McKinsey warns AI could shift ad spend away from agencies

Three-quarters of advertisers expect AI to increase total media spend, McKinsey found in its June 16 survey, and one-third expect at least a 10 percent lift in return on ad spend. AI is changing how buyers discover products, how impact gets measured, and which intermediaries still get paid. For SEO agencies, the pressure is showing up in the way search, content, and media are being reorganized around recommendation systems that decide what gets surfaced, selected, and purchased.

How the value chain is moving

Spend may keep drifting away from the open web as direct media deals gain share and bypass agencies and programmatic intermediaries. The old agency model depended on control points, where a team could broker placement, manage bidding, and package reporting around clicks and impressions. AI weakens that logic by inserting a new decision layer between the consumer and the channel.

The practical consequence is a different buying landscape. More than half of advertisers in McKinsey’s research already believe AI has reshaped discovery and consideration, which means brand visibility now depends on whether a system recommends a product, not just whether a page ranks. Agencies that still sell media execution as the center of the relationship will see that fee pool under pressure, while firms that help clients shape discovery, data, and selection can defend margin.

Why SEO agencies feel it first

In January 2026, ten agencies said they were retooling SEO, metrics, and client strategy as AI answers cut clicks and shorten journeys and as discovery, decisioning, and transactions increasingly moved through AI systems.

BrightEdge’s 2025 data shows why this is not a pure traffic-collapse story. AI search visits were growing at double-digit rates month over month, but they still accounted for less than 1 percent of referral traffic, while organic search remained the primary driver of conversions. Organic search is still the conversion engine, but the surface area around it is changing fast enough that agencies need to sell more than rankings.

What the new profit centers look like

The firms most likely to keep margin are the ones that move from execution to control over the system around execution. In practice, that means four service lines become more valuable than classic media brokering.

• Strategy: Brands need a plan for how AI-mediated discovery affects demand capture, brand authority, and channel mix. Strategy is no longer a deck on top of SEO, it is the logic connecting discovery signals to revenue.

• Data ownership: Agencies that can unify search, content, CRM, and media data can explain where AI is changing conversion paths. That is more defensible than reporting only on sessions or keyword sets.

• Workflow automation: As AI answers and faster buying journeys compress timelines, agencies need internal systems that turn research, content production, optimization, and reporting into repeatable workflows. The value is in reducing manual churn while keeping human review where it matters.

• Cross-channel visibility optimization: Search no longer lives alone. Agencies need to show how paid media, organic content, brand authority, and AI surface area work together across discovery points that are increasingly fragmented.

The measurement reset is already underway

The Interactive Advertising Bureau’s 2025 Outlook Study projected U.S. ad spend growth of 7.3%, and nearly 8 in 10 buyers were already using or exploring generative AI in media planning and activation. Half of those users required mandatory human oversight and clear brand-safety protocols. Buyers want AI in the workflow, but they still want control, accountability, and review.

Seer Interactive data found informational-query organic click-through rates on Google AI Overviews fell 61 percent since mid-2024, while paid click-through rates on those queries fell 68 percent. Agencies that rely on click volume as the main proof of value will have a harder time defending fees when AI compresses the journey before the click even happens.

For agency operators, the response is to change what gets measured and sold. Traffic alone no longer tells the whole story. The more durable metrics are qualified visibility, assisted conversions, branded demand, and the share of high-intent journeys that still reach owned properties or close through measurable channels.

What agencies need to build next

AI is not shrinking demand for media; it is shifting where value is captured. Buyers are willing to spend more if AI improves efficiency, but they will favor partners that can prove where that lift comes from.

The agencies that benefit will not look like legacy intermediaries. They will look like operating partners with three traits:

• They understand how AI affects discovery and can translate that into search and content strategy.

• They own enough data and workflow to show why one channel, one query class, or one content format converts better than another.

• They can connect cross-channel visibility to business outcomes, not just present a cleaner dashboard.