AI's Impact on Marketing Agencies

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AI isn’t coming for your agency—it’s already here. And if you haven’t set clear guidelines for how your team (and your clients) engage with it, you’re already behind. In this episode, one agency founder shares how he went from AI skeptic to strategic adopter—rewriting his workflows, client communications, and pricing strategy to future-proof his business.

Join us as we explore how to move beyond simply offering AI-enhanced services—and start leveraging AI to boost profitability, streamline operations, and establish your agency as a leader in this new era.

Paolo Vidali is the founder of Hidden Gears, an agency specializing in e-commerce and Shopify. With over a decade of experience in design, development, and digital marketing, Paolo shares his journey into agency ownership and discusses the challenges and rewards of building a small, distributed team across the US and Europe, as well as the factors that are informing his evolving policies on AI use.

In this episode, we’ll discuss:

• Why expertise will still set you apart in the era of AI.

• How Paolo went from AI skeptic to viewing it as mission-critical.

• How you can change your agency’s game by integrating AI into your operations. 

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Sponsors and Resources

Wix: Today’s episode of the Smart Agency Masterclass is sponsored by Wix Studio, the all-in-one platform designed to help agencies scale without the headaches. With intuitive tools, robust native business solutions, and low maintenance, Wix Studio lets your team focus on what matters most—delivering exceptional value to your clients. Ready to take your agency to the next level? Visit wix.com/studio and discover how Wix Studio can transform your workflow, boost profits, and strengthen client relationships.

Making a Low-Risk Jump to Entrepreneurship

Paolo sees his road to owning an agency as accidental, in the sense that it was never the plan to do it full time. Initially working for a digital marketing agency focused on B2B and lead generation, he began freelancing on the side. A couple of years into this, however, he realized the work he was doing on the nights and weekends was scalable and something he could ultimately grow.

Back then, the jump to entrepreneurship seemed like a move he could realistically make without risking much of the low-cost lifestyle he led at the time. If anything went wrong, he’d just go back to working for an agency. He ended up building a successful organization he has intentionally kept small to maintain the close client relationships and team cohesion that have become hallmarks of his business model.

How AI Went from “Maybe” to Mission-Critical

After being in the world of e-commerce for over a decade, Paolo has witnessed firsthand the evolution of digital marketing and the rise of platforms like Shopify. And although he initially didn’t believe the AI hype, it soon became apparent that the landscape was shifting dramatically. It was time to establish policies that dictated how staff and contractors would interact with this technology, so the agency would always be involved in how they experimented with it.

The team's approach to AI evolved in two parallel tracks: externally, they carefully calibrated AI integration based on individual client preferences, while internally conducting tests to identify operational efficiencies.

Years later, what Paolo originally envisioned as merely a future service offering has instead become fundamental to the agency's internal operations, with AI tools now dramatically reducing time spent on previously labor-intensive tasks like content creation, customer support, and data analysis.

Why Expertise Will Still Set You Apart & How This Can Affect Your Pricing

Predictably, one of the concerns around AI as its usage spread was around agencies becoming obsolete. In reality, Paolo can clearly see the difference between his team using AI, with many hours dedicated to understanding the technology and using it effectively, and any random person using the same tools. Now the challenge becomes how much value to place on that knowledge when it comes to their overall prices.

Should they charge based on the time saved through automation, or should they consider the expertise required to generate quality outputs? Much like Paolo’s mother can still out-Google him thanks to her deep understanding of information retrieval as a librarian, professionals in the field now possess the knowledge to input data effectively and assess the quality of the results produced by AI.

This is why agencies should be charging on a value-based model instead of hourly rates. The technology certainly aids in finishing the tasks a lot sooner, but it’s the agency’s knowledge of the tools that helps complete the task efficiently.

ChatGPT Changed the Game—Now Agencies Have to Raise Theirs

Paolo's team is conducting systematic A/B testing to evaluate AI's potential impact on their agency workflows, quantifying time savings and process optimizations to determine where technology genuinely enhances value.

To foster innovation while maintaining control, Paolo encourages staff to explore diverse AI tools during personal time and share promising discoveries, while implementing strict data protection protocols. Client information can only be processed in secure, isolated environments that prevent data from being incorporated into learning models, which led to his specific ban on Deepseek.

AI has already found practical applications throughout the agency. Paolo personally leverages it for copywriting and proposal refinement, appreciating how it enhances professionalism and improves success rates. His team is also using AI for drafting content, something clients are notified about and an area where they are aware the AI results will still need to be fact-checked and revised. In his view, the use of AI has to be justified as being something that adds to the process to save time, cut costs, and improve results, rather than simply being a crutch.

Overall, Paolo does think that the way people now shop for and consider content services and content marketing has forever been changed. He’s already seen a decline in companies’ investment in SEO, since clients feel there’s no need if they can just ask ChatGPT to write that content. Despite this shift, he remains confident that agency expertise produces superior results. The challenge facing agency owners now is strategic adaptation—integrating AI capabilities while demonstrating their distinctive value in an evolving digital landscape.

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