Keeping Commerce Weird Podcast: The Agency Survival Playbook in the Age of AI

Digital agencies have always positioned themselves as the connective tissue between brands and technology. But what happens when AI accelerates expectations, budgets tighten, and platform ecosystems start competing for dominance all at once?

That’s the focus of this episode of Keeping Commerce Weird. In “The Snark Tank: Agency Survival Session,” Travis Hess sits down with RMW Commerce founder and Watson Weekly host Rick Watson to unpack what the next five years could look like for digital services. 

This episode challenges agencies to rethink where they create value — and how they plan to defend it. Here are the key insights from the discussion.

Keeping Commerce Weird podcast recap: The Snark Tank: Agency Survival Session

AI is compressing expectations, not eliminating agencies.

Travis Hess: Agencies have always been the connective tissue between brands and technology, but as commerce evolves — fuelled by AI, composability, and tighter budgets — the definition of an agency is changing fast. What is the future state of digital agencies? 

Rick Watson: “I think a very popular take is that AI is going to eliminate agencies, which I totally disagree with. Anytime you have asymmetry — differences in time, money, experience, capabilities, expertise — there are always going to be people who want to do it themselves, people who want assistance, and people who want it done for them.

I think about Lowe’s and Home Depot. Some consumers want to press a button and have someone show up and install the dishwasher. Others want to order each part, watch YouTube, and do it themselves over a couple of weeks. To me, that characterises the agency world. That’s why AI is never going to eliminate agencies.

What AI is doing is reducing everyone’s expectations of what they should pay. That’s the real pressure. You have to worry about that trend, even if it’s not universally true. If you’re in the wrong niche, it can be very true.”

Key takeaway

AI is not eliminating agencies. It is raising the bar. As expectations tighten and pricing pressure increases, agencies must move beyond execution and prove strategic value in the outcomes they drive.

Outcome-based only works when clarity exists.

Hess: Do you agree that outcome-based models are the future?

Watson: “I think the difference isn’t so clear. It’s more of a pricing model difference than a capabilities difference. Different models work for different types of clients.

Startups love outcomes because they don’t want to pay unless they get something for it. Especially if you’re cash strapped, that seems like a good path. But if you’re working with a big enterprise and you’ve spent hours trying to move the needle, and the gains are hard won, do you really think those agencies are billing purely based on outcome? I tend not to think so.

The limitation of the outcome model is usually client driven. Clients don’t know what they don’t know, and often they can’t clearly describe the business problem they’re trying to solve. They can’t articulate goals, KPIs, or deliverables beyond a number in their head. That makes pure outcome pricing very hard to execute.”

Key takeaway

There is no universal “right” pricing model. Agencies that thrive will align pricing with client clarity, maturity, and risk — rather than defaulting to ideology or industry trends.

Stop chasing channels. Find your niche.

Hess: What would your advice be to agency owners right now? What’s your prescription for helping some of them survive?

Watson: “I think the trick is to find your niche where you can find high-margin business with the right types of customers. The thing that is true about AI is that it’s reducing everyone’s expectations of what they should pay. You do have to worry about that trend, even if it isn’t necessarily true across the board. It can be true if you’re in the wrong niche.

I also think relationships matter. If you’ve worked with 15, 20, or 30 clients in your prior agency and you did a decent job, they want to work with you again. Relationships travel. That helps people start their next one.

And I think the challenge is that there are too many agencies chasing too little demand. That’s just the honest truth of it. So you have to ask yourself: where can I actually create differentiated value?”

Key takeaway

The agency survival strategy is focus. Specialisation, strong relationships, and a clear point of view create defensible value in a market where execution alone is no longer enough.

In a crowded ecosystem, clarity wins.

Hess: LinkedIn turned into a hot mess. There’s propaganda, AI-generated posts, and people chasing the algorithm. Has it hurt agencies?

Watson: “LinkedIn has gotten way worse. They keep changing the algorithm and what they reward. A few years ago it was the slide deck. Then it was the poll. Now it’s the “newsletter” that isn’t really a newsletter. Give me a break.

People ask what tools I use to manage LinkedIn. I type into the box. That’s my tool.

The fact that LinkedIn is so bad is actually great for me. If you spend two ounces of actual brain power trying to communicate something useful, you’re like an Olympic marathon runner. The bar is so low.”

Key takeaway

When noise increases, clarity becomes a competitive advantage. As AI lowers the barrier to producing content and commoditizes execution, agencies that lead with original thinking and a strong point of view will stand out.

The final word

Digital agencies are not disappearing. They are being forced to evolve.

AI is compressing pricing expectations. Clients are struggling to define outcomes clearly. Channels are multiplying faster than budgets. Noise is everywhere. But none of that eliminates the need for expertise, judgement, and transformation leadership.

The agencies that survive won’t be the ones chasing every platform or defending old pricing models. They’ll be the ones that specialise, build durable relationships, lead with a clear point of view, and move quickly when opportunity presents itself.

If you want the full conversation, watch “The Snark Tank: Agency Survival Session” on YouTube or listen on Spotify.