The Future-Fit Agency: Findings From The 35th Moore Kingston Smit

I attended the fantastic Moore Kingston Smith LLP annual agency survey event last night, which painted a very clear picture: the agencies winning today – and those positioned to win tomorrow – are the ones behaving like high-performance teams. They’re agile, strategically disciplined, and continually evolving their proposition. The difference between “fit” and “future-fit” comes down to marginal gains in positioning, pricing, productisation, and people.

1. Strategy and advisory capability is the strongest margin driverPR remains is highest-margin sector of all media disciplines, with an average margin of 13.7%, and the best performers are those who’ve moved upstream into strategic advisory and reputation counsel. These firms benefit from higher retainers, steadier revenue, and better pricing power.
2. The market is highly polarised – agility is destinyThe gap between strong and weak performers has never been wider. Smaller independents (1–100 people) are outperforming networks because they can pivot faster, evolve services, and invest in proposition development – reflected in the 64% of agencies actively reworking their proposition. In a fast-paced marketing landscape, standing still is the most dangerous strategy.
3. AI, productisation and IP will define future successOver 60% of agencies are integrating AI into operations, but the shift ahead is even bigger: away from hours and day rates, and towards productised services, IP-wrapped tools, and tech-powered solutions. Agencies will soon be charging for building AI agents; the winners will be those who anchor this to measurement frameworks that prove impact. “Fixed Price Premium” models will become the norm.

Practical advice for agencies:

• Strengthen your advisory layer – clients will pay for judgement.
• Build proprietary products or frameworks and wrap them in IP.
• Rebalance revenue away from execution; protect strategic thinking from being given away.
• Double down on talent – the differentiator is increasingly people powered by tech, not the other way around.
• Build bespoke measurement systems that clearly demonstrate value and justify premium pricing.
• Maintain a minimum of 3 months’ overhead in the bank; target staff costs at 50%–60%.
• Record margins of 13.9% are forecast for 2026 – but only for those building future-fit models now.

Trading conditions over the last two years have been tough, with increased pressure on pricing and margin.

Many agencies are “working harder for the same revenue”, with productivity dipping once revenue per head is adjusted for inflation.

Market polarisation is acute – quick agency adaptation is essential.Performance & Sector TrendsPR is the highest-margin media sector at 13.7%; no PR consultancies reported a loss.Influencer agencies delivered ~20% growth, one of the strongest categories.

PR agencies saw a 2.3% sector decline – only the second time in 35 years (the previous dips being the recession and Covid).

Smaller, independent agencies are achieving strong margins due to agility and speed of pivot.Strategic advisory firms (e.g., Cavendish, Headland, Powerscourt) lead on value and retainer stability.

Social/influencer (GOAT, Billion Dollar Boy, Whalar) and experiential/events (N20, Jack Morton) also performed well.Retail design surprisingly “holding up well”, despite macro headwinds.

Media buying and advertising still dominated by networks (Spark, MiQ, Innocean, Leo Burnett, Uncommon, New Commercial Arts).Digital agencies are struggling after heavy PE investment post-Covid and having made big investments and bets. 

Financial Benchmarks

• 2026 margins predicted to hit a record 13.9%
• Target staff costs: 55–60%
• Current avg. staff costs: 61.8%
• With freelancers included current total: ~65%
• Rent sits at 3.4%; other costs at 21.4%
• Agencies should maintain 3 months of overhead in cash reserves
• Growth targets of top-performing: 13.5% revenue growth and 18%+ operating margin.

Proposition, Positioning & AI

64% of agencies are currently improving proposition/marketing – essential in a crowded, fast-moving market.

Agencies must rethink positioning, pricing and value creation in a world where AI boosts both client expectations and competition.

Over 60% of agencies have adopted AI operationally.

Esther Carder Stephan Pretorius Lisa De Bonis Ben Bilboul Ben Jeffries 

AI, Integration & Operating Models

Integrated service models are accelerating because AI enables faster insight, analysis and operationalisation.

Clients expect more for less, so agencies must embrace AI to stay competitive.

AI has democratised capability – everyone has access, so differentiation comes from how you use it.

Expect procurement-style audit trails for AI soon; “the fun phase” will harden into governance.

Value, Pricing & Productisation

Start conversations with value, not cost.

Move from hours-based pricing to fixed deliverables (“Fixed Price Premium”) and eventually outcomes.

90% of influencer pricing is already outcomes-based.Within 12 months, agencies are expected to begin charging for AI agent-building.

Build products, wrap them in IP, and use tech to scale – don’t rely on execution hours as they will head towards zero.Identify commoditised services and cut them; codify those where you have a genuine right to win.

Creativity, Memorability & Human Differentiation

With AI flooding the world with content, “being seen” is easier – being memorable is harder.Agencies must focus on deeper metrics: memory, impact, sales.

Human craft becomes the premium – “bring value through craft”.

People, Culture & Talent

Agencies need psychologists, not technologists – leaders who energise and motivate teams through change.

Adopt an AI-positive culture: test, learn, build workflows.

Don’t under-invest in talent; avoid “AI slop”.Future skills look more like “M-shaped” or multi-hyphen talent than traditional agency specialisms.

Strategic consultants / senior whisperers will rise in value.

Strategic Advisory & Measurement

Be consultative: rewrite briefs, refocus on impact, and price accordingly.

Agencies must build detailed, bespoke measurement frameworks to justify premium pricing and prove commercial impact.

Think less about attention economy, more about outcomes and memory structures.

Overall Mindset

“Marketing hasn’t changed, but how marketing gets done has changed.

”Human connection still matters – use AI for efficiency, but keep creativity and judgement human-led.

Independence is an advantage: faster to innovate, create IP, and adopt new pricing models.