AI and creativity shape agency strategies, report

The 2025 Annual Review from the Institute of Practitioners in Advertising highlights an advertising sector facing increasing commercial pressure as agencies work to balance tighter budgets with growing expectations around strategic value and measurable business outcomes.

According to the report, agencies are being asked to deliver stronger strategic support while operating in an environment shaped by economic uncertainty, changing technology, and increased scrutiny over return on investment.

AI adoption grows across agencies

The review identifies artificial intelligence as one of the defining themes shaping the industry in 2025. The Institute of Practitioners in Advertising said agencies are increasing experimentation with AI across creative development, workflow management, and media planning.

At the same time, the organisation stressed that human creativity remains central to advertising effectiveness, positioning AI as a tool that supports agency expertise rather than replacing it.

Commercial sustainability also emerged as a major focus, with the report highlighting concerns that traditional agency remuneration models no longer reflect the strategic and creative value agencies provide to clients.

Industry focuses on talent and inclusion

The review also outlines ongoing efforts around diversity, equity, inclusion, and workplace wellbeing, including initiatives designed to improve access to advertising careers and support more inclusive agency environments.

In addition, the Institute of Practitioners in Advertising pointed to continued investment in professional development, effectiveness training, and member services as agencies respond to technological and economic disruption.

The report also reinforced advertising’s wider economic role, arguing that creativity and marketing effectiveness continue to support business growth and national competitiveness.

Paul Bainsfair, Director General, IPA: “The past year has been one marked by turbulence for the sector. The industry’s ability to balance innovation with human creativity and long-term value creation, while continuing to invest in talent and trust, will shape agency success in the years ahead.”

The full review can be accessed here

www.ipa.co.uk

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