Why Marketing Agencies and Consultants Are Struggling Right Now — and How They Can Turn Things Around 2025 is a watershed year for marketing consultants and agencies. Let's discuss the pressures, pitfalls and the way ahead.

I run a boutique marketing agency, but despite our agency size, we work with some notable brands and growing, funded startups, but I am not going to sugarcoat it. Business has been slow. Earlier this year, we had a couple of clients who "put marketing on pause" despite the good metrics we were getting them, and a manufacturing client literally backed down from a contract because of the tariffs.

At first, I took things a bit personally, but then when I connected with other fellow agency owners and consultants, I noticed that many of them were going through the same thing at some level, at least on the marketing side.

The truth is that we're at an inflection point. The forces reinventing marketing are not merely external; they're structural. Economic shifts are the main driver, but also AI disruptions, talent trends and evolving client expectations are fundamentally altering the way value is delivered.

Let's analyze a bit more.

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Budgets are shrinking. Expectations aren't.

Economic indicators have been blinking yellow for a while. Persistent inflation, tariffs and international trade uncertainty, and increasing expenses are making marketing leaders hesitant to make firm, long-term commitments. In response, brands are reducing or freezing their expenditures and putting emphasis on demonstrating the worth of each dollar.

Marketing agencies and consultants are feeling this impact across the board. Progress is no longer good enough. Clients need to see how your work is impacting the pipeline, sales and long-term growth. That equates to less experimentation and more emphasis on performance.

AI is changing the game

There is no question about AI's power. It can create content and code, analyze performance and suggest campaign optimization. Several services that agencies once charged a premium for are now performed in-house or by automation software.

Additionally, the hype around AI tends to outpace reality. This creates client doubt, price pressure and difficult questions regarding where human value still adds up. Spoiler: It still does. But you must deliver something AI can't: strategic thought, real-world experience, subtle storytelling and intelligent execution linked to outcomes.

Workplace models continue to evolve, and it's generating tension

A few clients are back in the office. A few teams are remote-first. Others are somewhere in between. And though that all sounds great in theory — but in practice, it's proving problematic.

Agencies are being called on to interact more face to face. Face-to-face meetings, strategy sessions and embeds are back, particularly with enterprise accounts. Meanwhile, it's gotten harder to attract and retain top talent. People desire flexibility, yet clients want face time. It isn't simple to balance these demands, compelling agency leaders to reconsider their hiring models and geographic scope.

Related: A Marketing Agency Model That Actually Benefits the Client

Commoditization is real

A few years ago, simply having the skill and technology to launch a campaign or email program gave you an edge. That's no longer true today.

As martech platforms and AI tools proliferate, more brands have solid internal teams. Agencies can no longer just be functional experts. What clients really need now is insight, market context, tighter positioning, creative thinking and a point of view they can't get in-house.

Specialization isn't optional anymore

We're seeing a strong trend away from generalist agencies and toward highly specialized partners. Whether it's B2B SaaS, financial services, healthcare or multicultural strategy, clients desire teams that really understand their industry. You don't necessarily need to concentrate on a single industry, but you do need to define a niche, a vertical, a channel or a methodology. The "we do it all" days are giving way to "we do this, and we do it better than anybody else."

Data measurement and privacy only get more complicated

Regulatory pressure is building. With GDPR, CCPA and cookie deprecation, the traditional method of tracking performance and targeting audiences is eroding. For agencies, that creates a twofold challenge: staying compliant and delivering insights in an environment where data is harder to obtain and less precise.

This means reimagining analytics strategies, investing in clean data practices and guiding clients through a more privacy-centric environment without sacrificing effectiveness.

SEO and organic marketing are changing rapidly

AI-driven results, such as Google's SGE or AI mode, ChatGPT and Perplexity being used as search engines, are altering the way users search for and consume information. At the same time, the web is awash in AI-created copy — a little of it good, most of it bad.

The moral is clear: Content volume is no longer enough. Brands must produce original content and produce it with skill. Agencies that help clients build genuine authority founded on quality, relevance and consistency will prosper, while those focused on quick victories will be lost in the din.

Talent is elusive and costly

The war for talent continues unabated. Leading strategists, creatives, media planners and analysts are costly, and they are aware of it. Meanwhile, clients are pushing back on fees.

This reality squeezes agency margins and compels difficult discussions on staffing, automation and the degree of service actually viable. Intelligent companies are creating leaner organizations, tighter briefs and more streamlined operations without sacrificing quality.

Sustainability and global stability are now core issues

Clients are under growing pressure to meet obligations around sustainability, social responsibility and ethical business. That means their agency partners need to reflect those values as well. Add to that the geopolitical risks — wars, trade interruptions, regulatory shifts — strategic marketing needs to be as much about risk management as growth driving.

Related: How I Created a Successful Marketing Agency

Outcomes are more important than ever, even when you don't have total control

Clients want tangible outcomes, not just activity. However, agencies and consultants do not always have full control over what gets implemented. Internal delays, under-resourced teams and poor execution can all detract from performance. Nevertheless, external partners are still held to the same high standards of delivery.

This is why early clarity is so essential. Clear definition of scope, realistic expectation management and agreement on timings are all critical. Those agencies that can conduct these discussions with confidence and openness will be the ones who can maintain trust when results are harder to achieve.

If you are running a marketing agency or consulting firm, here is the takeaway: 2025 is not business as usual. It is about agility and doubling down on what you're most valuable at, but also "back-to-school" time — catching up with AI and other trends in order to build a more sustainable business model.