for years,” Fox CEO Lachlan Murdoch said during the company’s presentation. “Fox is the leader in live programming and home to one of the fastest growing ad-supported streaming platforms in the business. That combination isn’t accidental — it’s intentional.”

Streamers Netflix and Amazon talked up their NFL offerings, with the former adding three additional games to its slate and the latter continuing to find success with its football programming. Amazon Prime Video’s “Thursday Night Football” delivered its largest season-long audience in the show’s 20-year history, and the streamer’s wild card game presentation drew 31.6 million viewers — the most-streamed NFL game of all time. 

“Prime audiences don’t merely tune in, they lean in,” said Charissa Thompson, a sportscaster on Prime Video, during the Amazon upfront. “Our audience is younger and more likely to engage with advertised brands than sports viewers on any linear network.”

Not to be outdone, Disney is preparing for what ad chief Rita Ferro described as the company’s “biggest year ever,” with cultural tentpoles including the Oscars, the Grammys, New Year’s Eve programming, the College Football Championship and — for the first time — a Super Bowl broadcast on both ESPN and ABC. The company expects to see a 55% increase in NFL impressions year over year, according to Ferro, and command 40% of all football impressions across the college and pro seasons. 

“In a marketplace where everyone is racing to assemble what we already have, Disney is in a category of one,” said Josh D’Amaro, during his first upfront presentation as Disney CEO.

Data is key

Aside from sports, all upfronts publishers positioned themselves as strongholds of consumer fandoms that drive engagement for brands using data-driven, artificial intelligence-powered technology. Those assets connect the dots between buying, optimizing and measuring campaigns across linear, streaming and beyond.

Perhaps no company can better stake its claim as the leader in data than Amazon. The tech giant now connects more than 300 million ad-supported consumers in the U.S. across its portfolio, giving Amazon the industry's largest authenticated reach — 90% of U.S. households — and helping reduce waste while generating higher click-throughs and conversions.

“These signals are not modeled. They’re not assumed. They’re built on trust,” said Tanner Elton, vice president of U.S. ad sales at Amazon, on stage at the upfronts. “These signals give us unparalleled precision. That precision drives performance, and that performance delivers outcomes that matter.”

Fox also trumpeted its reach of more than 200 million people every month across over 1 billion devices. It boasted of linear audiences that have increased by double digits over the last several years, a period where industry-wide linear audiences declined 33%. Growth has been spurred by Tubi, which Fox acquired in 2020, while the network in April 2026 retooled its advertiser solutions around the Fox AdStudio. The AI-supported offering features a converged audience graph that incorporates billions of data points and a measurement engine that provides reporting via more than 20 data partners.

“Engaged fans are your best customers. They’re 21% more likely to purchase your products and 30% more likely to remember your ads, which is exactly why we launched the Fox AdStudio and its suite of full-funnel measurement solutions,” Fox ad chief Jeff Collins said during the upfronts. “To date, AdStudio has delivered advanced outcome reports for over 1,000 campaigns showing double-digit lifts in key metrics like in-store sales and foot traffic.”

As part of its upfront presentation, Warner Bros. Discovery launched an Always-On Measurement & Attribution Dashboard that provides real-time visibility into campaign performance and enables in-flight optimization toward outcomes. Meanwhile, NBCU, a longtime innovator in data and measurement, said it plans to roll out its previously announced Performance Insights Hub in Q4 2026. The hub integrates measurement from leading firms like iSpot, VideoAmp and EDO and, at the ufpronts, NBCU revealed Instacart is serving as its exclusive CPG outcomes partner.

AI powers dynamic, contextual ads

Unsurprisingly, one of the main applications for data usage by media companies is building out AI-powered tools that look to make the advertising process more efficient and engaging. 

Amazon Ads continued to develop AI tools with the introduction at its upfront presentation of Dynamic TV Creative, a capability that automatically personalizes Interactive Video Ads based on viewer shopping behavior. The tool uses Amazon’s signals plus AI-driven creative optimization and campaign management abilities to adjust format, call-to-action, headline and details depending on where shoppers are in their journeys.

“This moves away from a one-size-fits-all approach, creating a more relevant experience for audiences while streamlining campaign management and execution for brands and helping their marketing dollars work harder,” said Fabrice Rousseau, director of CreativeX at Amazon Ads, in a press statement. 

The capability is currently available to select U.S. advertisers in categories including CPG, fashion and electronics that sell on Amazon via Prime Video campaigns. It will expand to more customers and inventories in Q3 2026, and is already being used by The Hershey Company.

Warner Bros. Discovery continued to build out its suite of solutions and formats for advertisers, even if the company’s acquisition by Paramount represents “the Ellison — I mean, the elephant — in the room,” as Bobby Voltaggio, co-president of U.S. Advertising Sales at WBD, joked during the presentation.

Along with shoppable pause ads that have been become table stakes for streaming services, WBD announced Scene Level Moments, contextual targeting powered by Kerv.ai; Dynamic Creative that adapts ad headlines and visuals contextually; and Agentic Experiences that tap into growing interest in agent-to-agent advertising. 

Likewise, Fox’s Ad Studio includes a contextual engine powered by an large-language model that connects brands to the content moments to provide ad insertion using scene-level targeting. NBCU also announced plans to expand contextual targeting and roll out always-on AI agents, while Netflix noted that its years of experience with AI and machine learning have helped advertisers including DoorDash, Target and TurboTax.

The rollout of AI tools across publishers meets advertisers where they are in their journeys with the technology. Four in 10 advertisers are testing AI creative in 2026 while over one third are exploring AI workflows and operations, per an iSpot report shared with Marketing Dive.

“The 2026 advertising environment is defined by a decisive pivot toward precision. Marketers have moved past the experimentation phase of AI, now integrating full-scale workflow automation to optimize efficiency,” according to iSpot’s 2026 Video Ad Spend and Strategy Report. “While spending forecasts remain cautiously optimistic amid economic shifts, budgets are increasingly concentrated in channels that offer the highest degree of accountability.”

Sponsored content

By Fetch

Commerce media is everywhere right now. CTV, DSPs, retail media networks, streaming partnerships — every platform is racing to become a commerce platform. But while activation opportunities are exploding, measurement is becoming messier.

Most commerce signals are still trapped inside closed ecosystems, making it increasingly difficult for agencies to understand what’s actually driving performance across the full consumer journey.

A consumer might see a prominent beverage ad on CTV, engage with a DSP campaign later that week, and eventually convert at Kroger, Instacart, a regional grocer, or club retail. But if measurement only exists inside one retailer or media platform, marketers end up with a fragmented view of incrementality.

That’s becoming a real problem as brands push agencies for more accountability across growing media investments.

The industry is moving beyond platform-centric measurement

For its entire history, the industry optimized around reach. Bigger audiences. More impressions. More scale.

Now, the conversation is shifting toward quality reach — reaching actual buyers and proving business outcomes across channels, not just delivering impressions inside a single ecosystem.

Agencies increasingly need broader visibility into consumer behavior across retailers, devices and environments. That means moving beyond platform-specific reporting and toward measurement frameworks that can connect media exposure to verified purchase activity across the real world.

At the same time, signal loss and privacy changes are forcing the industry to rethink how data is collected and activated. The future is moving toward more transparent, privacy-forward consumer data exchanges built around consent, server-to-server connectivity and deterministic purchase validation rather than probabilistic assumptions alone.

In other words: marketers don’t just want more data anymore. They want data they can trust.

Why deterministic purchase data matters more than ever

As commerce media fragments, deterministic purchase data is becoming one of the most valuable assets in modern measurement.

Verified transaction data creates a much clearer picture of consumer behavior because it reflects what people actually purchased, across retailers and channels, not just where media happened to run.

That broader visibility matters because shopping behavior is no longer linear. Consumers discover products in one environment and purchase somewhere completely different days later. Without cross-retailer visibility, marketers risk optimizing toward incomplete outcomes.

Fetch approaches this challenge through a measurement-first lens. Fetch captures 13M+ receipts per day and sees up to $212B in annualized gross merchandise value (GMV), creating retailer-agnostic visibility into real-world purchasing behavior at scale. Combined with CAPI integrations, deterministic purchase validation and closed-loop measurement methodologies, that visibility helps brands better understand true cross-channel performance.

Audiences become more valuable when built on measurement

This also changes the role audiences play in modern media strategy.

Audience activation is still critical, but the smartest strategies increasingly start with measurement first. Once marketers understand verified purchase behavior and incremental impact, audiences become a much stronger activation layer.

Instead of relying solely on modeled intent signals, agencies can build audience strategies informed by real consumer behavior. That creates more efficient targeting, stronger optimization opportunities and better performance across commerce media environments.

As commerce media continues evolving, the agencies that win won’t just be the ones with the biggest reach. They’ll be the ones that can connect activation, measurement and real consumer behavior into a clearer picture of performance.

Publicis Groupe is acquiring the data collaboration and identity resolution platform LiveRamp in an all-cash transaction with a total enterprise value of $2.2 billion, according to a May 2026 press release.  

LiveRamp helps brands connect, manage and activate data sets that are drawn from different sources. The ad-tech firm has interoperability with over 25,000 publisher sites and hundreds of data and technology partners, such as cloud software providers, spanning 14 global markets. 

LiveRamp, which has 1,300 employees, will continue to be led by CEO Scott Howe, who will report directly to Publicis chief Arthur Sadoun. The acquisition is expected to close by the end of 2026 and is positioned by Publicis as a way to further differentiate its services on the critical agentic artificial intelligence front. 

Publicis says LiveRamp’s capabilities provide another leg up for the network as it races to hone a competitive advantage in the AI era of marketing. LiveRamp allows marketers to tap into co-created data, or data the ad-tech platform synthesizes from multiple sources in secure clean room environments to create distinct assets. Those assets will provide the backbone for Publicis to produce more sophisticated AI agents on behalf of clients.

“Put simply, agents built on co-created data learn and improve with every signal, separating them from competitors that train their agents on stagnant, generic data,” Publicis CEO Sadoun said in a prerecorded video, adding that the deal opens up a new addressable market for the group.

Sadoun has previously pointed to the gaps between the current levels of AI spending and actual returns on investment, an area where LiveRamp is expected to solve persistent pain points. The acquisition is also intended to accelerate Publicis’ bigger focus on the agentic space while bolstering overall growth. Publicis in April 2026 deepened its relationship with Microsoft around agentic AI while winning the tech giant’s global media account.   

Publicis anticipates raising its 2027 and 2028 outlook from 6% to 7% net revenue growth to 7% to 8% net revenue growth following the close of the LiveRamp deal, which is still subject to approval by regulators and LiveRamp's shareholders. LiveRamp grew revenue 9%, to $206 million, for the fiscal Q4 period ended March 31, 2026, per an earnings statement released in tandem with news of the Publicis acquisition. Full fiscal 2026 revenue landed at $813 million, the lion’s share of which came from subscriptions.    

In an example of the combined power of Publicis and LiveRamp outlined in the announcement, a retailer could develop an AI agent dedicated to customer journeys that harnesses data spanning CRM platforms, loyalty, in-store and retail media network ad inventory. The agent could then connect that data back to the retailer’s partners to improve measurement and explore new models for mapping the customer shopping journey. 

LiveRamp’s financials will be reported as part of Publicis’ technology segment that also includes the consulting arm Sapient, data-marketing platform Epsilon and the internal AI tool Marcel. Technology currently represents about 14% of Publicis’ total net revenue.

Bringing a formerly independent ad-tech platform under the Publicis banner raises questions of neutrality and control that both companies are trying to allay. The announcement emphasizes that LiveRamp will remain interoperable and that its commercial practices, including pricing, will be unchanged. In addition, the business will uphold existing contractual guidelines around how client, partner and publisher data is deployed. 

“No current or prospective customer will be prohibited from accessing, or restricted in using, its services,” according to the press release. 

Publicis is extending an M&A hot streak following similar deals like its purchase of identity solutions firm Lotame in 2025. In 2019, the group acquired Epsilon for $4.4 billion in its largest deal ever. Analysts at the time were skeptical of the move, but it has paid out in the long run as marketers prioritize data-driven marketing expertise.

VaynerX is expanding its marketing services portfolio with a new agency brand dedicated to the attention economy. The holding company founded by entrepreneur Gary Vaynerchuk has long positioned social and earned media as table stakes for modern marketers. The Tamara Group responds to the needs of a growing number of CMOs who are under pressure to crank out more content, faster, to feed an increasingly algorithmically dictated online ecosystem dominated by platforms like YouTube and TikTok. 

“Even five years ago, volume was the scariest thing ever for [CMOs],” said Ryan Harwood, who is taking on the CEO role at Tamara Group while maintaining his post leading VaynerX’s publishing division, Gallery Media Group. “They now realize that volume, in order to reach many different cohorts, is the new version of quality and quantity.” 

With a name doubling as a tribute to Vaynerchuk’s mother and an acronym for the The Attention, Media, And Relevance Agency, Tamara Group made its debut at the Possible conference in Miami, Florida, in April 2026. Ulta Beauty, Mrs. Meyer's Clean Day, Hisense, Method and Petsmart are among its launch partners.

The roster is about half new business and half existing VaynerX clients, according to Harwood. Existing clients transitioning to Tamara Group, such as Ulta Beauty, Method and PetSmart, are doing so with either signifcantly expanded scopes of work or to leverage the agency’s more specialized expertise. Tamara Group will also factor heavily into VaynerX’s presence at Cannes Lions, a major industry gathering in June. 

This is the third agency brand under the VaynerX umbrella after VaynerMedia and communications arm ChukMedia, with talent drawn from across the holding company and nearly 100 employees. The Tamara Group weds expertise in publishing — Harwood started the women’s lifestyle site PureWow before bringing the venture to VaynerX and starting Gallery Media Group in 2017 — with more traditional agency service areas, including creative strategy, social content, influencer campaigns and events. 

“I wanted to take some of the best talent from Gallery, I wanted to take some of the best talent from Vayner and I wanted to hire externally for some areas that I thought we can fill in the gaps to make the type of agency we wanted to,” said Harwood. 

Even as the shop covers a wide field, Tamara Group is chiefly focused on people making content, the executive emphasized. Whereas a traditional agency might divvy up its teams’ responsibilities so 80% of employees tackle strategy and creative and the other 20% handle production, Tamara Group tries to flip that calculus.  

“We are a production-first [company] that happens to do creative strategy, media, influencer, experiential,” said Harwood. “We want a majority making at all times. That’s where we want their dollars going.”

Preserving a social-first advantage

The Tamara Group arrives as other agencies retool their production arms to contend with social- and creator-first marketing mandates, stingier clients and the rise of generative artificial intelligence, which has exacerbated the content flood. 

WPP in January 2026 unified its production agencies, including Hogarth, into a single integrated unit as part of a larger turnaround strategy anchored in four core service areas. Omnicom made a similar move in 2024. But where other agencies are experiencing consolidation, Tamara Group helps to more clearly delineate what VaynerX has to offer brands, Harwood explained.  

“It’s not replacing anything,” said Harwood. “If anything, I’d say we have more clarity than ever at the VaynerX level, where we have three full-service agencies now and we have a media publishing company and everybody knows what they do.”

Hardwood declined to share specific revenue targets for Tamara Group for 2026, but noted that the situation is “fluid” given that the agency is brand-new. There is no shortage of brands investing in social-first content, where VaynerX was an early mover. As other agencies specialize further in this area, Harwood still sees the group as having a leg up due to its staff and founder being true practitioners of social (Vaynerchuk, beyond his agency endeavors, is a prolific content creator). To differentiate, Tamara Group will also look into services tied to some of Vaynerchuk’s personal interests, like helping brands develop collectibles strategies and adapting for generative and answer engine optimization in the AI era.

“There’s absolutely more competition than ever when it comes to the social space,” said Harwood. “I still think that the craft and being obsessive about the craft allows us to have an advantage at all times.”

More brand marketers are worrying over principal media, when ad agencies act as both the principal buyer and reseller of media, but only 57% have governance guidelines over the practice, according to a report from the Association of National Advertisers. Among client-side marketers surveyed by the trade body, 90% cite uncertainty that principal media is in their best interest as a top concern. That’s up from 79% who said the same in 2024, when the ANA began analyzing principal media in greater detail. 

More than one-third of surveyed marketers said their contracts with agencies do not address principal media or they were otherwise unsure on the matter. The group’s research and advice for navigating principal media follows increased scrutiny into the space, with fresh questions over whether agencies keep media rebates received from publishers.    

Principal media has become a bigger focus for media agencies, particularly large ones within ad-holding groups that transact substantial publisher deals. The practice entails agencies purchasing media, becoming its principal owner, and then reselling it to their clients rather than exclusively acting as buying agents on the clients’ behalf. Even as principal media is growing more common in advertising, brand marketers are encountering significant knowledge gaps, with many not implementing thorough governance and some being unsure of whether their agency agreements account for the practice in the first place.

The ANA shared several tips for marketers looking to tackle the problem, including: introducing a more rigorous approval process; ironing out contracts to specifically address any uses of principal media (for example: forbidding principal buys to be intermingled with standard agent-led buys); setting caps on the amount of budget that can be allotted to the category and ensuring a clear window into the outlets where principal media deals are applied. In addition, the trade body recommended clients push their agencies to lay out concrete business use cases for pursuing principal media in lieu of alternatives, inclusive of cost and audience delivery comparisons with standard agent-led media buys.  

“Principal media is becoming a more common part of the media ecosystem, but marketers need to ensure they have the right safeguards in place,” said ANA CEO Bob Liodice, in a statement attached to the report. “For our members, that starts with making sure agency contracts explicitly address principal media and establishing clear internal approval processes. Marketers should always understand whether their agency is acting as an agent or a principal in any media transaction.”

Principal media can be a valuable profit-driver for agencies but has amplified long-standing transparency concerns, with renewed controversy over rebates, wherein agencies pocket the benefits of hitting certain spending thresholds with publishers even though they accomplished those goals using a client’s advertising budget. The media rebate issue — a poorly kept secret that clients and agencies have frequently butted heads over — is at the center of a current lawsuit against WPP Media by a former employee, who alleges he was fired from the company for calling out rebates that were not properly disclosed to clients.     

Several factors are contributing to the broader uptick in principal media, including mounting pressure on publicly traded holding companies to demonstrate financial performance. Building on that, industry consolidation is accelerating the trend, per the ANA.

Omnicom’s $13 billion-plus acquisition of rival Interpublic Group in 2025, which created the world’s largest marketing services organization and mashed together two already massive media operations, has “significantly expanded the scale and strategic importance” of principal-based media buying, the ANA wrote in the report. Omnicom has estimated its media and advertising segment could grow between 50% and 60% with the addition of IPG’s assets. 

“Increased scale changes the economics of media buying, making it more practical for agencies to purchase inventory in larger volumes and deploy it across multiple clients,” the ANA report reads. “In that context, principal-based trading becomes more scalable and financially attractive.”

Seventy-six percent of marketers see cost reductions as the chief benefit of principal-based media buying, the ANA found. Proliferation of principal media is reflected elsewhere in the ANA survey findings, with 56% of marketers expecting to use principal media this year versus 41% who said the same in the 2024 study. Similarly, 37% have seen their principal media usage jump in the past year, compared to 24% who said so previously.

The ANA surveyed 114 client-side marketers between Oct. 10 and Dec. 19 of 2025 to gather its findings. A majority of respondents, 81%, held director-level or higher positions.

WPP, while not the first agency holding company, in many ways established the modern industry model through a relentless approach to acquisition. Now, the owner of agencies like VML and Ogilvy wants to unwind the complexity created in the wake of that aggressive expansion, vying to become a “single company” that can put sophistication in areas like artificial intelligence first.

WPP is already a single company by many conventional definitions. It trades under one stock ticker — with a share price that has trended downward — and has an executive leadership team with one CEO, Cindy Rose, at the helm. But it’s hard not to read the Elevate28 strategic overhaul, announced as part of a trading update in February 2026, as another nail in the coffin for a legacy agency ecosystem that has been limping along for at least a decade, battered by the industry’s sluggish adjustment to technological transformation and changing client demands.

“Clients pointed to the fact that our complexity got in the way of true client obsession. We were siloed. We were hard to navigate,” said Rose on the earnings call in February 2026. “It’s taken us too long to land our data proposition and our media business has suffered as a result.”

The shift to anchoring WPP’s business around four units — creative, production, media and enterprise solutions — and a single shared operating system, WPP Open, mirrors the approach taken by rivals like Publicis Groupe, which over time have prioritized service areas over individual agencies. Some industry watchers see WPP’s move as savvy, although it arrives at a time of great financial pressure, with the group’s measure of organic revenue dropping 6.9% in Q4 2025, and with further declines expected for the first half of 2026.    

“[T]here will undoubtedly prove to be significant benefits from this change, which is unquestionably the right direction for WPP and every globally-oriented agency group looking to service global marketers with scaled marketing-related services,” wrote Brian Wieser, principal at Madison and Wall, in a Substack post about the news. “As has been evident to us since at least the mid-2010s when Publicis, Dentsu and Havas shifted towards such a model, clients care little about individual agency brands, and conflicts can be managed without the separate silos that follow from maintenance of separate businesses.”    

Impact on employees

WPP’s Elevate28 strategy also promises to change ways of working at the network. A heavy emphasis is placed on AI, inclusive of supporting more “high-velocity” production. In addition, WPP is implementing a new talent framework intended to foster a “high-performance culture.” 

Rose took care to note that WPP does not plan to sunset or merge individual agency brands, but it will consolidate global, regional and market leadership while employee objectives and incentives will be more closely tied to client results and the overall success of the business.  

“We’ve got to ensure that our people are building new capabilities with a focus on AI so they can deliver what our clients need from us,” said Rose on the earnings call. “It’s about common incentives across the company that just unlock collaboration and frictionless resource sharing.” 

The strategy also aims to realize 500 million pounds, or roughly $677 million, in annualized cost savings that can be redirected into high-growth areas. Other agency networks are enacting similar plans, with a focus on steep labor cost reductions, providing a morale blow to a category already roiled by uncertainty and job cuts. While WPP did not detail any specific figures for layoffs, some of the makeup of the agency could look different in the near future.  

“In a business where most of our cost savings are people, that will mean a reduction of certain heads, but we will be reinvesting back into talent, different types of talent — commerce talent, influencer talent, much more analytics talent,” said WPP CFO Joanne Wilson on the earnings call.

Agencies are racing to prepare for the artificial intelligence era of advertising, enacting significant restructurings and acquisitions while standing up scaled AI solutions. Some analysts are skeptical about how far these bets can really go, stoking fresh uncertainty for an agency sector that is betting the farm that AI will reignite growth.

Half of agencies’ proprietary AI platforms will either wind down or become obsolete by 2029, researcher Gartner predicts. That’s because agency-built offerings need to contend with the rise of open-source AI platforms developed by what are known as hyperscalers — the Googles and Amazons of the world — that can service functions beyond marketing, according to Gartner. Open-source platforms are expected by Gartner to support more than 75% of enterprise AI deployments by 2028, gaining traction for their level of customization and favorable cost compared to proprietary platforms.

“I don't hear [agencies] talking about those platforms, whether it’s [WPP] Open or Omni or anybody else, being an enterprise-wide AI platform,” said Jay Wilson, vice president, analyst at Gartner for Marketers. “That’s the big disconnect or the big risk to agencies right now. They’re still kind of thinking at the marketing level, at the advertising level, maybe getting into CX.”

The threat of hyperscalers is tied up in the broader organizational influence, or lack thereof, CMOs wield on the client side of the business. While many marketing decision-makers have been early adopters of AI for tasks like content creation, chief information officers and related roles will more likely make the final call on what AI tools brands choose to adopt across the enterprise, according to Wilson. 

“Essentially, we believe that at an enterprise-wide level, the CIO is going to own that enterprise AI strategy, and a CMO who’s basically embedding with a WPP or an Omni or a Dentsu or whatever, is likely going to get disintermediated from that discussion,” said Wilson.

Weighing the risks

Agencies currently provide a lot of value in helping brands navigate AI disruption, per Wilson, including through upskilling, speed to market and drawing on knowledge from a wide client base and global reach. 

“What an agency provides that is not tech-dependent — meaning cannot be as easily commoditized — is that outside-in perspective on a client's business,” said Wilson.

Still, Gartner recommended that CMOs not become overly reliant on agency-built AI platforms, since agency relationships are liable to churn over time. Similarly, the costs and complications of migrating to different agency AI platforms could be cumbersome. The researcher suggested CMOs avoid locking into long-term contracts related to AI and instead push for initial proofs of concept and the right to terminate agreements without incurring penalties. 

Meanwhile, agencies need to consider how they can differentiate as the technology category at large becomes more democratized, commoditized and open source. The push from the ad-holding groups to master AI has dovetailed with a painful period of contraction, inclusive of heavy rounds of layoffs and the elimination of some legacy agency brands. The hit to the talent pipeline now could spell more trouble down the line, as qualitative capabilities and a degree of human discernment may be more important in the long run. 

“The agency value goes back to what the traditional agency values have been, which have been creativity, innovation and customer insight,” said Wilson. “Agencies can still provide value in applying the art on top of the science of AI.”

Since OpenAI released ChatGPT in November 2022 and kicked off the modern era of artificial intelligence in media and marketing, brands and agencies are increasingly shifting from asking the “whys” about the technology to answering the “hows." The challenges that advertisers face as AI increasingly impacts their businesses were a topic at the Interactive Advertising Bureau’s annual Public Policy & Legal Summit in March 2026.

“AI has already staked its claim on the digital advertising industry, promising to streamline and disrupt how we have typically done business,” IAB CEO David Cohen said in opening remarks.

In an example of AI-driven transformation, WPP has spent the last several years moving from tapping AI to drive efficiencies in certain use cases to undertaking larger organizational moves to centralize the technology. Through its WPP Open initiative, the ad-holding group has united AI efforts across creative, production and media teams and realized iterative improvements.

“The tools have been out there for a few years,” said Michael Palmer, vice president and transformation lead in North America at WPP Media, during a panel at the summit. “As an organization, we can finally leverage them in a coordinated and actually even manner across the board, and that muscle has been the real story.” 

WPP has put the onus for AI governance at the holding company level rather than the operating company level as the capital expenditures for AI technology and expertise are too high for its subsidiaries to manage — a pattern that is happening across WPP’s competitors, Palmer said. 

Yum Brands, the parent company of Taco Bell, KFC, Pizza Hut and Habit Burger, has also spent the last few years operationalizing AI across its organization, harnessing its brands’ first-party data to build a so-called “AI factory.” For Nicholas Godlove, global privacy counsel at Yum Brands, it was important to get as many stakeholders to the table as possible by setting up a formalized committee that wasn’t just “legal saying ‘no’ all the time.”

“It needs to be a conversation to get these things in place, much more than a lot of member relationships and a lot of technology,” Godlove said. “It is a conversation [about], ‘[What] can I do? When can I do it? What are the guardrails?’”

How AI is and isn’t working

AI has often been billed as a panacea for improving many of the marketing functions that companies like WPP offer, spanning solutions for creative, media buying, analytics and strategy. So far, the technology is working for WPP in many of the expected areas, including shaping creative ideation, building media plans and cutting down the timeline for certain tasks from days to hours. But by the nature of how they work, generative AI tools built on large-language models and transformers cannot generate anything totally novel or unique. 

“A lot of the tools from the last two or three years have made mediocrity cheap, but they have actually made excellence much more prized,” Palmer said.

As for how AI is reshaping the agency workforce, back office and support roles that can be automated have been the first to go, like the legions of media planners and accountants that used to fill floors of holdco offices. That will likely continue amid the rise of agentic AI, but AI-powered systems still need “humans in the loop” to control and contextualize outputs.

“Look for your operational pain point experts and empower them. That’s what we’re doing,” Palmer said of WPP’s AI work. “We’re really looking to push and enable with our expertise — our people are our best asset as an agency — so we are structuring the entire setup internally for us to basically have better, more efficient output from those individuals.”

As a marketer of restaurant brands, Yum has opportunities to use AI across loyalty programs, menu screens and drive-thrus, among other areas. For Gen Z consumers who already blanch at making phone calls or using traditional websites, there could be an opportunity for Yum to collaborate with OpenAI or another provider of agentic AI, Godlove suggested, with some caveats. 

“The question is: Is there a business risk? Yes. Is there reputational risk? Yes. Is there a technical risk? Yes. Is there legal risk? Yes. Where are you comfortable doing that? I think for us, we are really trying to focus on a lot of the operational questions,” Godlove said.

Beyond the levels of risk, operational questions will differ by category and industry. For Taco Bell, it takes a lot of training data to introduce concepts like “chalupa” or “quesarito” into an AI model, Godlove offered as an example.

Where AI is going

AI use at advertisers and agencies also differs by employee age. At WPP, Gen Z employees are at the spear point of experimentation and adoption, and the cohort’s use of the technology is monitored by older managers. While the push is coming from younger ranks, some of the best users of AI are Gen Xers who already have a great sense of tools, bottlenecks and friction points in existing workflows. No matter their age, employees have been encouraged to use internal AI solutions, rather than publicly available ones, so that client data doesn’t go out to general models.

“We’ve gotten quite strict about that,” Palmer said of the AI use policy. “We didn’t want to stop the experimentation or its use, but we basically paid a substantial amount of money, a huge upfront investment, to get those tools. We want to make sure everybody at office is using the proper tooling.”

The next step for AI development is around agentic tools that are fully autonomous and have quickly become the focus of agencies, ad-tech companies and industry bodies. WPP opened 2026 by launching an Agent Hub for client and employee use, and the network will be standing up agentic pilots with several publishing partners, Palmer indicated.

“Maybe in five years, maybe 10, we might be advertising to agents… That sounds like ‘Jetsons’ stuff, but we’re definitely going in that direction,” Palmer said. “As a brand, you may have to start placing agent-targeted advertising.”

While AI capabilities have improved, the rise of agentic AI presents a quandary as to what a corporation is and does when parts of the company are not human or human-controlled. Yum’s Godlove pointed to the possibility of “semi-intelligent, semi-rogue actors” with access to data and the ability to make decisions.

“Skynet,” said moderator Gary Kibel, a partner at Davis+Gilbert LLP, in a nod to the “Terminator” film franchise. “Sounds like a fun world.”