Back in 2003, my college roommate and I would watch TV together and constantly mock the ads, picking them apart and noting how “we could do it better.” That’s what set me down the path into advertising. Fast forward to 2025, and I’ve been a copywriter for nearly 20 years, first going to school for it, then interning at different agencies, and finally finding my way in the employment world.
One of the biggest changes I’ve seen over these past two decades is the shift from companies using ad agencies for all their creative needs, to building their own agencies in-house. When I started out, everyone was vying to get into a creative agency: In-house positions existed, but we craved the creativity of the ad agency environment, where you’d have multiple, external clients, instead of working for just one (and having them be your employer, too). This was around the time of Mad Men, so the mystique and glamor of agency life was well-publicized in the national consciousness.
But, times have changed. Though I started off in the ad agency world, I’ve since moved to mostly in-house work, with a major benefit being that employment opportunities have expanded significantly. Instead of everyone fighting for a spot at the same agencies, in-house opened up way more options.
All that being said, agencies are not only still around, but seem to be having a moment. With the current media landscape being as crowded as it is, standing out is harder than ever, and a full-service ad agency may be just what your business needs. So, let’s look at the ins and outs, and the strengths and weaknesses of it all. For this piece, I’ve enlisted the help of two experts: Kyle Sobko, CEO of SonderCare, who has worked with both ad agencies and internal teams over more than two decades in sales and marketing, and Aaron White, CEO and co-founder of the marketing platform Outbound.
What Is an Ad Agency?
Here’s how Sobko sums it all up: “An advertising agency plans and manages advertising campaigns across platforms like search, social, video, display, and broadcast. They handle creative direction, audience targeting, budget allocation, media placement, A/B testing, and ongoing performance optimization. Their role is to execute campaigns that meet defined goals, while coordinating all the moving parts across teams, platforms, and timelines. They work as both strategist and operator.”
Agencies are a group of skilled professionals dedicated to linking products and services with the right audiences, and delivering the right message to grab their attention. They do more than just design eye-catching visuals or come up with snappy headlines and taglines, though — an ad agency steps up as your all-around marketing partner, offering their wide range of expertise to help businesses meet their goals, including things like boosting brand visibility, increasing sales, or even changing public perception after a negative incident.
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“An ad agency is a company that helps businesses create, plan, and manage their advertising efforts across various channels,” adds White. “It’s essentially a creative and strategic partner for getting a brand in front of the right audience.”
Ad agencies are an entire external marketing team ready to reach the right audience you want. They bring the necessary knowledge, experience, and creative power to the table, crafting the brand’s voice, personality, and visual presence, along with narratives that form an emotional connection. Smaller businesses who don’t have the budget to hire an in-house team can see big benefits from having a dedicated agency at their service, as can large companies who would rather outsource all the creative and data-driven metrics.
What Does an Advertising Agency Do?
“An ad agency handles everything from market research and creative concepting to media buying, ad placement, and campaign optimization,” says White. “It’s a full-service hub for brand messaging and promotion.”
To say the least, they do a lot, and the responsibilities of an ad agency can be as diverse as the types of clients they serve. Overall, though, their primary function is to help businesses communicate effectively with their desired target audience, and getting to that goal together is where they really shine, as all the departments work in tandem. Here’s a glimpse into the roles they all play, and why each one is important:
Strategic Planning
As a creative, we can’t just start thinking up ideas as soon as we get an account: We need planners to help us understand the client’s business, target audience, market landscape, and objectives. They dive into the research, analyze the data, and develop the marketing strategies that serve as a map for everything going forward. The account planners create a brief, which lists important points like the brand’s positioning, key messaging, and determining the most effective channels to reach the intended audience. As freeing as it may sound to “come up with anything” (and have an unlimited budget), having guidelines and guardrails to work within is especially helpful for the creative team.
Creative Development
This is where I’ve spent my entire career, often being the only copywriter on a team full of art directors. The creative department, at least from my point of view, is the heart of the agency. We’re responsible for thinking up and producing the attention-grabbing advertising across various media. This includes everything from memorable taglines and engaging sales copy, to designing and developing visual and video content.
Media Planning and Buying
Getting your message in front of the right people at the right moment is the goal of every client that’s pushing a product or service. You can have the perfect ad, with top-notch design and copy that does exactly what the client wants, but if it’s not reaching the right crowd, it falls flat and is quickly forgotten.
The media team is all about identifying the best channels to send that message out into the world. Traditionally that’s been through TV, online, social media, print, or outdoor placements, but in an ever-changing landscape, there’s always innovative opportunities popping up. They negotiate with media outlets to lock in the best rates, making sure the client’s budget goes as far as possible while maximizing reach and impact. Think of them as the distribution experts, making sure the message hits home where it makes the most impact.
Account Management
The account managers are liaisons between us, the creative team, and the clients. We’ll most likely talk with clients at meetings and conference calls, but it’s the account people who are always in contact with them, ensuring smooth communication, managing projects, and building strong, lasting relationships. They go deep into understanding the client’s needs, translating them into actionable tasks for the various agency teams, and keeping the client informed of progress and results. Creatives may get the recognition when a campaign is successful, but we couldn’t do it without the account team.
Digital Marketing
Having a solid online presence is essential nowadays. Many agencies have specialized digital marketing teams that take care of various tasks, including search engine optimization (SEO), pay-per-click (PPC) ads, social media management, content marketing, and email campaigns. They skillfully maneuver through the constantly changing digital world to assist brands in reaching consumers online and achieving digital success.
Production
Once the creative concepts are approved, which usually takes multiple rounds of back-and-forth edits, the production department takes the reins to bring them to life. This involves overseeing the creation of commercials, print ads, digital assets, and other advertising materials, ensuring they are produced to the highest quality standards, and stay within budget. Creatives tend to dream big, but it’s the production team that makes our vision a reachable reality.
Research and Analytics
Another area that helps us creatives significantly are the Research and Analytics team. Their insights spark ideas that often become entire campaigns. Throughout the process, R&A play a vital role, conducting market research to understand consumer behavior, tracking the performance of campaigns, and analyzing data to identify areas for improvement. This data-driven approach ensures that everything we’re doing is going to be effective and aligned with the client’s goals.
Benefits of Working with an Ad Agency
Lots of companies have chosen to move everything in-house over the past few decades, so at this point, why would a business choose to partner with an advertising agency instead?
“Working with an ad agency gives you access to specialized talent, fresh creative ideas, and media buying power you wouldn’t have in-house,” says White. “Plus, it frees you up to focus on running your business while experts handle the strategy.”
Agencies can have more, and farther reaching, benefits that push a company’s marketing success further than if they did it alone, such as the following:
Expertise and Experience
While it may take an in-house team some time to find their footing and assemble a group that works well together, agencies bring a wealth of specialized knowledge and years of experience right off, and in every department. They’re experts that are dedicated to each aspect of the advertising timeline, bringing a level of skill and insight that may be difficult for a company to replicate internally.
Fresh Perspectives and Creativity
In-house teams can often become “too close” to the project, since everything they do is for the same client. The benefit of that is a fast-track to learning about your own product’s offerings, but it can be hard to take a step back and see the big picture when you’re continuously working on the same company’s offerings every day. Agencies, however, have an objective, outside perspective, bringing fresh ideas and creative solutions. They’re not bound by internal biases or ingrained ways of thinking, allowing them to develop innovative and impactful campaigns that can cut through the clutter.
Cost-Effectiveness
It may sound backward, but working with an agency can be more economical than building and maintaining a full in-house marketing team. Agencies have established relationships with media vendors, often snagging better rates, and they can scale their services to meet the client’s specific needs and budget.
Access to Resources and Tools
Agencies invest in the latest marketing technologies, tools, and research resources, providing clients with access to capabilities they might not otherwise have.
Focus on Core Business
By outsourcing advertising and marketing to an agency, businesses can free up internal teams to shift their skills to other strategic priorities.
What are the Types of Advertising Agencies?
There’s not just one style of advertising agency. In fact, there’s quite a few, and they can be pretty varied, with different types catering to a client’s unique requests.
Full-Service Agencies
These are the most all-in-one shops for your advertising needs. They provide a wide array of services, from strategic planning and creative development to media buying and digital marketing. Basically, they can take care of all the big stuff that clients might need on their advertising journey.
Specialized Agencies
When you need a specific niche, like digital marketing, social media, public relations, or even healthcare advertising, call on a specialized agency. Their deep knowledge and focus in a particular area can be a game-changer for clients with special requirements.
Creative Boutiques
Usually smaller in size, these agencies are all about creative development. They come up with fresh and impactful advertising ideas and often collaborate with other agencies for media buying and additional services. But, creative is at the center of it all.
Media Buying Agencies
If your creative is all ready to go, where to put it is the next step, and that’s where a media buying agency can be helpful. They’re experts in planning and purchasing media space (and time) for clients, and usually have strong connections to media vendors, allowing them to get better buying options than if you go it alone.
In-House Agencies
While technically part of a client’s organization, larger companies sometimes set up their own internal advertising teams to manage their marketing needs directly. I’ve worked on plenty of these teams and it has its advantages, like being fully immersed in the product and company, compared with being at an agency where I’d be working on multiple different clients.
Common Ad Agency Services
Ad agencies offer a wide array of services, the main ones being:
- Brand strategy and development.
- Market research and analysis.
- Creative concept development and execution (copywriting, graphic design, video production).
- Media planning and buying (online and offline).
- Digital marketing (SEO, PPC, social media, content marketing, email marketing).
- Website design and development.
- Public relations and communications.
- Campaign management and optimization.
- Performance tracking and reporting.
Key Takeaways
Advertising agencies do so much more than just brainstorm creative ideas: They’re strategic partners, helping businesses navigate the increasingly complex world of marketing, and connect with their target audiences effectively.
The skills and services they offer help brands achieve their goals, whether it’s enhancing visibility, driving sales, or a specialized request that a company can’t do alone. Agencies craft compelling narratives, choose the right media channels, and analyze a campaign’s performance for the best outcome possible. A lot has changed since the days when Mad Men was set (and even since the days when the show aired), but one thing is still true as ever: Ad agencies play a crucial role in the modern marketing landscape.
Frequently Asked Questions (FAQs)
What is the future of ad agencies?
The process of creating and launching a campaign isn’t as simple as it used to be. Going forward, agencies will need to be flexible and embrace new technologies if they want to stay current and make a real difference. Along with that, expect to see more teamwork and specialization within the agency landscape.
“The future of ad agencies lies in AI and data. Agencies that can move fast with changing platforms, and leverage AI in their workflows, will thrive,” says White.
The evolution of agencies is already happening, and is quickly moving toward strategies that are more focused on data, personalized advertising, and a seamless mix of online and offline channels.
“I believe we will see a structure more similar to software-as-a-service (SaaS) — monthly subscriptions, embedded teams, transparent reporting, flexible scopes,” says Sobko. “We are currently still testing the model of being an embedded partner, working like an extension of our growth team by opening Slack channels and sharing access to their dashboards and KPI reports on a weekly basis, etc. They are not pitching us: They are inside the business. It’s not fancy, but I see that’s the direction we are going — far less presentations and reporting, just execution and quicker feedback loops for accountability.”
Sobko adds that, “I’ve had a front-row seat to the agency model’s transition over the years. It’s not about flashy campaigns anymore. The agencies that are going to stay relevant are the ones who demonstrate real-time data, and who can affect a company’s operations — not just advertising creative.”
What are the Big 4 advertising agencies?
When you hear the term “Big 4,” it’s most likely referring to the four largest advertising holding companies globally, which own numerous individual agencies (or if they don’t already own, will probably acquire them soon). These are generally considered to be:
- WPP: A multinational communications, advertising, public relations, technology, and commerce company.
- Omnicom Group: A global advertising, marketing, and corporate communications company.
- Publicis Groupe: A French multinational advertising and public relations company.
- Interpublic Group of Companies (IPG): An American multinational advertising agency holding company.
Do ad agencies make money?
Even though they’re not a company’s only option for launching a campaign anymore, they absolutely still make money. At the end of the day, ad agencies are businesses that generate revenue through various means.
“There are a few different ways ad agencies make money,” says White. “Some charge service fees, retainers, commissions on media buys, or even performance-based models. The most successful ones create long-term partnerships by delivering results, not just ads.”
Some revenue models include:
- Commission-based: Historically, agencies earned a percentage of the media spend they placed for clients. While less common now, it still exists in some forms.
- Fee-based: Agencies charge clients a set fee for their services, often based on the scope of work, time involved, or project deliverables.
- Retainers: Clients pay agencies a recurring fee for ongoing services over a specific period.
- Performance-based: In some cases, agency compensation is tied to the achievement of specific marketing goals or key performance indicators (KPIs).
- Markups: Agencies may add a markup to the cost of certain services, such as production or third-party vendor fees.
But the true profitability of an ad agency depends on factors such as its size, specialization, efficiency, client relationships, and the overall economic climate at the time.
From the initial partnership between a company and agency, to the planning, creative, media buy, and launch, the advertising business is endlessly fascinating and fun. Agencies may not have the glitz and glamor and three-martini lunches of yesteryear, but they’ve evolved to meet the current landscape, and will continue to do so, no matter how much times change.
