Why platform competition is forcing agencies to adapt

Platform giants aren’t just the largest advertising channels—they compete directly for agency client budgets. Digital advertising is projected to reach about 69% of global ad spend in 2026 and grow 6.7%, according to Dentsu. Amazon, Google and Meta have automated targeting, creative optimization and performance reporting to the point where advertisers with straightforward direct-response needs can often bypass agencies entirely. 

This shift reflects a broader change in what brands demand from their marketing investments. Chief marketing officers increasingly expect daily uplift metrics, programmatic automation and dashboard-visible results—the kind of performance transparency that self-service platform tools deliver efficiently for single-channel campaigns.

A clear divide is emerging between what platforms can automate and what still requires human strategic oversight. “These automated tools are geared toward smaller advertisers who just need a single-platform ad campaign,” Acosta said. “However, larger advertisers who are running omnichannel campaigns on a global basis need agencies that can handle this level of complexity.”

For agencies, this creates an critical build-or-buy decision: develop proprietary capabilities that prove value beyond what platforms offer, or risk losing enterprise clients to competitors with stronger tech infrastructure. One independent agency built a proprietary marketing technology platform that connects disparate marketing tools and enables performance marketing execution across channels. That capability—not scale or global reach—won them a major U.S. apparel brand’s Agency of Record contract, competing successfully against multinational networks.

The firms gaining traction with large advertisers are doing foundational work most clients never see: organizing data across silos, building identity frameworks that span channels and proving performance in ways that platform dashboards can’t replicate. “Generative AI is already helping us work smarter—speeding up writing, ideation and visualizing concepts—but we haven’t yet seen the exponential gains that many have promised,” said Tracy-Ann Lim, Global Chief Media Officer at JPMorganChase, one of the largest U.S. advertisers and operator of a digital advertising platform. “The real value will come when we have well-organized marketing data, robust identity foundations and enterprise-grade models that can deliver precise, explainable results.”

The distinction matters for agency economics. Platforms excel at execution efficiency. Agencies bring strategic perspective that connects marketing to broader business objectives—but only if they can prove that value through measurable outcomes. “By 2030, agencies will sit closer to clients as strategic advisors, not vendors,” Lim said. “As execution becomes automated, value shifts to insight—knowing when to act, why it matters and what happens next.”

Consumer behavior is changing as search interfaces evolve, which reinforces the need for strategic guidance that platforms don’t provide. “As people shift the way they find and gather information, AI-driven search is reshaping how brands show up and connect with audiences,” Lim said. “It’s not just about keywords anymore; it’s about understanding intent, context and delivering relevant experiences in real time.”

For major brands, the calculation is less either/or and more about determining where platform tools add efficiency and where agency expertise adds value. Brands want teams that challenge them, bring fresh perspectives and act as extensions of their organizations rather than vendors executing a scope of work. “The best outcomes happen when agencies work side by side with a client to solve problems and seize new opportunities,” Lim said.

In the middle market, the opportunity tilts toward independent agencies that can deliver quickly and clearly. “Advertisers seeking agility, transparency, client-focused data strategy and performance-driven metrics are gravitating toward midsize and independent agencies,” Acosta said. These companies typically serve clients in the $10 million to $500 million ad spend range and specialize in connected TV, personalization and e-commerce.

Where advertising companies are placing bets

The capabilities agencies build now will determine where their value comes from in 2030—which makes the current wave of selective M&A less about deal volume and more about strategic positioning.

Acquisitions are concentrating in areas where agencies see the widest gaps between what clients demand and what they can currently deliver: AI and data infrastructure, connected TV advertising experience, retail media management capabilities and identity frameworks. Buyers aren’t looking for companies that claim to use AI—they’re paying premiums for proprietary data assets and workflow integration that demonstrably improves client outcomes.

“Advertising companies that have invested in technology for internal purposes and acquired companies with tech and data capabilities will propel those companies  toward a performance-based versus project-based business model,” Acosta said. That shift from scope-of-work execution to ROI-driven metrics is reshaping how agencies price services, staff engagements and measure success.

The distinction between genuine tech integration and rebranded services matters for valuations. Firms that prove recurring revenue models, proprietary technology and measurable client outcomes are positioned for premium valuations. Companies still operating on project-based billing without demonstrable tech capabilities face valuation discounts.

Scale helps, but coherence wins. Large networks benefit from R&D investment, global reach and specialized capabilities that are difficult to replicate. Independent agencies compete on consistent vision, unique tools and senior-level attention that’s harder to deliver at scale. “At JPMorganChase’s scale, we benefit from both,” Lim said. “Mega-agencies offer flexibility, support for corporate sourcing and R&D capabilities. They can scale teams quickly and test new innovations. Smaller shops bring unified philosophies and proprietary tools, offering fresh perspectives that reinvigorate teams.”

Flexible paths to scale are reshaping the landscape. Private equity continues to build platforms through strategic tuck-ins, with some firms pursuing multiple rounds of growth before eventual exits. Some agencies are also pursuing strategic partnerships or joint ventures to access capabilities and scale without full acquisitions.

The exact path matters less than the intended destination: agencies that can show recurring revenue, proprietary tech and measurable client outcomes. For agency C-suites, the strategic question is how quickly you can build the capabilities that will define competitive advantage in the years ahead.

How J.P. Morgan can help

The market shifts described here create strategic questions—about timing, valuation, capability gaps and business model evolution. The Commercial Banking and Investment Banking teams at J.P. Morgan work with advertising and marketing services companies to answer these questions, whether you’re three months or three years from a transaction.

We provide M&A advisory, financing solutions and industry intelligence. More importantly, we provide perspective from working across the sector—with agencies, advertisers, platforms and investors.