Why AI Is Creating a Window for Independent Ad Agencies

The financial community is pricing the risk of AI disruption in advertising. It hasn't yet caught up to the opportunity.

By Tim Ringel, Founder & CEO, Meet The People

It’s commonly held that AI represents an existential threat to ad agencies. I don’t blame the financial community for thinking this way. It’s an assessment that’s pervasive among many pessimists in the ad space itself. But it’s mistaken.

I’m not going to argue that the bleak forecast for the future of advertising is completely without merit. Market caps have compressed. Multiples have compressed. Talent has been fleeing for years. And now some clients are questioning whether they need agencies at all.

But that narrative captures only part of the picture: yes, AI is genuinely disruptive to the legacy holding company model. But investors focused solely on that dark narrative are overlooking what may be one of the more compelling growth possibilities in marketing services in 20 years. The same disruption that is shaking up traditional ad agencies  is opening space for a different kind of agency company to emerge.

Every period of significant industry change creates both risk and opportunity.

At Meet The People, we’ve spent the past four years building for this moment. We aren’t projecting an AI strategy for some future quarter. We’re operating one now, with proof points across our client base and a business model that turns AI economics in our favor.

The Pricing Structure AI Actually Fixes

The traditional advertising business runs on times-and-materials pricing. Agencies hire people, then bill clients against hours worked. When you introduce AI that can produce creative work in a fraction of the time, that pricing model breaks. You can no longer charge for the hours AI just eliminated.

Legacy holding companies see this as their central threat. I see it as the industry’s chance to move to a better economic structure: pricing on outcomes and deliverables. When billing is attached to achievement,AI-driven productivity gains flow through to margin. Automate 80 percent of a workflow, deliver the outcome the client wanted, capture the difference. Creative once again becomes one of the more profitable services an agency offers.

Similarly, financial audiences ask the wrong question when they focus on headcount reduction. The new metric is revenue per employee and profit per employee. That’s the KPI that tells you whether an agency is using AI to accelerate output or just to defend against margin compression. It also separates companies built for the industry’s next decade from those defending the last one.

Why the Mid-Market Is the Real Opportunity

Our thesis when we partnered with Innovatus Capital Partners in 2021 was straightforward. Every strategic buyer was competing for the same at-scale assets with blue-chip client rosters. We took a different path, acquiring regional agencies with strong economics and elevating them onto a national platform.

The math adds up. Regional sub-scale agencies trade at a fraction of what the global, established agencies trade at. Buy those assets at half of the multiple, integrate them into a platform that operates at national scale, and you’ve created value on the entry price alone. Factor in organic growth, which is far easier to generate in the mid-market than in the enterprise segment, and the returns compound.

That approach has funded 10 acquisitions at our company, which now has more than 800 employees. It also happens to be where the AI opportunity is most acute. Enterprise clients sit on fragmented data across siloed departments, with layers of leadership protecting turf. Mid-market clients want their data unified, want the strategic insight AI can deliver, and can move fast enough to implement what we recommend.

The Token Economy Nobody Is Pricing In Yet

AI usage is metered in tokens. And this means that tokens will become a currency clients need to procure at scale. You can already see individual users optimizing their token consumption in a given week, choosing lighter models when their allowances are running low.

Now extrapolate that to the enterprise. A large brand running AI-generated creative production in-house will burn through tokens at a rate that gets expensive quickly, and they’ll be dependent on models that change constantly. The rational response for those clients will be to outsource token procurement to a partner that buys at scale, load-balances across providers, and delivers outcomes without the client managing the underlying infrastructure.

That’s the media upfront model applied to AI. The large tech companies are already pre-buying processing power through partnerships — Meta with Amazon, Amazon with Anthropic. Within two years, mid-market and enterprise clients will want an agency partner doing the same thing on their behalf.

What Investors Should Be Weighing

Two questions come up in practically every investor conversation. First, can this business model make money in an AI-transformed industry? Second, why trust an independent to execute on a thesis this large?

The answers are already visible in the numbers. Meet The People is profitable, growing, and integrating acquisitions on a proven playbook.

The advertising economy that emerges over the next five years will be very different from the one that existed for the past thirty. Revenue currently sitting inside the major ad holding companies and consulting firms adjacent to advertising is going to be redistributed. Capturing even a small share of that redistribution builds a business worth substantially more than what it costs to buy into today.

That’s the case. For investors, the moment to act on it is now, while the market is still pricing the risk and hasn’t caught up to the opportunity.

###