(2026-03-10) POV The Creative Agency Model Is Dead, That's Why I Shut Mine Down

Madison Utendahl: POV: The creative agency model is dead – that’s why I shut mine down. Closing my agency has been one of the best things I have ever done. I have zero regrets. I closed because I wanted to.

The 2000s were flooded with agencies

And then there was the backlash. The birth of the boutique creative agency. The ones who would take on the Red Antlers and Mothers of the industry. My agency, Utendahl Creative, was one of them

But starting at the end of 2022, into 2023, the industry started to crack. I found myself up against the big guys, but not in a way that would be complimentary but alarming. Agencies whose minimum fee was 250K were submitting RFPs (requests for proposal) for bids that were appropriate for us… 80K. I knew something was up.

the model itself was frankly broken.

The Model

Here’s how it works. Client has X dollars – for the sake of easy math let's say 100K – to spend on either their brand, a campaign, a photoshoot, you name it. That number is determined by their annual revenue and/or projections for the following year.

The agency then submits their proposal and, based upon the RFP, determines a number that (if they are smart) has a profit margin of at least 50 per cent. However, the majority of creative agencies go as low as 10-20 per cent depending on their internal revenue, overhead, and clout of the client.

Mistake #1: I took lower fees and more clients before letting people go.

This is where it gets brutal. When revenue started tightening, I had a choice: take on more work at lower margins or downsize. I chose the former because I had full-time employees with salaries and benefits to protect.

I told myself it was temporary, that we’d make it up in volume, that the portfolio pieces would lead to better clients. They didn’t.

What happens is you enter a death spiral

This is the terminal flaw in the agency model: the profit margin squeeze is built into the system. You’re always competing against someone willing to go lower, and if you have overhead, which you do, you eventually have to match them or lose the work entirely.

Mistake #2: I made NYC my HQ.

Brooklyn office wasn’t some Midtown high-rise, but it was still thousands a month. The agencies submitting those 80K bids for 250K-level work? They were haemorrhaging.

by 2023, they were trapped. They couldn’t downsize their space without breaking leases. They couldn’t cut staff without losing capacity. So they started undercutting on price to keep the revenue flowing, hoping to outlast the competition.

Mistake #3: I made everyone full-time employees with benefits.

the agency model is fundamentally incompatible with that level of commitment to your people

The AI Reality

I’m not pro AI. I believe in hiring entry-level employees. I believe in mentorship and training people up. But I will ring the alarm and say: if you don’t adjust your business to the times, you will get burned.

Clients are using AI. They’re running their first drafts through ChatGPT before they even send the brief.
They’re asking why your junior copywriter costs $8,000 when they’ve already got a version they generated in ten minutes.

What Comes Next

So if the agency model is dead, what replaces it?
I believe the future is design duos and collectives. Independent contractors collaborating and sticking together, pitching as one but entirely financially independent and not reliant on each other. See (2012-01-09) Boyd Getting To Trust Better Swift Than Deep.