Will AI kill the advertising holding company model? Not overnight, but the dismantling has already begun, and it opens up space for independent agencies. The pyramid of juniors doing manual work is giving way to lean, senior teams that orchestrate AI. Those with less structure and no legacy technology to pay for adapt faster.
The latest signal came from WPP. According to a Financial Times report picked up by The Drum, the group is set to cut around 1,000 more roles in the coming months. Since the start of 2025, nearly 11,000 positions have already gone. Headcount ended June at 97,388, down 6.4% year on year.
What's happening to the holding companies?
WPP isn't alone. The same report notes that Omnicom announced around 4,000 job cuts after completing its acquisition of IPG, and that Dentsu is pressing ahead with eliminating roughly 3,400 roles outside Japan, about 8% of its international workforce. WPP, for its part, is chasing £500m in annual savings by 2028.
The backdrop is financial. According to Jay Wilson, the Gartner analyst quoted by The Drum, marketing budgets have stalled at 7.8% of company revenue. Within them, the share going to agency fees has been falling since 2023 and now stands at 19.2%; Gartner forecasts 15% by 2030. Working media, meanwhile, takes 31.4% of budgets, the highest share Gartner has ever recorded.
In other words: clients aren't spending less on marketing. They're spending less on agencies.
Why does AI threaten the holding company model in particular?
Because the model was built on scale of people. Lots of juniors, lots of hours, lots of manual production: monthly reports, competitor audits, resizing assets, gathering data. That was how margin was made and how talent was trained.
AI eats precisely that base. Wilson describes the pyramid inverting: fewer people on execution, more senior teams running AI systems, with the cuts concentrated at entry level. In his words, "the often-bloated hold co model isn't holding up to AI impacts".
And here's the part that matters if you're not a holding company. According to Wilson, independents, with less overhead and fewer sunk technology costs, are better placed to benefit. "AI is helping scale the capabilities of those independent agencies," he told The Drum.
Does technology alone decide the future of agencies?
Technological determinism is the idea that technology drives social and organisational change, not the other way round. The printing press, television and the internet redrew advertising whether the industry liked it or not. AI joins the same list.
The useful version of this theory for an agency isn't the fatalistic one. It's recognising that the model will change regardless, and that the only real choice is who designs the change: you, or your client's procurement team.
Amid the chaos of cuts, mergers and AI announcements, clarity emerges when you connect data to humanity. Technology does the groundwork. People decide what it means for a brand, a category, an audience. That division of labour is the new org chart.
Holding company or independent: who adapts better?
| Dimension | Traditional holding company model | Independent with AI |
|---|---|---|
| Team structure | A broad pyramid of juniors on execution | A lean, senior team, with AI on execution |
| Data and AI stack | Built in-house, expensive to maintain | Bought in as a platform, with no development cost |
| Cost of change | High: legacy systems, contracts and global structures | Low: few layers to get through |
| Speed of decision | Committees and regional sign-offs | The partners are in the room |
| Remuneration model | Squeezed by the shrinking fee share | Can move to value- and outcome-based pricing with less friction |
The table simplifies, of course. There are nimble holding companies and hidebound independents. But the structural trend favours those who are small and decide quickly.
What can independent agencies learn right now?
- Take an inventory of tasks. List what the team does every week: timesheets, monthly reports, status meetings, competitor audits, budget tracking. Mark what's repetitive.
- Automate the task, not the judgement. AI on collection, consolidation and first-pass analysis. People on interpretation, ideas and client conversations.
- Buy capability, don't build it. The holding companies spent millions on proprietary stacks. An independent can get equivalent analytical capability by subscribing to a platform, with no development cost and no maintenance burden.
- Reinvest the hours you free up. In strategy, in new business, in category depth. Not in more of the same production.
- Rethink how you charge. If fees are shrinking as a share of budgets, selling hours means selling exactly what AI makes cheaper. Price delivery and outcomes instead.
- Don't abandon your juniors. The inverted pyramid leaves an awkward question: where will the seniors of 2030 learn their trade? Use AI to speed up newcomers' learning, not to close the door on them.
This is the kind of agency the Defy platform was designed for: the same analytical and AI capability as the big networks, without the cost of building it or the burden of maintaining it.
And in Brazil, when does this arrive?
The Drum's report contains no figures for Brazil, and it would be reckless to make them up. But the logic doesn't need a passport. The holding companies operate there, global clients buy there, and the pressure on the fee share arrives through the same procurement departments.
For an independent agency in Brazil, the message is practical. The big competitor will become leaner and more automated, and size stops being an automatic advantage. What's left as a differentiator is speed, closeness to the client and quality of thinking. Exactly what a well-equipped independent knows how to deliver.
That's why AI for independent agencies isn't about having the most sophisticated model or an innovation lab to show off on the website. It's about taking off the team's desks the tasks the holding companies handled with sheer headcount, and putting those hours where independents have always been better: the idea, the client and the category.
