One-fifth of independent agencies will be gone in 2027, predicts Forrester

Forrester, a market research and consulting firm, predicts that 20% of independent agencies will be squeezed out of the market in 2027, reports MediaPost.

"Enterprise demand for productivity gains and AI transformation will split the independent agency market in two," the firm states in its "2027 Marketing Agency Predictions" report.  

"Strategic specialists and technology-enabled agencies will thrive, while midsize generalists will face further margin compression," the report states.  

 Specifically, states MediaPost, generalist, production-focused, and creative-only agencies, "face pressure from adtech platforms and client-side automation. As a result, 20% of the world’s estimated 50,000 independent agencies will face acquisition, downsizing, or closure."  

More broadly, according to MediaPost, the report asserts that rising AI costs, production commoditization, tech debt, and changing marketer needs will "divide agencies into those that execute and those that orchestrate."  

According to the report, "the most successful agencies" will focus on AI strategy, change management, and coordinating the people, data, technologies, and the organizational change needed to drive growth.