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The marketing agency industry will evolve next year in pursuit of better brand experiences and performance, according to Forrester’s predictions for 2025.
“Brands’ evolving needs call for offerings that double down on differentiation,” the global consultancy said.
“The division of creative services will be an opportunity for new companies and collaborations to deliver both creativity and scale. AI efficiencies will call in-house marketing capabilities into question.”
The predictions:
Creative agencies will reunite creative craft with scaled execution.
“The pressure for profitability has forced the split of creative ideation from creative production — dismantling end-to-end creative development services.
"Independent creative specialists like GUT, Mischief, nice&frank, and Zulu Alpha Kilo provide ideation services, while holding companies maintain production behemoths like WPP’s Hogarth, dentsu’s Tag, and Publicis Groupe’s Prodigious.
“In 2025, new creative partnerships will emerge that reunite the big idea with the scaled activation.
“dentsu will combine Tag with dentsu Creative; Omnicom will combine Omnicom Production with its newly created Omnicom Advertising Group; Plus Company, a group of 26 creative independents, will pursue production scale.
“CMOs conducting creative agency reviews in 2025 should look for providers with built-in ideation/execution partnerships or assemble and manage a roster of independent specialists, as did General Motors and General Mills.”
In-house agency growth will decelerate because of AI content production agencies.
“Insourcing marketing capabilities to gain cost efficiency and reduce agency fees will decline in 2025,” said Forrester.
“We’ll see instead a surge in outsourced AI content production agencies that build bespoke platforms for their clients or leverage ad manager platforms configurable to any brand.”
CMOs will ramp up generative AI (genAI) capabilities using external agencies: 61% of agencies currently use genAI in marketing execution, but just 17% of US B2C executives say their in-house agency uses genAI in their marketing efforts.
“As outsourced agencies build AI content production capabilities and bespoke brand AI models, CMOs will notice their ability to deliver low-cost marketing at scale.”
A third of digital media specialist agencies will become full-funnel agencies.
“For decades, media agencies have been divided between generalists and specialists, but both have drawbacks. Offering everything from identity resolution to TV advertising to big creative ideas risks quality over quantity. But specialising in search at the expense of out-of-home or creative at the expense of media results in inferior customer experiences. Brands demand integration.”
According to Forrester’s Q4 2023 B2C Marketing CMO Pulse Survey, 46% plan to integrate performance and brand media assignments with a single media agency, and 35% plan to integrate creative and media assignments in the next 12 months.
“In 2025, CMOs and agency executives will reconcile full-funnel, full-service capabilities with deep expertise in various disciplines and channels.
“To do this, CMOs will need to combine their team and their provider’s most valuable resources (people and culture) with sophisticated audience technology, creating a human + technology team to deliver media skills with both precision and persuasion."
Holding companies will dominate commerce with data, creative and media scale.
Holding company commerce platforms such Omnicom’s Omni and Flywheel, WPP’s Open, or Publicis’ PMX and CitrusAd deliver consistent experiences through and beyond the path to purchase to continuous brand engagement.
“These operating partners with end-to-end commerce capabilities deploy commerce experiences that go beyond ‘why buy’ messages to remind shoppers 'why own'.
“In 2025, smaller players like DEPT or Valtech with limited services portfolios will struggle to keep pace. Midsize providers like IPG or Merkle will be forced to ramp up their acquisition engines to quickly plug the gaps to remain competitive.
“CMOs can use scaled providers — like Accenture, Omnicom, Publicis, and WPP — to expand the moment of purchase from a single channel to a total commerce experience across customer touchpoints and the stages of choosing, buying, and owning a brand’s product.”
CRM agencies will close the gap between data and execution to become CX agencies.
“Marketing service providers historically focused on offering proprietary data and/or services to support data management and hygiene. But with 66% of global B2C marketers saying they’re concerned about their third-party data’s compliance, these agencies will reposition in 2025.
“Data sourcing and management will no longer be the end products. Instead, agencies will position them as foundational elements to support activation for services like media planning and buying, customer analytics, marketing technology implementation and management, customer experience (CX) implementation, and loyalty and CRM execution.
“More CRM agencies will then present as consultancies (standalone or part of a holding company offering) and try to shake off the baggage of data brokers and marketing service providers. CMOs considering data-driven loyalty or CRM activations must recognise that these services are deeply enriched when delivered in the context of commerce, creative, customer insights, and media services.”
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