We Need to Talk About Money

Not creativity. Not strategy. Not awards.

Money.

Because behind a growing number of agency failures, restructures, and quiet struggles, there is a conversation the industry still avoids.

How agencies make money. How they manage it. And how quickly things unravel when they get it wrong.

What is going wrong?

Last week, another agency went into administration. My heart breaks. I have spent 25 years in them. They are full of the most talented, creative, strategic and energising people to work with.

But things go wrong. On the surface, the explanation is familiar: financial instability, maybe unsuccessful investment or merger efforts, challenging conditions.

But look closer, and a more uncomfortable picture emerges.

Production companies left unpaid, despite clients having fulfilled their financial obligations. At the same time, balance sheets show a steady erosion of net assets.

This is not just about revenue or commercial pressure. It is about how agencies manage and model money.

The pressure on agencies has never been higher

To be fair, agencies today are operating in a far more difficult environment than even five years ago.

• Retainers are disappearing. Predictable income has been replaced by project work. Agencies are pitching constantly just to maintain revenue.
• Margins are being squeezed. Competition is intense. Pricing is driven down. Work is often under-scoped to meet client demands or expectations.
• In-house agencies are rising. Clients are building internal teams, forcing agencies to collaborate, compete, and justify their value on every brief.
• AI is resetting expectations. Content is faster to produce, and clients expect it to be cheaper too, whether that reflects reality or not.

None of this is theoretical.

It is daily pressure.

The industry's most dangerous strategy: hope

Inside many agencies, there is an unspoken response to this pressure.

When the numbers do not quite work, the plan becomes:

• We will win that pitch.
• Next quarter will be better.
• This new client will turn things around.

Hope fills the gap.

And for a while, it works.

But underneath:

• Margins are still tight.
• Costs are still high.
• Cash flow is still fragile.

So the gap gets bridged the only way it can be:

• Payments are stretched.
• Timing is relied upon.
• Incoming cash solves today's problems.

Not as a deliberate strategy, but as a gradual drift.

Until there is no wriggle room left.

When finance is treated as back office, risk becomes invisible

Most agencies still treat finance as a support function:

• Reporting what has already happened.
• Managing compliance.
• Chasing invoices.

But agencies are not simple businesses.

They are unique and complex financial ecosystems:

• Client money flows through them.
• Supplier obligations are complex and beyond the everyday overhead challenges.
• Timing differences create constant pressure.

When finance is removed from decision-making:

• Pricing is agreed without full scope or cost visibility.
• Production is committed without cash planning or consideration to client process.
• Short-term decisions for a quick fix are made without understanding the impact on working capital.

And critically:

Cash starts to be treated as availability, not responsibility.

That is when the lines blur between:

• Agency money.
• Supplier money.
• Client money.

And once that clarity is lost, the outcome is predictable.

How agencies can fix it

The agencies that survive this shift do not just “have better finance”.

They think differently.

1. Move finance from the back office to the centre

Finance should sit at the heart of:

• Commercial decisions.
• Operational planning.
• Leadership conversations.

Not reporting on decisions after they have been made but shaping them before they are.

Because when finance is involved early:

• Pricing improves.
• Risk is visible.
• Decisions are grounded in reality.

2. Replace hope with visibility

Hope is not a strategy. Visibility is.

That means:

• Weekly cash flow forecasting.
• Clear understanding of liabilities.
• Scenario planning, not assumptions.

When you can see what is coming, you stop relying on what might happen.

3. Invest properly in financial capability

This is where many agencies fall short.

They invest in:

• Creative talent.
• New business.
• Marketing.

But underinvest in:

• Senior financial leadership.
• Systems that reflect reality.
• Processes that scale.

Finance is not overhead.

It is infrastructure.

And without it, growth and stability become fragile.

4. Separate money clearly and rigorously

Agencies must be crystal clear on what cash represents:

• What belongs to the business.
• What belongs to suppliers.
• What belongs to clients.

Because confusion here is where trust breaks down, and where problems escalate fastest.

5. Build a culture of financial accountability

This is not just about the finance team.

Client services, production, leadership: everyone should understand:

• The financial impact of decisions.
• The relationship between profits and cash.
• The cost of getting it wrong.

Because ultimately, financial discipline is cultural, not just operational.

The bottom line

The industry has changed.

But in many agencies, the financial mindset has not.

And that is the gap.

Because in today's environment, where revenue is unpredictable, margins are tight, and pressure is constant, financial discipline is not optional.

It is survival.

My final thought

I have seen first-hand how often agencies rely on hope to bridge the gap between where they are and where they need to be.

Sometimes it works.

Until it does not.

The agencies that succeed next will not just be creatively brilliant.

They will be financially intentional.

And they will treat finance not as a back-office function, but as the engine of the business.

If you are worried about money, budgeting, visibility, give me a call, find me on LinkedIn or check out www.collectiveco.ai.