AI is changing not just how we tell stories but also who owns the narrative and how its impact is measured. The convergence of product thinking, technical agility and creative communications is reshaping the agency model from the inside out.
The traditional service-based agency model is under increasing pressure. Budgets are shrinking, project cycles are tightening, and clients are no longer satisfied with abstract notions of awareness or engagement. They want measurable outcomes. What they are getting instead, according to Manuel Hüttl, Chief Executive Officer at Milk & Honey PR Germany, is a reinvention of agency value itself.
“There is a real shift happening in the industry, and you can see how agencies are adjusting their business models because new revenue streams are becoming necessary,” Hüttl explains. “AI is undoubtedly one of the main drivers of this transformation. In my twenty-five years in communications, I have not seen a single technology reshape our landscape so quickly or with such relevance.”
Productisation, once the preserve of SaaS start-ups and software vendors, is now encroaching on creative industries. It is not just about automating processes but about packaging services into scalable, repeatable, and commercially viable tools that offer quantifiable value. For agencies, this means moving beyond retainer models and reactive storytelling towards platforms, tools, and AI-enabled systems that deliver lead generation, real-time analytics, and automated content optimisation.
The value chain is collapsing and expanding simultaneously
AI is acting as both an accelerant and a unifier, collapsing once-discrete functions across marketing, communications, sales, and data. Hüttl is clear that AI’s true promise lies in freeing up time and attention for creative work while building connective tissue between previously siloed departments.
“Initially, we were all just experimenting with generative AI tools, but the pragmatic value quickly became clear,” he says. “It is improving efficiency, cutting costs, and shifting how we think about the entire development cycle of communications. This is no longer about isolated prompting experiments; it is about thinking differently at a structural level. Just as low-code and no-code tools democratised software development, AI is now giving agencies new levers to build and scale communications products.”
Not every agency is culturally equipped to take that leap. For many, innovation happens only when it becomes unavoidable. But Hüttl sees opportunity in the very nature of that reluctance. The ones who move now, who are willing to experiment, to fail fast, and to co-create with clients, can shape what the next phase of communications looks like.
AI demands speed but also trust
The increasing pace of execution does not come without friction. Regulatory frameworks, such as GDPR, have struggled to keep pace with the demands of data-driven communications. At the same time, clients and consumers expect transparency and ethical accountability in the creation and deployment of AI-generated content.
“We launched our ethical playbook for AI in mid-2023 because we saw that if we do not set our own standards, we will be playing catch-up with every new development,” Hüttl continues. “The regulations were already outdated when they were introduced. We need dynamic frameworks that can evolve with the technology and reflect the speed of change in our industry.”
He argues that in many cases, self-governance will have to fill the gaps left by regulatory lag. Agencies will need to demonstrate that they can use AI responsibly, transparently, and in alignment with their clients’ values. This will be critical not only for compliance but also for maintaining trust, especially as AI-generated content plays an increasingly significant role in shaping brand perception.
Younger audiences are rewriting the rules of engagement
What is clear is that the legacy methods of content distribution are not only ineffective but also obsolete. Static whitepapers and templated press releases no longer resonate with mobile-first, emotionally driven audiences who expect content to be interactive, personalised, and instantly accessible.
“We need to see the world through new lenses,” Hüttl argues. “My daughters are part of a generation that consumes and manipulates information completely differently. Agencies must do more than develop good stories. We must ensure those stories are amplified, distributed in real time, and adapted to the digital environments our audiences inhabit.”
This shift is as much cultural as it is technical. “Agencies are still relying on outdated distribution models even when the content itself has evolved, he continues. “What we need is constant innovation in how messages are delivered and consumed. The challenge is not just relevance; it is attention. If storytelling does not match the channel expectations of younger demographics, it risks irrelevance, regardless of its quality.
The client-agency relationship is being redefined by AI
One of the most significant consequences of this transformation is how AI enables agencies to communicate with new internal stakeholders. Where once the conversation centred on marketing teams, productised AI offerings are now relevant to sales, customer success, and even finance.
“With tools like Wibook and Wicard, we are not just talking to CMOs anymore,” Hüttl explains. “We are sitting down with sales leaders because these tools generate leads and track real-time engagement. That changes the conversation completely.”
AI is not just about augmenting creativity. It is a strategic tool for agencies to assert relevance in a market where marketing spend is often the first casualty of cost-cutting. Product-led offerings provide agencies with a tangible, ROI-focused value proposition that finance teams can immediately understand.
“Clients want to know what the impact is,” Hüttl adds. “Awareness alone is no longer a satisfactory answer. When we productise, we create a bridge between brand storytelling and sales outcomes, and that is what clients need in this climate.”
Measurement is maturing but remains incomplete
With interactivity and analytics baked into AI-powered content, agencies now have far greater visibility into how their work performs. But Hüttl cautions against reducing success to a dashboard metric. “Yes, measurement is essential, especially with digital tools,” he says. “But it is not the full picture. You cannot quantify everything that matters in communications. Reputation, emotion, the resonance of a story, these are not always trackable in a spreadsheet.”
This tension between quantifiable metrics and qualitative impact is not going away. However, AI can at least enhance the granularity and responsiveness of measurement, providing agencies with more precise tools for performance tracking without losing sight of the broader narrative arc.
Partnerships, not platforms, will define the next evolution
The clearest sign of how agencies must evolve lies in their relationships with technology partners. Hüttl is unequivocal: the future belongs to those who collaborate deeply across disciplines. “I have never developed software,” he says. “I do not claim to know how. But I have the ideas and the business logic. That is why we work with AI implementation partners like Intelliaim and Lazy Consulting. These relationships are not transactional; they are long-term, trusted, and strategic.”
For agencies to remain competitive, particularly in AI-driven markets, these partnerships must go beyond surface-level integrations. They must enable the co-creation of intellectual property (IP), collaborative product development, and long-term alignment on innovation strategy.
AI will not replace creativity, but it will demand better leadership
The long-term impact of AI on teams will not be found in job losses but in job redesign. Hüttl sees a future where mundane tasks are increasingly automated, leaving room for strategic, creative, and high-impact work. “Transcribing meetings is gone,” he continues. “Time-consuming admin is gone. Our teams can now focus on storytelling, innovation, and delivering value to our clients. That is where the energy should be.”
But culture will matter more than ever. Agencies must be willing to embrace risk, develop a fail-forward mindset, and lead clients into new territories rather than follow them. “If you want to be seen as a thought leader, you cannot wait until a technology is safe and proven. You must move first,” Hüttl concludes.
The fusion of AI and communications is not about replacing people; it’s about augmenting them. It’s about reinventing the value of what they do, doing it faster, smarter, and with greater impact than ever before.
