AI Is Killing Agencies. This Is How To Save Your Agency

The $100 MBA Show

The episode addresses the existential threat AI poses to traditional marketing, design, and ad agencies. Host Omar Zinhome argues that while

Key takeaways

• Agencies selling 'tasks' like thumbnail creation or copywriting are being replaced by tools like ChatGPT and Claude.
• The 'Vertical Value Ladder' concept allows agencies to move from simple asset creation to managing high-value results like leads.

Main topics

• AI disruption in creative agencies
• Selling outcomes vs. selling tasks

Notable quotes

AI is not killing all agencies. They're just killing the agencies that are selling the wrong thing.

Conclusion

To thrive in an AI-driven economy, agencies must stop being a line-ite

Transcript preview

Speaker 1 (0:00) AI is killing agencies right now. Ad agencies, marketing agencies, design agencies. Clients are canceling every single week. I got friends with agencies that have clients walking out the door saying, we'll just use ChatJBT. The truth is, AI is not killing all agencies. They're just killing the agencies that are selling the wrong thing. You gotta stop selling services and start selling outcomes. It makes selling a no-brainer. I'm going to explain exactly what this all means and give you real life examples. Let's go inside to figure this all out. Welcome back to the $100 MBA show. I'm your host, Omar Zinhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday to help you start, grow, and scale your business. Speaker 1 (0:50) Hey, if this show has helped you in any way, it would be amazing if you dropped us a quick review on whatever app you're using right now to listen to this podcast. It helps me and my team bring you new episodes every week. And more importantly, more entrepreneurs will be able to discover the podcast so you can help someone else start their journey. AI isn't coming for agencies, it's already killed the ones that aren't viable. The uncomfortable truth that a lot of people don't want to face right now is that people are paying thousands and thousands of dollars a month to agencies for things that a lot of AI tools can do in seconds. I'm talking about creating thumbnails, creating Facebook ads, writing content for their blog, writing content for their ads, you name it, AI can do it. And this is the conversation that's happening in your customer's head. They're saying, why should I pay an agency to do something that AI can do for $20 a month with a subscription to Clodder ChatGBT? And they're right. Why should they? They have to ask that question because every dollar counts in a business. And if they are looking for solutions, they're going to find the most economic solution, but also the most profitable one, the one that actually is going to get them results. And the data backs this up. 53 % of agency owners are now seeing AI as a serious threat. And that's up from 44 % from just last year, okay? The average agency-client relationship has dropped dramatically in a very short amount of time. So you got to wake up here if you're an agency, because AI is killing anybody who's selling tasks. You got to stop selling tasks. You got to stop selling creating ads or creating graphics or creating a website even, okay? Stop. selling tasks. What you need to do that AI can do is sell outcomes. An AI can't own an outcome. So in other words, stop selling what you do. Okay, start selling what the client gets. Okay, that's all they care about. What am I getting out of this relationship? What results am I going to get by hiring this agency? And if you can get them results, they will happily pay you because An AI, chatbot, chatGBT, cloud, you name it, is not going to guarantee any kind of results. It's not going to own or have any kind of responsibility over those results. In other words, you've got to start understanding that services, tasks are becoming commodities because AI can do them now, all right? An outcome, on the other hand, is a result. An AI cannot promise an outcome, cannot own an outcome. I want to be super clear. I want to make sure this is crystal clear to everybody who's listening and watching because if you have an agency, this is urgent. If you want to build an agency or build in some services in your business, you need to do this right. So to make this clear, we're going to head over to the whiteboard and I'm going to show you what I call the vertical value ladder. So what's the vertical value ladder? Let's say for example, you have an agency that creates images and ad copy for Facebook meta ads, you know, Facebook, Instagram ads. So this is the first rung, like, okay, I'm going to create the creative ad. Speaker 1 (4:00) creative and you know this is gonna be like the image and some of the ad copy you gotta ask yourself the question why does the client want this well they want to run ads with this creative on Facebook okay right now the free version of chat GBD can do this for them they don't pay any dollars and they can just do it and it's not gonna be super perfect but it's gonna be good enough for them to run some ads so they need this so that they can run ads on Facebook or on Instagram FB and insta ads. Okay. So that's the next level of value. It's like, I will create the ads and then I will run the ads on Instagram. Well, actually, unfortunately, Claude cowork can do that as well. It can just take over your screen and run the ads in your meta account if you want it to. Okay. So what's the next level of that? Why do they want to run the ads? And remember, why are they doing this? What result, what outcome does, do they want out of this whole transaction? Well, they want somebody to run the ads and then analyze the data and then make, some suggestions and make some changes based on what they learn from the data okay this ad is converting well this one's not let's let go of that one maybe make some tweaks to this copy or make some tweaks to the actual image on the ad why