By Max Fellows, Founder of allpoints
Five Big Shifts Reshaping the Industry

As we reflect on 2025 and look forward to 2026, it is no secret the agency sector has experienced a slow down in growth and competition has intensified. The traditional agency model still remains under sustained pressure across the board from clients, to procurement, talent shortages to technology. However, opportunity still exists and 2026 will be the year for agencies who are prepared to adapt quickly and decisively.
Here are five major shifts that will be reshaping the agency industry in 2026, and what agency leaders must do to stay ahead.
1. The Market Will Experience Slower Growth, With More Competition And Tougher Choices
With over 25,000 agencies operating in the UK alone, oversupply has become one of the industry’s biggest structural challenges. Where agencies once enjoyed 30–40% year-on-year growth, most are now operating in a far more constrained environment, with typical growth sitting closer to 6–8%.
The commercial reality is stark, with widespread revenue pressure and margins under constant strain, means many agencies are operating with increasingly thin cashflow buffers. On the opposite end of the scale, buyers within the market will look to consolidate spending and favour agencies that offer scale, as well as multi-disciplinary services with global reach.
2026 will be a barbell market, where well positioned agencies with clear differentiation will continue to win and generalist or undifferentiated agencies will be squeezed. Agency leaders and owners must make tough strategic choices by doubling down on defensible niche offerings or rethinking them completely whilst expanding capability through partnerships or acquisitions.
2. AI Will Move From Experimental Into Adoption
2026 will see AI move from a nice to have, side project to a fundamental operational capability within the agency landscape.
Currently only a minority of agencies have implemented a fully formed AI strategy as part of their daily operations. Many are still experimenting with tools in silo and only using AI for pitching and lead generation.
Early adoption agencies are already seeing clear advantages with faster delivery, leaner teams and more scalable offerings. Most notably, AI is shaping client expectations and brands want agencies that can move at the same pace as their internal teams, this can be achieved through the use and adoption of AI. Agencies who choose to ignore AI in 2026 will get left behind.
In 2026, agencies will need a comprehensive AI strategy that covers:
- Operations and delivery efficiency
- Commercial modelling and margin protection
- Productisation and IP creation
- Data capture and insight generation
3. Charging Models Will Shift From Time to Value
The traditional day rate model has been under sustained attack for some time now with value at the heart of the debate. Procurement pressure and budget scrutiny from the client side has exposed the flaws of charging purely for time and resource.
Clients are leaning much more towards outcomes and as a result, agencies are moving towards value-based pricing, with performance-linked fees and profit-share arrangements at the forefront of the agency pricing model. This shift reflects a deeper truth within the industry, that clients hold impact to a higher regard than volume of activity alone.
For 2026, agencies will experience challenges on two fronts when it comes to implementing the correct charging strategy. First, agencies must be far clearer on the value they create commercially, not just creatively. Secondly, they must build financial models that support this shift from time to value, ensuring risk is priced properly and margins are protected.Those that succeed in doing this will unlock stronger client partnerships and more scalable revenue.
4. Centralised Budgets and the Evolving Role of Procurement
Another major shift is the centralisation of marketing budgets, decision-making power is slowly moving away from local teams and into global or regional hubs, often controlled by procurement.
This changes the buying dynamic significantly, with procurement no longer just a cost-control function, it is now shaping agency rosters and contract structures. Agencies that fail to understand this evolution risk being filtered out before they even reach the pitch stage.
Winning in 2026 means speaking the language of procurement and knowing how they operate inside and out. Agencies need:
- Clear, transparent pricing
- Demonstrable ROI and outcomes
- Scalable, repeatable delivery models
- Risk mitigation and compliance
Agencies that are able align brand ambition with procurement realities will be far better positioned than those that treat procurement as an obstacle rather than a stakeholder.
5. M&A Continues With Succession Being The Silent Driver
M&A activity in the agency sector will show no sign of slowing down even after 202’s record breaking year. Economic volatility has made deals more complex, but private equity appetite will remain strong throughout 2026, particularly for agencies who offer scale and defensible positioning.
Crucially, succession is becoming one of the biggest drivers of M&A and 2026 looks to be no different, with many founder-led agencies who have shallow management benches and limited long-term transition plans. As a result, a growing number of founders are being forced to consider their exit options sooner than expected, from minority investment, to a majority sale or a full exit.
Succession planning is no longer optional, it’s a necessity for all founder-led agency leaders. Buyers in 2026 will be looking forward, not backward and they want agencies with strong leadership teams, who have clean financials and scalable offerings with AI literacy.
For agency founders looking to exit in the next few years, 2026 represents a narrow window to prepare the business so it is acquirable and attractive to investors.
Looking Ahead 2026 Is The Year For The Leaders, Not The Followers
The agency industry is entering a period of profound change, with oversaturation and slower growth, as well as AI disruption and a looming wave of agency succession, 2026 will be the year that reshapes the agency landscape.
Agencies that thrive in 2026 will be early adopters, who embrace AI into their strategies, and move with the constantly evolving commercial models. They will take time to understand procurement, as well as planning for the future of leadership and ownership.


















