AI Won't Kill Agencies. But Something Else Might.

Event agencies have heard the warnings for years. Technology and automation is coming and it will replace you. The developments in AI have only intensified this warning and the fear that clients will take more and more work in-house.

But I've learned a thing or two after 25 years in this industry, working in event agencies and watching agencies from the other side of the table as a tech vendor. AI won't kill agencies, because the commission model will.

The agencies who survive won't be the ones who fought hard to protect it, because they'll be the ones who saw it coming and transformed before they had to.

The Real Pressure Isn't AI. It's Value Misalignment.

Let me be direct… agencies aren't failing because of technology. If they fail, it’s because clients are paying them for the wrong things.

For decades, the agency model has worked in a similar way; you source venues, negotiate rates, manage logistics, and execute events. Hotels pay commission on what the client spends and services, such as event management are paid for by the client. Simple.

But this model has always been fragile, because it assumes:

• Clients cannot source venues themselves

• Logistics coordination requires specialised expertise

• The vendor relationships you manage justifies the fee

All three of those assumptions are breaking down, and it’s not because of AI, it’s because of transparency and scale.

What AI Actually Changes

Let's be clear about what AI can and can't do.

AI can:

• Scan thousands of venues and match them to criteria in seconds

• Generate proposals and cost comparisons automatically

• Manage vendor communication and basic coordination

• Predict costs and identify savings opportunities

• Build and maintain supplier databases

AI can't:

• Understand the strategic intent behind an event

• Navigate complex stakeholder politics

• Identify opportunities nobody else has seen

• Build relationships that survive difficult moments

• Think creatively about how to solve emerging problems

• Make judgment calls when things go wrong

The agencies that are panicking right now are the ones whose core value was doing the first list, whereas those who will thrive are the ones who've already shifted to the second.

The Real Threat: Commoditisation of Commission Work

So, what's the danger?

Stage 1 (now): Clients are getting smarter about where value is and isn't coming from. They're saying: "I can use AI to source venues. What I need you for is creativity, market insights, and strategy."

Stage 2 (next 18 months): Some clients will build or buy their own tools to handle the transactional work. They'll keep agencies for higher-level thinking.

Stage 3 (2-3 years): Commission-based models become unsustainable because clients can prove they're not getting commission-level value for transactional work and will put increasing pressure on the commission model through rebates, eroding agency margins (already thin).

The agencies in Stage 3 will face a choice to transform the model or disappear.

What the Commission Model Actually Incentivises

There’s an uncomfortable truth in the industry and that is that the commission-model can incentivise the wrong behaviour.

When you're paid on commission, you're incentivised to:

• Maximise spend (not optimise value)

• Push volume (not quality)

• Spray and pray to find availability before a competitor (lowering venue conversion)

• Do just enough to get the deal done (not create strategic outcomes)

• Avoid difficult conversations about whether the event should happen at all

However, clients actually need something more:

• Strategic clarity on event objectives

• Ruthless prioritisation of spend

• Partnership that includes saying "don't do this event"

• Outcomes measurement that proves value

These two things are fundamentally misaligned and it’s a big reason why strategic meetings management emerged as a discipline in the early noughties, but has wrongly focussed on larger flagship events instead of small meetings and training, which typically make up 70-80% of a companies’ total meetings spend (according to ‘Smart Meetings’).

The Agencies That Are Already Winning

The smartest agencies I've come across have quietly transformed their businesses and shifted away from pure commission models. They're doing it differently, and here are some example models:

Model 1: Tiered Pricing

• Strategy and planning work: Fixed fee

• Execution and vendor management: Reduced commission or managed fee

• Measurement and reporting: Separate line items

This separates what you charge for strategy from what you charge for execution.

Model 2: Retainer + Performance

• Clients pay a retainer for strategic advisory

• Commission or success fees apply only to work that meets agreed-upon outcomes

• Measurement is built in from day one

Model 3: Outcome-Based Pricing

• You charge based on the value you deliver

• If the event drives 50% more leads, you capture a percentage of that uplift

• Aligns your incentives with theirs

None of these models are pure commission, but all of them require you to have a different conversation with your clients.

Why Most Agencies Won't Make This Shift (And Why That's Dangerous)

The reason most agencies are stuck isn't because transformation is impossible. It's because shifting away from commission feels like giving up revenue, and may report “it’s not what the client wants”.

The thinking is often that "Commission is predictable. We know what we'll make, so why would we risk that on fixed fees or outcome-based models?"

But that thinking misses the bigger picture:

1. Commission revenue is already eroding — Clients and hotels are negotiating harder, timelines are stretching (longer to get paid), and expectations are rising

2. Margin is disappearing — You're doing more work for less money under the current model

3. You have no differentiation — If your value is just sourcing, why wouldn't clients use AI?

4. Survival requires transformation — You can't commission-model your way out of this

The agencies winning who win won’t be the ones who negotiated better commission rates. They're the ones who said: "We're not just a logistics provider, we provide creative solutions and we're strategic partners, and here's what that costs."

What Needs to Change

For individual agencies:

1. Audit your work — What percentage of your time goes to transactional work vs. strategic thinking? Be honest.

2. Identify your real value — What do clients actually struggle with that you solve? What do they get wrong? What opportunities do they miss?

3. Start the conversation — Tell clients: "I want to help you think differently about events. That requires a different engagement model."

4. Pilot a new model — Pick one client. Propose a fixed fee for strategy + reduced commission for execution. Measure the difference.

5. Learn and iterate — What worked? What didn't? How do you price it next time?

For the industry:

The conversation needs to shift from "How do we protect commission?" to "What should we charge for in a world where sourcing is automated?"

That's an uncomfortable conversation that the industry has been putting off for years, but it's necessary.

The Timeline Matters

You don't have to transform tomorrow, but the fourth industrial revolution (4IR) means you do need to start sooner rather than later.

The agencies that are already talking to clients about outcome-based pricing, strategic retainers, and value-based fees are building relationships that will sustain them. The ones that are still purely commission-dependent are running out of time.

In three years, the question won't be "How do we compete with AI?"… It will be "How do we survive clients who have already moved on?"

The Agencies That Will Thrive

The winners won't be the biggest agencies or the ones with the most technology. They'll be the ones who:

• Stopped thinking like vendors and started thinking like partners

• Shifted from "we execute events" to "we think strategically about events"

• Moved from transactional relationships to transformational ones

• Built pricing models that reward outcomes

• Were willing to have uncomfortable conversations about the commission model

These agencies will charge more, make more margin, work with clients who actually value them, and sleep better at night knowing their business model isn't dependent on a system that's already breaking down.

What Now?

If you're in agency leadership reading this, the question isn't "Will AI kill us?"

The question is: "Are we going to transform our model before we're forced to?"

The answer to that question will determine whether you're still in business in five years.

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If you're navigating this shift and need strategic clarity on what comes next, that's what I do through NewtonSquared. Let's talk about where your agency stands and what options are actually available to you.