This week’s advertising news reveals an uncomfortable truth: the industry’s massive investment in in-house production capabilities is solving yesterday’s problem while tomorrow’s value proposition walks out the door. As agencies announce expanded studio facilities and production arms, the underlying creative and strategic thinking that justified their existence continues to commoditize. You can’t infrastructure your way out of an irrelevance problem.
The Studio Arms Race Accelerates While Client Trust Deteriorates
WPP announced this week a significant expansion of its production capabilities through Hogarth, positioning the move as essential infrastructure for modern marketing. According to Adweek, the holding company is betting that owning the means of production will strengthen client relationships and improve margins. Meanwhile, Digiday reported that three major brands are simultaneously building their own in-house creative studios, effectively bypassing traditional agencies entirely.
The dissonance is remarkable. Agencies invest in expensive real estate, equipment, and production talent while their clients conclude that these capabilities are precisely what they can replicate internally. The underlying assumption—that clients primarily value execution efficiency—fundamentally misreads why agency relationships historically mattered. It wasn’t the ability to push pixels faster; it was the outside perspective, strategic courage, and creative leaps that internal teams culturally couldn’t produce.
When production becomes your primary value proposition, you’ve already conceded that the thinking doesn’t differentiate you. And if the thinking doesn’t differentiate you, why shouldn’t brands hire cheaper production resources directly?
Retail Media Networks Create More Noise, Less Signal
The retail media narrative reached peak absurdity this week. AdExchanger covered how Walgreens is launching its own retail media network, joining the dozens of retailers who believe their first-party data represents untapped advertising gold. Simultaneously, advertisers told Marketing Brew that they’re overwhelmed by the fragmentation, inconsistent measurement, and administrative burden of managing campaigns across multiple retail media platforms.
Every mid-tier retailer now thinks they’re the next Amazon Advertising. The problem isn’t lack of retail media options—it’s that most retail media networks offer negligible incremental reach, incompatible measurement frameworks, and require dedicated human resources to manage relationships that generate minimal return. The math only works for the top three to five players with genuine scale.
Yet the gold rush continues because the pitch deck always looks compelling. “We have 40 million loyalty members!” sounds impressive until you realize 30 million are inactive, 8 million overlap with every other retailer’s network, and the remaining 2 million aren’t your target audience anyway. The industry has confused data access with data value, and brands are spending millions learning the difference.
AI Creative Tools Proliferate, Creative Quality Remains Stagnant
Ad Age reported on several new AI-powered creative platforms launching this week, each promising to revolutionize content creation through machine learning. The demonstrations showed competent, on-brand, utterly forgettable work—which is precisely the problem these tools will create at scale.
The efficiency gains are real. Agencies can now produce 10x the creative variations in the same timeframe. But when you study the output honestly, you’re producing 10x the mediocrity. The algorithms optimize for brand guideline compliance and past performance patterns, which by definition produces regression to the mean. Breakthrough creative, by contrast, breaks patterns.
This isn’t a technology limitation—it’s a strategy mistake. The industry is applying AI to accelerate production when the actual bottleneck is creative courage and strategic clarity. We’re making it faster and cheaper to produce work that doesn’t matter, then celebrating the efficiency gains while wondering why brand impact metrics continue declining.
Connected TV Measurement Remains Unsolved Theater
The weekly CTV measurement announcement arrived on schedule. This time, a consortium of programmers announced a unified measurement framework that will supposedly solve cross-platform attribution challenges. If this sounds familiar, it’s because virtually identical announcements happen monthly, none solving the fundamental problem: television remains a reach medium being forced into a performance marketing measurement framework it was never designed for.
Industry coverage from multiple publications treated this as progress, but the measurement question misses the larger issue. The obsession with proving direct response attribution from television advertising reflects how thoroughly performance marketing thinking has colonized the industry’s collective brain. Not everything needs last-click attribution. Not every medium’s value shows up in your conversion tracking.
Television—including CTV—builds brands through repeated, contextually-appropriate exposure over time. The ROI shows up in reduced customer acquisition costs across all channels, pricing power, and customer lifetime value. But because those impacts are harder to measure and require patience, we instead torture the data until it confesses to direct conversions it didn’t actually drive, then optimize toward those false signals.
The Infrastructure Trap: Building Backwards Into Irrelevance
Connecting this week’s themes, a pattern emerges: the industry keeps investing in infrastructure, tools, and capabilities while the actual value proposition shifts toward something these investments don’t address. In-house studios solve production efficiency while brands need strategic courage. More retail media networks emerge while advertisers need less fragmentation. AI tools accelerate creative output while breakthrough thinking remains scarce. CTV measurement improves while the measurement framework itself misleads.
This is the infrastructure trap. When you’re uncertain about your value proposition, investing in tangible assets feels productive. Studios, platforms, tools, and technology can be photographed, demonstrated, and depreciated. The balance sheet recognizes them. But the actual scarce resources—perspective, taste, courage, strategic clarity—resist infrastructure solutions.
Agencies building production studios are making the same mistake Blockbuster made investing in more retail locations while Netflix redefined distribution. The infrastructure itself becomes an anchor, requiring utilization rates that force you to accept marginal work to fill capacity. You become a production facility that occasionally thinks rather than a thinking partner that occasionally produces.
What Actually Matters Going Forward
If the in-house studio trend represents misallocated capital, where should resources flow instead? Toward the human capabilities that AI can’t replicate and clients can’t easily internalize: deep consumer insight, cultural fluency, strategic courage, and creative judgment that pushes beyond safe. These skills don’t require capital-intensive infrastructure—they require different talent, compensation models, and client relationship structures.
The agencies that will matter in five years aren’t building bigger studios—they’re building smaller, more senior teams with genuine expertise in specific categories or capabilities. They’re walking away from clients who primarily value production efficiency. They’re compensating people for thinking, not utilization rates. They’re small enough to take creative risks without committee dilution.
This week’s news cycle, like most weeks, showcased an industry investing heavily in operational infrastructure while the actual game shifts elsewhere. The companies recognizing this early enough to redirect resources will survive the transition. The rest will have beautiful, expensive studios producing competent work nobody remembers.