🎙️Podcast: AI Isn’t Replacing Agencies. The Economics Behind AI Are.

For the past two years, the communications industry has been caught in a tug-of-war between AI hype and AI fear.
Will AI replace comms roles?
Will it eliminate agencies?
Will it reduce the need for human talent?

The headlines are loud.
The truth is quieter and more complicated.

In this week’s episode of The Intelligent Communicator, I break down what is actually happening beneath the surface. And it starts with one uncomfortable reality:

AI is not replacing agencies one to one.
AI investment is reshaping the economics behind agency relationships.

The signals are already here

Companies are not waiting for AI to mature before adjusting their budgets. They are adjusting now.

Here is the data:
• 83 percent of corporate leaders expect to reduce agency spending as AI tools improve
• 11 percent say they would eliminate agencies for basic content work once AI is “good enough”
• Mondelez plans to cut agency fees and reduce production costs by up to 50 percent
• Unilever’s AI Studio now produces assets 30 percent faster and is targeting double-digit savings
• WPP says brands using AI are already reducing the fees they pay to agencies

These are not anecdotes.
They are indicators of a financial restructuring that has been in motion for months.

Brands are openly acknowledging that AI is reducing their dependency on traditional agency models.
And agency CEOs are acknowledging the same thing.

Why this matters for comms roles

The risk is not that AI will suddenly replace communicators.
It is that AI will replace pieces of the job, especially at the execution layer.

For decades, agencies carried the heavy lift on execution:
media monitoring
drafting
localization
reporting
repurposing content

But when AI takes over even a third of that work, companies start recalibrating headcount and reconsidering what they outsource.

A 20-person comms team becomes a 12-person team.
A 12-person team becomes an 8-person team.

Not because the job disappears.
Because the task load does.

This shift is structural, not personal.

Agencies will feel this first

If AI is now the new cost center, then companies are going to rebalance budgets.
And many have decided that PR and communications are lower-margin functions compared to AI, data, cloud, and infrastructure investments.

One Nvidia chip can cost as much as a car. Companies are buying thousands of them. That money has to come from somewhere.

So brands pull budget from scopes of work.
They take longer to commit to annual plans.
They internalize tasks they used to outsource.

For the first time, we are seeing the economic foundation of the agency-client relationship shift in real time.

What this means for your career

For comms pros, the upside is significant.
The more AI takes over execution, the more valuable the strategic side of the job becomes.

Counsel
Judgment
Messaging
Relationships
Creativity
Crisis thinking
Decision-making

These are not automatable.
They are differentiators.

The challenge is staying ahead of the shift rather than reacting to it.

Listen to the full episode

In the new episode of The Intelligent Communicator, I break down:
• Why execution-heavy scopes are most at risk
• How companies are using AI internally instead of outsourcing work
• Why agencies must reinvent their value narrative
• What comms pros need to do right now to stay relevant
• How this shift mirrors past technological disruptions
• Where the real opportunity lies for the next decade of comms careers

If you work in PR, communications, marketing, or at an agency, this is a conversation you need to be part of.

And if you have thoughts or questions, I’d love to hear them.
This is only the beginning of a much bigger shift.