How agencies drifted into cost‑centre territory
When I look back over my 14 years inside event agencies, from leading operations teams to heading procurement, supply chain and commercial negotiations for businesses managing up to £250m of annual meetings & events spend, there are more than a few patterns stand out.
Competing on price trains clients to see you as a cost
For years, the default response to pressure was a simple statement that I also heard from a client as a tech startup in the global hotel & events industry, and that was, “sharpen your pencil”. You’re expected to compete on day rates, squeeze your commission, and throw in extra services “for free”. It’s considered to be the standard operating procedure in the industry meaning the price is never the price and the service inclusions are never the service inclusions.
I’ve been in those RFPs where procurement teams play agencies off against each other and the only lever anyone really pulls is price. In the moment, it feels rational – fixed costs don’t go away if you lose. But every time you win on price, you reinforce the idea that price is the main thing that matters.
Over time, this consistent process and pattern trains clients to see you as a line item to minimise, rather than as a strategic partner or lever to grow their business. Can you spot the danger?
The commission model hides real work
The old model — “we’ll get paid by the venue, the client doesn’t see it” — is as old as the hills and it has worked for a wee while now, so if it’s not broke, why fix it, right? Well, that is one view but when commissions were cut and the industry exploded in uproar, it didn’t really change the mindset of the large hotel chains. Agencies are increasingly squeezed from both sides with smaller commission margins, bigger expectations, and greater client demand for more and more add-on services that are paid for out of the increasingly smaller commission. Your margins are being eroded and suddenly, the whole model looks very fragile.
Even worse, the model has hidden your value. Clients saw a commission percentage or a project fee, as opposed to the hundreds of small decisions you and your teams made that protected their budget, reduced risk and made their stakeholders look good. Hotels felt they were paying for leads that didn’t convert, and corporate buyers felt that they were paying for admin. In the decade or so that I have been outside of event agencies running a technology business, I have been included in lots of different discussions behind the scenes, and I hear what corporate clients and hoteliers really think about event agency value. It’s an objective opinion, rather than fact, but there is a consistent belief that the agency isn’t providing the level of value for what they’re being paid. This clearly indicates there is a huge amount of hidden value, especially when I hear corporate event planners who say “I don’t need an agency, I can just find a venue myself.” If only it were that simple!
When value is invisible, it’s very easy for everyone to treat you like a cost rather than a profit-centre.
AI and automation hit the work you bill
Fast‑forward to today and AI has the ability to automate chunks of the work agencies have historically charged for: venue sourcing, proposal building, scheduling, reporting, even elements of content and creative.
Clients are experimenting to see what value can be extracted from this new technology and where they’re over-reliant on services where they perceive the value differently to the actual reality. A senior corporate planner can now get a venue long-list, some draft copy and a budget framework without picking up the phone. Is it perfect? No. Is it “good enough” for some situations? Increasingly, the answer is yes.
So this brings us back to the same question: if technology can do the transactional work faster and cheaper, what’s left that only your agency can do, and are you actually charging for that, or are you giving it away whilst you bill for the parts that are being commoditised?
Why “busy” doesn’t equal “valuable”
Many agencies I know are not short of work. In fact, some are reporting they’re busy as ever, in spite of the geopolitical landscape. Where agencies are increasingly finding they’re short is in relation to margin, headroom and respect. The team is working incredibly hard; but it just doesn’t translate into power in the room when budgets are discussed.
This is because there’s a gap between what you really do and what clients think they’re paying for and where the value is.
Internally, you know you’re:
Protecting brands and reputations
Managing risk that never shows up on a slide
Reading internal politics and keeping stakeholders aligned
Making judgment calls with incomplete information
Bringing pattern recognition from hundreds of previous events
Externally, what’s visible is often:
A venue search
A nicely formatted proposal
A project plan
A reconciliation
Can you spot the difference between the two lists and how this impacts the perception of value?
The first list is strategic, whereas the second list looks like admin, and admin can increasingly be automated. If you eradicate the gap, you won’t change the perception and you’ll stay stuck as a cost centre whilst doing work that actually sits much closer to trusted advisor or strategic partner. And that’s if you continue to get given the work.
Procurement’s view (and why it matters)
Having sat on the procurement side of the table as well, I can tell you that most procurement teams aren’t trying to destroy agency businesses. They’re trying to manage risk, show savings and impose some structure around what often looks like a very messy spend category. When procurement first arrived on the scene, it was carnage and you would often hear agency owners and leaders uttering the phrase , “this isn’t buying widgets”. The general feeling being that procurement didn’t understand the nuances of buying complex , value-based services and applying a buying strategy that was centred around buying commodities was very dangerous.
However, if all procurement sees is:
Commission‑based commercial models that don’t map neatly to outputs
Little evidence of structured learning from one event to the next
Limited clarity on who owns what outcomes
…it becomes easy for them to treat you as a cost bucket to optimise rather than a strategic capability to invest in.
The agencies that break out of this pattern usually do three things differently:
They make value visible – not just in a pitch, but in how they report, debrief and forecast.
They link their work to real, stated business outcomes – not just logistics delivered.
They speak procurement’s language – risk, cost avoidance, stakeholder alignment, without losing their own individuality.
So when did agencies become cost centres?
There isn’t a single date you can point to because it happened gradually, over time:
When we accepted that “race to the bottom” pricing was just the way it is.
When we allowed commission to be the only visible representation of our value.
When we let technology eat the low‑end work without redefining what sits above it.
When we didn’t insist on better briefs, clearer objectives and proper debriefs, so events remained hard to measure and easy to cut.
None of this is fatal, but it does mean that if you keep operating the same way with the same model, you’ll keep getting treated in exactly the same manner, and the danger of allowing that to happen should be increasingly clear.
What it looks like when agencies reclaim “value creator” status
The agencies I’ve seen moving in the right direction aren’t necessarily the biggest or the loudest. In fact, such is the nature of innovation, they often aren’t. That aside, what they tend to share in common is:
A different commercial model – where strategic work (programme design, senior stakeholder alignment, measurement) is scoped and priced explicitly, rather than buried in a commission or day rate.
Clear separation between thinking and doing – advisory, design and decision‑support on one line; logistics and execution on another. Clients can see the difference.
Supplier relationships that generate value, not just commission – joint propositions with venues and tech partners that address real client problems and create shared upside.
A point of view – they’re willing to say “no” to work that doesn’t fit and “this is how we do it here” instead of being whatever the client wants on a given day.
They still care deeply about execution, and deliver work to high-standards, but they don’t lead with statements like “we can book your event”. They are thinking on a much deeper and broader level and lead with value statements, such as “we can help you achieve X, and events are one of the ways we do that”.
What this means if you run an agency
If you recognise any of this in your own business, a useful starting point is a simple set of questions:
Where are we still being paid like a cost centre, even though we’re acting like a growth partner?
Which parts of our service could a client realistically replace with AI or another lower‑cost option in the next 12–24 months?
Where do we create value that isn’t currently visible, measured or priced?
If we were starting from scratch today, would we design the same commercial model?
As with any such fundamental review, you don’t have to blow everything up tomorrow, but you can probably no longer afford to assume that “more of the same, but harder” will work either. Not anymore. The rules of the game have changed.
The uncomfortable truth is that the market has already decided that parts of the traditional agency model are a cost centre. The opportunity you now have is to redesign the rest so it’s clearly something else. Plenty will tread water, they will avoid change, so you can steal a march and position yourself to benefit.
If you read this and thought “that sounds worryingly familiar”, what’s the one area of your agency you’d most like to stop being treated as a cost – and what would it take to make that shift visible to your clients?