AI pushes agency retainers toward a reset

Generative AI is reshaping the economics of agency-client relationships by automating the high-volume work that follows the central creative idea: resizing, localisation, social assets, performance variants and language versions. Piramal Finance expects about half of its content adaptation work to move in-house or closer to internal marketing over the next two years, while former Kotak Mahindra Bank marketing leader Kedar Ravangave estimates 40-50% of such production could shift into AI-enabled brand capabilities over the next 12-24 months.

The pressure falls hardest on retainers built around asset volume. Ravangave said production costs could fall by around 25-30%, turnaround could shrink from days to hours and execution-heavy teams could see manpower needs decline by 10-15%. Rishi Sen of The Sixth Sen said agencies whose value rested on deploying 50 people to produce 500 assets are already exposed, especially as clients ask why AI should not deliver more output for the same fee.

Piramal Finance’s cricket-season campaign shows why brands want more control over the content engine. The company generated roughly 2,000 creatives for hundreds of branches and around six languages using synthetic media, with Arvind Iyer arguing that the real advantage comes from internal customer data, campaign memory, visual rules and approval logic rather than access to the same AI tools available to others.

Agencies are not necessarily being replaced, but their role is narrowing and moving upstream. AnyMind Group’s Maha Mahdy said agencies can remain relevant by setting creative guardrails, connecting strategy with content and measurement, and deciding what should be automated or human-led. For Piramal Finance, savings from production efficiencies have been redirected into more media rather than smaller budgets, reinforcing AI’s role as an experimentation engine instead of only a cost-cutting tool.