MARKET DIVERGENCE CALLS FOR A NEW PLAYBOOK—AND NEW MODELS
The most dangerous assumption in 2026 is treating the advertising market as a single entity. S4 Capital Executive Chairman Sir Martin Sorrell argues the industry has split intotwo opposing economies: a shrinking $300 billion traditional sector and a booming $700 billion digital ecosystem. The fracture explains why we are seeing defensive consolidation from legacy players while others race to build new operating models.
In particular, this transformation renders legacy pricing structures obsolete. As AI scales, the primary cost driver is shifting from human labor to the computing power required to run intelligent workflows. While procurement teams are used to paying for heads, efficiency now depends on managing compute cycles. The industry is heading toward a reality where brands stop paying for time and start structuring deals around technological output.
CES WRAPPED: FROM EXPERIMENTATION TO ORCHESTRATION
If 2025 was a year of experimentation, 2026 is the year of execution. At CES, the conversations focused on the shift to agentic workflows that fundamentally transform the ways organizations function—in particular, the move from using AI to make assets to AI that makes decisions. Our recap from this year’s show outlines how to architect these systems.
WITH UBIQUITOUS TECH, STORYTELLING IS THE ONLY REAL DIFFERENTIATOR
If everyone can generate a masterpiece in seconds, the output itself is no longer the point—the why behind it is. As Dwayne Koh, Head of Creative at Leonardo.Ai, points out, “We've reached a point where there's this almost very fine line between what’s AI and what’s not, and you can't tell anymore... and that’s where the importance of storytelling comes in.” When technical magic becomes a commodity, the new competitive edge isn't the size of your production budget, but the strength of your human-led craft.
OpenAI has officially begun testing ads, debuting with a premium $60 CPM model. While advertisers are lining up, early analysis suggests that paid placements perform best when they are validated by the organic answer. In short: if the AI trusts your brand enough to mention it in the chat, your ad feels relevant. This dynamic requires a new strategy we call “answer Independence,” where paid visibility relies on organic foundation.