By Noleen Thompson, LadyBugz Marketing
Let me say the uncomfortable thing first, because half the room is thinking it and nobody wants to be the one to open their mouth.
A lot of marketing agencies are being quietly squeezed by AI. Not “disrupted” in the tidy conference-slide way. Squeezed. The kind where the budget conversation gets shorter every year and you cannot quite work out why.
The data backs up the feeling. Gartner’s 2026 benchmarks found that AI is lifting how much companies spend on technology and on their own marketing programs, but agencies barely get a look in: only 5% of tech marketers reported increasing their agency spend, and 80% reported no change at all. The money is moving. It is just not moving toward the agency.
So if you run one, or you buy from one, that should make you sit up.
Here is where I part ways with the doom crowd, though. Because the squeeze is real, but it is not landing on everyone equally. It is landing on a very specific thing.
It is landing on execution.
What is actually being commoditised
For years, a huge chunk of what agencies sold was doing the work. Producing the posts. Building the pages. Writing the fifteenth version of the same email. Turning the handle. That was the billable hour, and for a long time it was a perfectly good business.
AI does most of that now, and it does it fast and it does it cheap. Pretending otherwise is not loyalty to the craft, it is just denial with a nicer font.
But notice what AI does not do.
It does not sit across a table from a founder who has bet the house on a launch and help them decide what actually matters. It does not have taste, the kind that has been wrong enough times to know what right feels like. It does not carry a relationship. It does not get held accountable when the number misses. It does not know your market the way someone who has lived in it for fifteen years knows it, in the gut, before the dashboard confirms it.
Strategy, judgement, taste and trust are not being commoditised. They are getting more valuable, precisely because the stuff around them got cheap. When execution costs almost nothing, the only thing worth paying for is knowing what to execute and why. That is the whole game now.
So the agencies getting squeezed are the ones who were selling the handle-turning. The ones who will be fine are the ones selling the judgement.
Follow the money, it is telling you where to stand
If you want to know which side to be on, watch where the budget is actually going.
It is going to AEO. That is Answer Engine Optimisation, which is a clumsy phrase for a simple idea: making sure your business is the answer when someone asks an AI assistant instead of typing into Google. Gartner found that 58% of tech marketing leaders are increasing their investment in AEO tools, making it the search-related category with the strongest investment growth by a distance, while the old SEO lines sit flat. Even the big, cautious tech marketers are funding this. That tells you it is not a fad, it is a shift in where attention lives.
Meanwhile the old reliable paid channels are wobbling. In the same Gartner data, PPC (pay-per-click ads) and paid social were among the channels most often underperforming against expectations, both flagged by around 27% of marketers. The traffic that paid search used to buy is increasingly being answered inside an AI chat, before anyone clicks an ad.
So the flip is not complicated to see. Money is leaving pure execution and pure paid, and moving toward being visible where AI now answers, toward technology, toward programs that produce an outcome. If you want to be on the winning side of the squeeze, stand where the money is walking to. Not where it is walking from.
That is a deliberate choice at LadyBugz. Not an accident, not a pivot we were forced into. We built the business around the parts that get more valuable when AI gets cheaper.
What that looks like, without handing you the recipe
I will not lay out our playbook here, because that playbook is what our clients pay for, and I would be a poor custodian of it if I typed it into a public post. But I can tell you the shape of it, because the shape is the point.
It looks like making sure a client is the answer an AI gives, not the tenth blue link nobody scrolls to. It looks like content that is genuinely human-led, so it does not read like the grey AI sludge that is quietly flooding every feed and that readers have already learned to skim past. It looks like putting real experts and real leaders forward, because a named human with a point of view earns trust and citations that a faceless company page never will. And it looks like selling outcomes rather than output, because “we posted twelve times” is not a result, it is an activity.
There is a reason the human piece matters more than ever, and it is not sentimental. It is the difference between motion and meaning. To pick one small example, SmartReach’s 2026 outreach study found that 80% of accepted LinkedIn connections never send a single reply. All that volume, all that automation, and four out of five relationships die on the doorstep. Scale without a human behind it is just noise with good posture.
The part I actually believe
The agencies that win from here are not the ones with the most AI and they are not the ones clinging hardest to the old way. They are the ones who pair AI’s scale with human taste and real relationships, and refuse to give up either one.
There is a lovely, slightly awkward tension underneath all of this. Forrester found that 96% of B2B marketing leaders see their own function as a genuine driver of growth, yet 47% suspect their peers still see marketing as mere support, a bit of decoration you switch on when there is budget. I think AI is going to settle that argument, and not gently. When the execution is automated, the only marketing left standing is the strategic kind. The kind that grows the business. The rest quietly disappears, and honestly, some of it should.
I have always been obsessed with being authentic and human. This is how I lead myself, my home, my friends and my business. When I started LadyBugz I always said, still as a one-woman band, that I test on my brand first, before damaging a client’s reputation. This means, what we advise, is something we have been testing and continuously testing. I have still maintained that the sponsored content gets in the way of real results.
We started paying for LLM (AI) portals 2 years ago already to ensure we bring the best of ourselves into our client content. It’s the start and the human optimises and improves it! That’s why we have an amazing team now…
Humans want to speak to humans…
So no, I am not worried about the squeeze. I can feel it, the same as everyone else. I just happen to be standing on the side of it that is getting more valuable, not less, and I made sure of that on purpose.
If you are rethinking what your agency, or your own marketing team, is actually for in a world where the doing is nearly free, I would genuinely enjoy that conversation. Come find me. That part still needs a human.
Noleen
A marketing audit is the honest place to start.
Editorial note: the numbers above are attributed to their named sources in the text. The point of view is mine.
Sources: Gartner (2026 Tech Marketing Benchmarks), SmartReach (State of LinkedIn Outreach 2026), Forrester (B2B Marketing Has a Purpose Problem, 2026).