Key Insights from the 2026 Agency Edge Study with Susan Baier

Danyel McLellan [00:00:01]:
It doesn’t matter what kind of agency you run, traditional digital media, buying, web dev, PR or brand, whatever your focus, you still need to run a profitable business. The Build a Better Agency podcast presented by White Label iq will expose you to the best practices that drive growth, client and employee retention, and profitability. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McClell. Drew McLellan.

Drew McLellan [00:00:37]:
Hey everybody, Drew McClellan here from agency Management Institute. Welcome back to another episode of Build a Better Agency. This is probably for many of you, one of your favorite episodes that we do every year. In this episode, Susan Byer and I from Audience Audit are going to walk you through some of the bigger insights that came out of the 2026 Agency EDGE study. So I’ll tell you a little bit more about that in a minute. But first I want to do a huge shout out and thank you to our friends at White Label iq. As I have told you many times because we’ve been grateful to them many times, they are the presenting sponsor of this podcast and one of the things I really appreciate about the White Label IQ crew is that they are leaning hard into AI. And you’ll see how related that is to the topic of our research in a minute. But just like all of us, they’re trying to figure out where it fits, how it helps, what smoke and what’s real. But they’re not sitting on the sidelines. They’re not waiting for other people to figure it out. They’re putting serious time and money into figuring it out with their agency partners. Because they work exclusively with agencies across design, dev and paid media and AI. They’re thinking about AI in all the same context we are. And they’re helping agencies build out AI tools. They are exploring new AI offerings with agencies both for how they serve their clients and also how they serve the agency themselves. So honestly, these are the people that you want in your corner right now. All of us are trying to figure out where AI plays a role in our business and they are the partner to help you explore that. They can help you make sense of how these tools actually apply in in the day to day because they’re right in the middle of it themselves, building it out for agencies just like yours. So go check them [email protected] ami and learn a little more about what they’re doing with AI. And also if you can and if you will, please send them a little note and thank them for being a sponsor of this podcast. All right. Okay. So for the last 13 years, agency management Institute has partnered with Audience Audit, the company that Susan Byer owns. And we have gone out into the field and asked research questions, focusing on the clients of agencies. So it’s. Imagine if we had, you know, all of the prospects that you want to talk to in a room, and we were able to give them a little bit of truth serum and ask them a question. And we’ve talked about everything from why they hire agencies, why they fire agencies, what they want from an account service person. We, over the course of the years, you can buy, by the way, you can see all of these studies. There’s still, still incredibly relevant. You can read the executive summary of all of these studies on the AMI or audience Audit websites. But last year we talked about AI, but it was really at the very beginning of when AI was a conversation. So this year we went back and we had a much deeper conversation with your clients and prospects about how they’re feeling about AI, how they think AI is going to change their agency relationship with you, and lots of other things. And the results are really fascinating and insightful and give us a really good roadmap of how we need to think about our agencies today and in the future. And so today, Susan and I want to unpack some of that data for you and talk through some of the things that we learned. So without further ado, let’s welcome Susan to the show. Susan, welcome back to the podcast.

Susan Baier [00:04:15]:
Always great to be here with you looking at new data.

Drew McLellan [00:04:18]:
Drew, I know it’s exciting. Our 13th year of the Agency Edge, and I bet that our listeners could guess what we wanted to talk about. So again, for those of you that are not familiar with the Agency Edge, this is research that AMI partners with Susan’s company, Audience Audit. And we have partnered for the last 13 years. And every year we think about what you wish clients would tell you if you could put truth serum in their coffee. And that’s what we ask them. And so this year, no surprise to any of you, we were quite focused on how clients are feeling about AI. And you know, Susan, we talked about AI last year in the agency. So maybe let’s start by talking about the difference in our focus from 2025 to 2026, because I suspect a couple times, at least, we’ll reference the 25 study as well as. So let’s talk about the difference. So from your perspective, what was, what was in terms of our focus and what we were asking, what’s different between last year and this year?

Susan Baier [00:05:20]:
Well, I Think last year we were really trying to get a ground level understanding of how agencies, how clients were seeing AI used by agencies. And, and even we asked a fair amount about how the clients were using AI themselves. So really, where were the clients and where did they think the agencies were

Drew McLellan [00:05:40]:
and how did they feel about agencies even using AI?

Susan Baier [00:05:42]:
Exactly. Like where kind of where everybody. One of the interesting things that came up last year after we ran both the Agency Edge and the Agency Core, which is the leader focused study that Brian Gerstner from White Label IQ and I do together, is the 25 studies brought up some questions for us. For one thing, you know, I think a lot of people were surprised that clients didn’t want out of AI what agencies thought they wanted. There was a lot, there was a lot of agency concern about do it faster, cheaper, I can’t wait to fire my agency. And we saw the opposite in the 2025 data. What they, what clients wanted was better. They wanted better across the board.

Drew McLellan [00:06:27]:
And we, and they wanted their agencies to be their guide.

Susan Baier [00:06:30]:
That’s right.

Drew McLellan [00:06:31]:
And to bring AI into their organization, not just into the marketing department, but throughout their entire organization, and help them figure out how to master it and

Susan Baier [00:06:39]:
how to manage it. Right. That governance thing was big. And on the agency leader side, what we saw a lot of agencies saying last year in the Agency Core research was, big changes are coming. Agencies have to step up to provide value overwhelmingly. So, you know, when you and I met about the topic for Agency Edge and when Brian and I talked about Agency Core for this year, for me it’s really about on the leader side, what does that step up to prove value look like? How is that manifesting? And for Agency Edge, let’s make sure we’re reexamining what clients think agencies are supposed to be doing in the age of AI, with AI and without it, like, has there been a fundamental shift in what clients want from us as agencies? Because I think there’s a lot of fear around that. And I know there are a lot of agencies as you do that are, you know, trying to sort of chase that, like has made everything different. So that’s what, that’s what this year’s studies were about.

Drew McLellan [00:07:43]:
When, if I remember last year in 2025, there was also a, almost a little bit of a chicken little attitude amongst agency leaders. Like, not only is big change coming, but we’re going to be crushed by this big change.

Susan Baier [00:07:57]:
Yeah, a lot of that and a

Drew McLellan [00:07:58]:
lot of assumptions about what clients, how clients were going to take advantage of agencies because of AI. And I think we saw in both the 25 study and in this study that that’s really not the case at all. That, that clients, if anything, see their agency as, again, that guide, or the sort of the one who’s better prepped to help the client wrap their arms around AI and figure out how to leverage it.

Susan Baier [00:08:27]:
Yep. Well, one of the things that’s changed a lot since last year is in last year’s study, a lot of clients didn’t know if their agencies were using AI, but suspected they were. And. And there was a really much smaller percentage than I had hoped to see of agencies that were talking transparently to their clients about this. So it was that chicken chicken little situation. They were afraid to bring it up because they were afraid it was going to get a fart. Well, we learned that overwhelmingly that was not the case in 25. And the things that you’re talking about now with respect to agencies wanting real guidance, agencies wanting governance, have really grown in 2026. And now 85% of the clients that we surveyed this year said, yeah, we know our agencies are using AI. So that’s not a question anymore because most clients are using it too. So we went from like, are you freaking out about this? And do you even know about it? To ok, everybody knows about it. How is that translating from a client’s perspective into what agency should be doing for them?

Drew McLellan [00:09:31]:
Yeah, it’s become almost table stakes. Like, of course you’re using AI. It’s like, of course my agency uses a computer. Right. It’s.

Susan Baier [00:09:38]:
Right. And the interesting thing for me to see, and we’ll talk about this, is how is the expectations that clients have for agencies around AI. It’s not just, oh, yeah, you’re using it. They’ve got some. They’ve got some demands.

Drew McLellan [00:09:54]:
Yeah, yeah. Some pretty lofty expectations. Yeah.

Susan Baier [00:09:57]:
And it kind of reminds me, you remember the days when websites first became available.

Drew McLellan [00:10:02]:
Yep.

Susan Baier [00:10:03]:
And, you know, pretty quickly we had to start talking about what websites were good for and what they could do, you know, And I think we’re seeing a similar situation here, which kind of cracks me up to see that all these years later. But here we are.

Drew McLellan [00:10:16]:
Yeah, Everything cycles. Right?

Susan Baier [00:10:19]:
That’s right. So.

Drew McLellan [00:10:21]:
So when we step back, though, I think one of sort of overarching insights that came out of the data was how clients are going to define an agency’s value. And there were. There were three sort of big buckets of sort of hierarchy of what they wanted from us. And it was very clear. Everybody fell into one camp or the other, that one of these three was the priority for them, for sure.

Susan Baier [00:10:48]:
And we framed this within the context of, and the age of AI. We said, you know, now, you know, your agencies are using this. What do you want out of your agencies? And what overwhelmingly came out of this was three very different perspectives among different client groups around what an agency is there for. In a sense, clients are, you know, instead of saying, what are you doing with AI? How are you using AI? The question now becomes from clients, to what end are you using AI or anything else? It’s really getting back to what I see as some very fundamental things that agencies have returned to in a highly technologically shifting environment. There’s a lot of get. Let’s make sure we’re focusing on the foundational stuff.

Drew McLellan [00:11:40]:
Yeah.

Susan Baier [00:11:41]:
Which is fascinating. So. So we ended up with three groups in the study. The first group is, they’re called strategic stewards. And for them, the value of an agency is leadership in protecting and elevating the brand. That is, they are core brand protectors. And they are perfectly happy for you to be using AI as long as you’re not using it for anything that’s going to get them in trouble and risk the brand and instead are using it to continue to elevate the brand in a changing marketplace, continue to make it visible, continue to reinforce its credibility and build trust with its audiences. And as long as you’re doing that, they really don’t need to know what’s behind the curtain. That’s. They just want to make sure you’re focused on that. The second segment, which are adaptive accelerators, literally are the opposite of that. They like, they’re like, let’s move fast and break things. Like, you can throw out the brand playlist if that’s what we need to do. But let’s experiment, let’s innovate. Let’s get ahead of this incredible wave and take advantage of all the opportunities that this new technology in this new marketplace are giving us. They’re called adaptive accelerators, and they really want agencies that are willing to run far fast and apologize later.

Drew McLellan [00:13:04]:
Yeah. And again, so on the cutting edge. Always experimenting with new tools, always pushing the envelope of what the tools will do. Much more open to risk, for sure.

Susan Baier [00:13:16]:
Yeah. But it’s not, again, it’s not about the tools themselves. It’s about how are you making us look as a client. Where are you taking our brand with this. Right, yeah.

Drew McLellan [00:13:26]:
Move. We need to move the needle.

Susan Baier [00:13:28]:
Yeah, Move it. And don’t be afraid to try new things. We like looking innovative. We like looking experimental. We think it puts us on the cutting edge.

Drew McLellan [00:13:37]:
And I think part of it is too willing to try things before they become common. Like, I want to be out ahead of the crowd.

Susan Baier [00:13:45]:
Absolutely.

Drew McLellan [00:13:45]:
I want to be one of the first people who are doing these things or offering our. Our end customers these things, because that’s part A, it’s part of our brand, but B, I think there’s an opportunity sort of season, and I want to make sure I take full advantage of it.

Susan Baier [00:14:00]:
Gives us a market advantage.

Drew McLellan [00:14:02]:
Yeah.

Susan Baier [00:14:02]:
While the doors are open. Absolutely.

Drew McLellan [00:14:04]:
Yeah.

Susan Baier [00:14:04]:
And for what it’s worth, both of those first Two segments are 32% of our audience. So this is not like, oh, we’ve got 80% strategic stewards, and we got a little sliver of these other folks. So the third group that is the remainder is, we call them performance pragmatists. And every agency leader listening to this podcast is going to recognize these folks. They’re like, sure, go ahead, use AI or anything else you want, but your job is to deliver measurable results efficiently on my spend. Right. So, yeah, I don’t.

Drew McLellan [00:14:35]:
I don’t care if you do it with an abacus or AI, but that’s right.

Susan Baier [00:14:40]:
I don’t care with AI or people. I don’t care about those things. But your focus needs to remain on what I hired you for, which is delivering a return on investment for my spend. So we have these three, and it’s fascinating to me, like you, I talk to agencies all the time, and I also have the luxury of surveying agency leaders and seeing that data, which, you know, you’ve seen too. Right, Right. But what’s fascinating to me is this disconnect I’m feeling between what is understandably just overwhelmed agency leaders who are dealing with economic uncertainty, market forces, tariffs affecting their clients, AI training, upskilling, all of

Drew McLellan [00:15:26]:
this kind of stuff, a changing workforce that has very different expectations and demands.

Susan Baier [00:15:32]:
Yeah, right. Yeah.

Drew McLellan [00:15:33]:
There’s a lot of turmoil.

Susan Baier [00:15:34]:
There’s a lot. And my. My fear is that many of us are getting really overwhelmed and focusing on the shiny object situation. How can we get trained up? How can we do this? How can we certify in this? How do we. Whatever. And maybe losing sight of what these clients are focused on, because it sure ain’t that. It really, really isn’t. And so I just think it’s a good reminder for us as agency leaders how important it is to remember what we got hired for, what our clients pay us to do, because they have not forgotten they have not forgotten. You know, one of the interesting things about these three segments too for me is like okay, how are you going to do all of those three things if you’re going to try to stay sort of a generalist and serve anybody, how are you going to be known as the brand steward agency and the move fast and don’t be afraid to break things agency and the you know, number one, focus on return on my investment from a marketing spend standpoint.

Drew McLellan [00:16:38]:
Well, I think the reality is you can’t. Right.

Susan Baier [00:16:41]:
And that’s what we’re seeing.

Drew McLellan [00:16:42]:
Yeah, I think the, and, and as you know, I have been preaching this for a long time. The generalist agency is going to be extinct and it’s just a matter of when. And so you know, you’ve got to pick a lane in terms of how you niche. And so that might be by industry, it might be about audience, but it also has to be to this point how do you deliver the value to your clients? And a brand agency and a performance agency are very different beasts.

Susan Baier [00:17:13]:
Right. Sure. And built differently as they should be. Right. And what’s interesting about this is you’re right. Like and you and I have been talking and exploring niche for probably the 13 years doing it and we have seen some increases in the agency core study this year. Agency leaders cite the differentiation problem almost as much as the pipeline problem. So they know that differentiation is really important. But the actual percentage of agencies who are said they are strongly embracing a niche and marketing, it hasn’t budged.

Drew McLellan [00:17:46]:
Yeah, I think it’s one of those things like, you know, you should exercise every day.

Susan Baier [00:17:50]:
That’s exactly what it is.

Drew McLellan [00:17:51]:
But it doesn’t mean that you’re going to get out of bed and put on the tennis shoes. Right.

Susan Baier [00:17:55]:
Yeah. So the awareness is up. But I think again and probably because of just everything that’s going on and we see the open ended responses from leaders who say, you know, when we ask them what’s in the way then it’s what you’d expect. Like it’s crazy times, you know and everybody’s trying to feed their, their kids and put their kids through school and take care of their teams and it’s not easy times to do that. So yeah, it’s just I think a good, I think it’s a good reminder and I do think it will encourage agencies to think about which of these sort of value promises they’re. They’ve made the clients.

Drew McLellan [00:18:28]:
Yeah.

Susan Baier [00:18:28]:
And which ones they can deliver to clients and, and focus on that. It’s going to matter.

Drew McLellan [00:18:33]:
Yeah, I think you’re right. You know, I think one of the other differences, and we talked about a little bit before that, one of the differences even, and think about it, it was just a year ago between the 25 study and the 26 study. You know, in the 25 study we were asking like, is it okay that your agency is using, are using AI? And today, you know, really the clients have shifted and said, I want to understand how my agency is operating in a world where AI should absolutely be a factor. And so it’s become a de facto, like I said, table stakes, which is in 365 days, a pretty dramatic shift given that’s dramatic given that, you know, most people didn’t have a chat GPT account three years ago. Yeah, I mean, when you think about the acceleration of change, and if you remember my keynote from last year, you know, what I talked about was, look, we have to stop being surprised by change. Change is never going to stop coming, it’s going to keep coming faster. And so we have to be the ones that manage, anticipate and manage that change as opposed to going, something’s changed. Right.

Susan Baier [00:19:37]:
Something changed. Let’s freak out. Right, Exactly. And I think it’s telling that the question that clients seem to be asking these days isn’t, AI makes you faster and you don’t have to have people, so how much money are you going to save me?

Drew McLellan [00:19:54]:
Right.

Susan Baier [00:19:55]:
The question is, what is your role now? Given all of that, how do you bring value? Because clients don’t want to get rid of their agencies. And there’s some really, really compelling data in this study about the extent to which folks who are clients now strongly believe that having an agency on board is a huge advantage to them and will continue to be so. But I think their question, and understandably, because I don’t think we’re doing a very good job talking about this, is how does your role shift for me, knowing that you’re using AI for some of the things that were a big part of your role? Right. How does that work? How is AI helping? Clients are very focused on strategy. We’re going to talk about that. How is AI helping that? How is AI making it better governance? We’re going to talk about how are you making sure that we’re doing the right things in the right way with AI and they’re moving our objectives forward. So I think they’re just, I think clients have become more sophisticated and I think they’re asking for more sophistication from us in terms of Interpreting this huge shift for them so that they can assess our value. And I think the agencies that can have that conversation proactively are going to be in a much better shape than agencies who get caught flat footed when they’re asked.

Drew McLellan [00:21:21]:
Yeah, you know, one of the things we do every year is, you know, we’re tracking trends all the time and in our peer groups we do a trend report. And I see a parallel. So one of the trends we’re seeing clients talking about a lot is that they need the role of their account person to change that. They don’t need that person to be an order taker. They don’t need that person to send minutes after the meeting and do all of the administrative stuff. They need a strategic thinker in their account service person. And I think we’re seeing the same thing in our study, in the agency edge study, which is okay if execution is easier, like because AI is letting you do these things faster and better and more efficiently, then where can you bring me value higher on the value chain?

Susan Baier [00:22:07]:
Right.

Drew McLellan [00:22:07]:
Again, more strategy. I want to have bigger, deeper conversations, more business conversations, because I know the stuff I used to pay you to make the stuff. I know you’re using tools to make this stuff, which is awesome because then I get more of your thinking time. But I think, I think that’s going to change how we staff our agencies, how we train our agencies. Because to your point, clients are very clearly in this year’s study saying, I want a more sophisticated, sort of intimate, intellectual relationship with my agency.

Susan Baier [00:22:41]:
Mm. Yeah. And it really parallels something I see in the research industry now too, because, you know, there’s a bunch of companies out saying, hey, you can get AI respondents to all your surveys, so you don’t need to worry about paying real people or determining if they’re bots. We just have AI clones out there that can do this for you. And the conversation that needs to be had with clients in that situation is, look, that may be okay for some things when you’re exploring initial concepts, but it doesn’t replace actual people giving you opinions about things that haven’t been asked before, that haven’t been received up before. Right. And I think the same is sort of true with your account supervisor manager situation. It’s like there are some level of things that can make their job a lot easier. But the strategy, the understanding your business kind of stuff, AI isn’t going to be very good at that because your business is unique as a client. Right. Everybody’s is, your goals are different, et cetera. So it’s sort of like a layer cake of AI helping out with some of the things that it’s good for. But we as agencies need to be talking to clients about where that value is with AI and where our value is on top of it.

Drew McLellan [00:23:54]:
Well, and we also have to remember that just like we’re experiencing change at a speed we have never experienced it before, their businesses are too. And so AI can’t know about stuff that’s never happened before.

Susan Baier [00:24:05]:
Right? That’s right.

Drew McLellan [00:24:07]:
And so that’s where our insight and our imagination and our ability to connect dots that don’t look like they connect at all is the value proposition.

Susan Baier [00:24:16]:
Yeah. And that’s one of the. For me, the most rewarding insights from our study this year is the extent to which clients are saying, strategy is what we want from you. Now, we saw that last year, but we saw that in an environment where they weren’t sure how AI was playing a role. They didn’t know how much their agencies were relying on it. They didn’t know how comfortable they were. This is an environment where they do know those things.

Drew McLellan [00:24:41]:
That’s right.

Susan Baier [00:24:42]:
And they are still saying, look, a this I just bring me new ideas. We’ve heard bring me new ideas forever. They’re still saying it. Guide our strategic decisions. They’re still saying it and challenge us. The majority of clients would fire an agency that didn’t challenge them, which I think is a signal to don’t just take what you get off of ChatGPT and try to sell it to me like. Or don’t let me do that to myself. Right. Like, I want real chops on these conversations, like you said, real depths. And so just executing stuff is not differentiating anymore. It just isn’t. But that strategy thing, it’s not that we’re just talking about it because we’re strategists. That’s what they want. Which is really reassuring, I think, for any of those agencies out there that are doing strategy. Now, we know there are agencies out there that are not focusing on strategy, that haven’t focused on strategy. And I think they’re going to be in trouble if they don’t, because that’s. That’s what clients. That’s what they want. That’s what they want.

Drew McLellan [00:25:51]:
But again, I mean, if you’re listening to this and you’re thinking, well, I’m the, you know, when, when we have to have a big strategy conversation, I have to be in the room because I don’t have anybody on my team that can have those conversations that should give you pause. Number one, you shouldn’t be the only one in the room. Number two, you’re going to have to find a way to groom and grow or hire people who can have those kind of conversations and have the confidence to ask questions. And as you were saying, Susan, challenge a client and go, you know what? I’m not so sure that’s true. How would we prove that?

Susan Baier [00:26:28]:
And they need to see the leaders of their agencies doing that in practice because no young person without a lot of experience is going to feel comfortable going in and challenging a client until they see how that can be done. Respectfully, productively, supported by data, supported by, you know, and make it not a pushback. We don’t want to do that. You’re dumb. But instead a real, you know, senior level conversation about what is the right thing to do with, with evidence and ideas and all of that kind of stuff that have been processed. I think that’s just going to be really important. So, yeah, it’s a good point, Drew. We got to get people in the room with us when, when that is happening so that they learn to do that too. And frankly, so that our clients learn to expect it. Because we think, I think that they don’t want that pushback.

Drew McLellan [00:27:18]:
Right. And they want order takers. Right.

Susan Baier [00:27:20]:
And the data is clear that that is not true. They do want that. And in fact, they’re more likely to get rid of us if we, if we don’t push back.

Drew McLellan [00:27:30]:
Yeah, yeah, we’re going to take a quick break and then we’re going to come back about expectations. Because again, you could assume that clients think that life is easier for agencies and their relationship with agencies and so they can lower their expectations. But if anything, I think what we found in the study was that expectations were increased. So let’s take a quick break and then we’ll come back and talk about the study from that aspect in a minute. We’ll be right back. All right, we’re taking a quick pause. And while we’re on this pause, I want to answer a question that comes up all the time. In my conversations with agency owners, I’m often asked who we trust, when agencies are thinking about building long term remote teams, especially when they want to do it properly and avoid costly hiring mistakes. And more and more, our answer has been Noel at jobrack. I’ve heard consistently good feedback from ami agencies who’ve hired him and his team. I’ve seen the quality of the relationships they’re building, the longevity of the folks that they are placing on AMI Agency teams and after having him speak at the summit, I know he really understands agency hiring, not just recruitment. So because of that we have partnered with Job Rack and they’re a paid sponsor of the podcast. If you are even considering a hire this year and you want to think through it properly, Nolan and his team have put together a really solid hiring playbook. You can find it at jobrack.com ami One more time. Jobrack.com ami hey everybody, thanks for listening today. Before I get back to the interview, I just want to remind you that we are always offering some really amazing workshops and you can see the whole [email protected] on the navigation head to how we help. Scroll down and you’ll see workshops and you can see the whole list there with descriptions of each workshop. They are all in Denver and we’ve got them throughout the year for agency owners, account Execs, agency leaders, CFOs. We have a little something for everybody. No matter what it is that you’re struggling with, people, new business, money, all of those things we’ve got covered. So check them out and come join us. All right, let’s get back to the show. All right, we are back with Susan Beyer and we are talking about the study that AMI and Audience Audit partners with and has partnered together for the last 13 years, really digging into the mind and motivations and worries and hopes and aspirations of agency clients. And this year, no big surprise, the topic was AI. And so I was saying before the break that it would be easy to think that I think one of the, one of the fallacies that AI is putting in front of people is that every, everything is going to get easier. Easier and faster. Right. And, and, and I think what the study showed is that the clients were like, the great news is that some things are going to get easier and faster and we want to take advantage of that by getting more and better. Right? Yeah, more and better. Right?

Susan Baier [00:30:45]:
More and better. Like, I think it’s funny, you know, there have been conversations online recently about agency leaders who are like, man, this AI stuff was supposed to save me time. I’m spending more time than ever because of, and it’s helping. But I’m not saving hours.

Drew McLellan [00:31:00]:
Right.

Susan Baier [00:31:00]:
And I think clients have experienced that too. So I think everybody knows that this can easily fill whatever time you thought you were going to save because you get going, you get better thinking, you get pushback. If you’ve trained your AI to be a good thinking partner for you, it really deepens Your involvement in the work that you’re doing. But I think one of the things we had last year was a question about how important is it that your agencies are talking to you about, you know, how they’re using AI, when they’re using it, why they’re using it, which tools they’re using. Well, we asked the question again this year, but I added a new one based on what we saw last year, which was how we are protecting their information when we are using AI for them. And 65% of clients said that is basically essential to let them know how they are, how we’re protecting their information when we’re using AI. We didn’t have that question last year and it outstrips every other one of those questions. So this is a huge issue. And when we asked clients, to what extent do you hold your agencies responsible for AI’s contributions to your marketing performance, not to your agency’s use of AI for your marketing performance, to your marketing performance overall, I could not believe the responses. I don’t know if they surprised you to the extent they did me. 54% of clients held the agencies responsible more than they themselves.

Drew McLellan [00:32:41]:
Yeah, right.

Susan Baier [00:32:42]:
So, so 39% said we’re supposed to

Drew McLellan [00:32:44]:
be, we’re supposed to be the experts guiding them along in all.

Susan Baier [00:32:47]:
That’s right.

Drew McLellan [00:32:48]:
Yeah.

Susan Baier [00:32:48]:
So 39% said our responsibility is equal, our agencies and my organization. That’s 39%. That 36% said agents are primarily responsible and 18% said agents are completely responsible for that. So that is a whole new level of expectation from our clients. Not about how we’re using AI. Right. But how everything is contributing to that marketing performance. And again, marketing performance goes back to those segments. What does marketing performance mean? Right. And it’s going to be different for different folks. These numbers are so dramatic that I have started counseling agencies to consider volunteering to be responsible for the use of AI. The governance of AI in their clients marketing, whether it’s for their in house team or just for their agency. But saying, look, why don’t you let us help you build the guardrails around this. We keep our fingers on the pulse and continue to maintain it and then continue to make sure that everything you’re doing aligns with that and doesn’t get, you’re not coloring outside the lines. Why don’t you just let us manage that for you from a strategic and governance standpoint? And it is, it is overwhelming how many clients want that this year. And I don’t think, I don’t think a lot of agencies are thinking about that.

Drew McLellan [00:34:23]:
What’s interesting, because again, in this trends report that Danielle and I are doing in the peer groups, one of the trends we’re tracking is that clients are shrinking their in house teams. And one of the reasons why they’re shrinking their in house teams is because they cannot get internal approval through legal departments or whatever to do the things they want to with AI. So they’re shrinking their internal teams because they want to shift that responsibility and that work to their agencies who are not held as accountable internally inside their organizations as they are. So it aligns exactly with what you’re saying, which is we need our agencies to, to take the lead on this and to teach us how to do it. But to your point, also to provide the governance and the guardrails because our legal departments and our hires up and our C suite are so worried about the privacy lawsuits and all the things that people think might happen someday that we are handcuffed in what we’re allowed to do internally, but we’re allowed to do it through our agency.

Susan Baier [00:35:31]:
Interesting.

Drew McLellan [00:35:32]:
So again, like last year where we pointed out there are several revenue opportunities here for agencies.

Susan Baier [00:35:38]:
Oh my gosh. So one of the things that you wanted to do this year, specifically in the agency Edge Drew, was ask clients to look ahead five years and tell us what’s going to be important to the success of agencies that have made it that far. What is it? So we gave them a list of like 10 different things, you know, brand strategy, creative and idea generation, audience Insight, media planning, etc. And we said you could pick up to three that you think are going to be most important to agencies who will succeed over the course of the next five years. Number one, at a shocking 52% when you can only have three choices out of a list of 10 that is significantly overwhelmed, 52% chose AI, strategy enablement and government governance. Number one on the list. The next on the list is technology selection, integration and optimization. At 32% I was going to say.

Drew McLellan [00:36:34]:
And it was 20 points below.

Susan Baier [00:36:36]:
20 points below, yeah. So I mean this is, this is really important for agencies to think about delivering as a service. And I think it aligns very well with clients desire to have an agency guiding them strategically in the age of AI. Right. We have to know about AI to do that effectively and that puts us in a very good place to say look at least in terms of your marketing, let us take the reins on this and work with you not to set it up once and forget it because this industry is changing overnight, but to Continue to make sure that your goals are met. And we’re not putting things at risk with AI, our team or your team when it comes to marketing.

Drew McLellan [00:37:24]:
Well, and again, it’s not a, oh, guess what, we built a bot and we loaded up all of our meeting minutes into it so that it sounds like you. It’s not that. I mean, every agency on the planet’s doing that now. It really is about helping. It is about being a business partner that helps them strategize how AI can give them a competitive advantage in all aspects of their marketing and sales and, and probably client or customer service as well. So from. From the prospect knowing about your. Your product or service to your customer or client being delighted with your product or service, there’s opportunity for AI to play in all of that. And they’re looking to us to tell them how to leverage that and harness it to give them the advantage. And so if, you know, we’ve talked about the buyer’s journey forever as agencies, so now it’s really about how can you weave AI through the entire buyer’s journey to elevate and escalate that all of the opportunity that a client has at every stage of that journey, that’s what they’re asking for.

Susan Baier [00:38:37]:
Yeah, I think, you know, I think the opportunities are exciting. What concerns me is how long the door is going to be open for agencies to step up before clients just decide to take things into their own hands. So one of the things we asked this year was if you were hiring a new agency, would that agency, being a recognized expert in the use of AI and marketing, have an advantage over other agencies that don’t have that reputation in being considered? And the results are shocking. 83% of clients said that that reputation as an expert of AI and marketing would probably or definitely give you an advantage that can chop an agency off at the knees right away, even from consideration. So we have to step up, and we can’t fall back to talking about value and not talk about AI. We have to talk about these things together, and we have to start talking about them in time to build a reputation around that in the agency. Core research this year, we see one segment of agencies that is doing very well have far fewer challenges with things like pipeline and differentiation, and are not worried about AI as a threat to their agency. But those agencies were in a strong position with a strong niche and reputation for that niche and expertise before AI showed up.

Drew McLellan [00:40:16]:
Right.

Susan Baier [00:40:17]:
And so now they’re not as worried because they’ve already got that reputation. And then we see the other 2/3 of agencies kind of scrambling to try to figure out how to build a reputation on differentiation and expertise that they haven’t started to build yet. And how quickly can they do that? And so I can’t stress strongly enough between the 2025 and the 2026 in things I’m seeing both on the client side and on the agency side that we have got to get hopping. It’s not enough to know what we need to do. We have to start moving as agencies on it because ultimately clients will decide that we can’t get there fast enough, that we cannot, that they, that we just, we can’t do it for them. And they will move, some of them will move it in house. And the folks who are going to be around already have that reputation built and started early in this process. So I’m hoping that the research helps our agency friends and colleagues sort of see the writing on the wall. And if they are struggling to be differentiated, if they are struggling to build a reputation on their understanding of AI with clients and prospects, they’ve got to find a way around that problem and they’ve got to do it quickly. They’ve got to sort of push back some of the other overwhelmed stuff and focus on what matters. Because the next five years I think are going to be really defining for agencies.

Drew McLellan [00:41:47]:
And I will also say that we’re not saying that you should rebrand yourself as a human led AI agency because everybody’s going to be an AI agency or you’re not going to exist. And so don’t label yourself something that’s going to be a duh in a year. Right. It’s not that, but it is, it’s interesting because again, in this trends report, one of the things that we, that we’re tracking is, and this stays true, I think about the, the study you did around thought leadership with predictive ROI dec, you know, almost a decade ago where you were defining sort of what, how, how a client would define an expert. And what we’re hearing loud and clear in the trend right now is just because you say you’re an expert doesn’t mean you’re an expert. I want. So Forrester did a study.

Susan Baier [00:42:39]:
Yeah.

Drew McLellan [00:42:40]:
And the study came out and basically said, look, the average, the average person who’s buying agency services wants validation from up to 10 people outside of their own organization that you’re an expert before they believe you’re an expert. So it doesn’t matter what you say, doesn’t even matter what somebody inside their own company says. But they’re looking for outside validation. So to your point, not only do you have to. Not only do you have to build the expertise so that you can comfortably claim expert, that you’re an expert, but you have to earn that reputation with third parties.

Susan Baier [00:43:13]:
Yeah. Which takes care of that.

Drew McLellan [00:43:15]:
They’re the ones who are saying you’re an expert.

Susan Baier [00:43:17]:
Right, that’s right. That’s right. I mean, and so there is really no time to lose with respect to this. And it’s interesting because in the agency core research, we see a big group, like a third of agencies that are really sort of trying to grab AIs. The brass ring that’s going to save them. No, and it won’t alone.

Drew McLellan [00:43:39]:
Right.

Susan Baier [00:43:39]:
They’ve got to have AI as applied to healthcare, AI as applied to, you know, whatever. They’ve got to have a strong niche around the use of AI, because by, in and of itself, there are just too many agencies that are saying, hey, we’re AI experts, and leaving it at that. And clients are past that. They’re looking for true differentiation. You know, we used to talk years ago, Drew, about what made you different. Right. And what a niche really look like. And it could be this or this or this or this. I think we’ve gotten to the point now where it can’t be this or this or this. It’s got to be this and this.

Drew McLellan [00:44:19]:
Yep.

Susan Baier [00:44:19]:
And this.

Drew McLellan [00:44:21]:
Yeah.

Susan Baier [00:44:21]:
And so the agencies that aren’t there yet need to. Need to focus on getting there because it can be very difficult after a certain point to develop that reputation amidst a bunch of agencies who have had it for a while.

Drew McLellan [00:44:35]:
I, like you, I have a worry that there are going to be some agencies that just fall too far behind and get lost in the shuffle. However, I also think this is a golden age for agencies who aren’t behind or hurry up and get going. I just think the opportunities are vast, and so the. I think that profit margins are going to just get bigger and, and healthier, and I think the opportunities are going to get greater. And so I think it’s an exciting time to own an agency if you have the chutzpah and stamina and energy to, you know, really, really run at this and, and really invest in being better. I mean, I think in some ways that’s what this study is all about. We. We expect our agencies to be even better than they are today.

Susan Baier [00:45:26]:
Yeah. Yeah. It’s so true. And what’s really reassuring to me as an agency owner is that, like last year, and even more strongly this year, I can’t I can’t say strongly enough. Clients value us. They want to continue working with us, they want our expertise. Overwhelmingly, clients do not feel that getting rid of their agencies is the right thing to do. Not at all. So we need to get that bugaboo off our back. And I think so much of this can be handled with just conversations, intentional conversations with agent, with our clients about the value that they see in having us, why they hired us, the goals they have and our ability to talk with them about between their agency and themselves and their in house team and AI tools, we can get them where they want to be. Because I think for a lot of clients that’s what they’re waiting for. It’s just not what they’re hearing. You know, they’re just, they’re just, we’re, we’re so focused on what tools are we using. And you know, this kind of stuff that we kind of have pulled away from some of the foundational stuff that the clients are looking for. So I don’t think it’s an insurmountable problem for most agencies, but it probably does require maybe a little shifting of strategic focus in the engagement with your clients, which I don’t think could start soon enough. Really?

Drew McLellan [00:46:55]:
Yeah. Yeah, you’re right. You know, as always, the study is so rich and you and I have just barely scratched the surface. And so, yeah, before I let you go, I want to make sure everybody knows. So Susan and I will be hosting a webinar on July 11 at 1pm Mountain will have the Zoom link in the show notes. You are more than welcome to join us. We are going to literally walk you through every question in the study and have this kind of conversation about all of it. It usually takes us a couple hours to get all the way through it and, and we’ll stick around and answer your questions afterwards.

Susan Baier [00:47:32]:
Absolutely.

Drew McLellan [00:47:33]:
But again, that’s June 11th at 1pm Mountain Zoom link will be in the show notes. Susan and I will both put it out on our social channels. We’ll be sharing it out with you. If you were at the summit, then you’ve already, you already know when it’s going to be. But if, if you miss the summit this year, then this is your next and best opportunity to hear more and more about the study. So Susan has always loved doing this work with you and always grateful that, that we get to keep doing it together. And me too. I feel good about the fact that, you know, we are helping agencies put the spotlight in the right places so that they can see the path Forward. I feel like that we do that every year with this data. And I think the path that the spotlight is on is really paved with gold. I really do believe that, that for a lot of agencies, they are about to enter the golden years of their business if they really sort of hear what clients are saying and really step up to meet that need. Because I think, if anything, clients are going to be hungrier for a great agency relationship than they are today.

Susan Baier [00:48:39]:
Well, and remember, you and I do, and probably a lot of our listeners do, when digital marketing arrived on the scene and there was a lot of pooh, poohing and naysaying about how this is going to work and people are never going to want to do that and blah, blah, blah. And the agencies who really stepped up and understood that landscape and incorporated it into providing value to agencies were tremendously successful in a whole new world. And I really do think we’re on the cusp of that opportunity. Again, I’m tickled that we now have sort of both sides of the telescope for agency leaders. How are your colleagues feeling? What are they dealing with and what do they think is going to happen? And then this view of clients, it gives us a really rich opportunity to understand what’s going on. And I hope it’s helpful to our folks out there who, you know, a lot of them have had a tough year and they’re tired, their people are tired. There’s been a lot to deal with. I think there’s a bright light at the end of the tunnel. And I think the agency edge clearly points to the direction that we need to be thinking about as agency leaders, for sure.

Drew McLellan [00:49:41]:
And, you know, we’ve, we’ve mentioned both the agency edge and the agency core study several times in our conversation. So also in the show notes, everybody will have links to both of those studies for you. So you can, you can see they’re both, they’re basically two halves of the whole. How are agency leaders feeling about the ecosystem and how are clients feeling about the ecosystem? And it’s fascinating to see where we all agree and where we don’t agree and where you can see there’s going to be conflict. And so.

Susan Baier [00:50:09]:
Highly recommend.

Drew McLellan [00:50:11]:
Yeah, highly recommend you download both studies.

Susan Baier [00:50:14]:
Yeah, I think we’ll be talking about both of those studies for the next year. I think there’s enough in here to really have conversations with, with agency leaders and people who serve them to sort of understand our way through the thicket a little bit. But like you said, big opportunity on the back end.

Drew McLellan [00:50:29]:
All right, Susan, thank You, as always, for being with us.

Susan Baier [00:50:32]:
Thank you, Drew. Always. Great partnership.

Drew McLellan [00:50:34]:
You bet. All right. All right, guys, so here’s homework. First of all, put June 11 on your calendar, 1pm Mountain. Come join us live and participate in that conversation. Ask questions. One of the great things is you can say to Susan, well, how did women feel about that? Or how did people over 40 feel about that? And she can click a button and we can look at all the data from lots of different lenses. So it’s not a static presentation. It really is. We’re literally, like, walking through the data with you and can have you ask us how to telescope into the data in a way that’s valuable to you. So we’ll do that on June 11, but also download both studies and then look in the mirror. Look in the mirror and figure out, like Susan and I were saying at the top of this conversation, going to be pretty tough to be everything for everybody anymore. So you’ve got to decide what kind of a business you want to have and who you want to serve and how you want to serve and then go all in, all in on that with, you know, in an analog way, in a computer way, in an air way, in all the ways you got to go in with your team, all of it, because that’s how you’re going to win this game, is that you are going to be a recognized specialist and expert at what you do and what differentiates you from the other agencies out there. So that’s your homework. Before I let you go, two quick things. Want to give a shout out and thank you like I did at the top of the hour to our friends at White Label iq. As you know, they are the presenting sponsor of the podcast, so you can learn more about them@White LabelIQ.com AMI and last, but certainly not least, I don’t get to do this kind of work if you don’t keep listening. And I don’t get to have these kind of conversations if you don’t keep coming back week after week. So I am super grateful that in your crazy, busy world, you find a way to spend an hour with me and great guests like Susan. So thank you for listening, thanks for coming back, and I’ll be back next week, and I’m counting on you to come back, too. Okay? All right, see you then.

Danyel McLellan [00:52:34]:
Come back next week for another episode designed to help you build a stronger, more stable and sustainable agency. Check out our workshops, coaches, coaching and consulting packages, and other professional development [email protected].