AI's role in agencies and service demand

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Are you thinking about expanding your agency through acquisitions? Buying another firm can be one of the fastest ways to scale, but only if you choose the right partners and nail the cultural fit. Otherwise, growth can quickly turn into chaos.

Today's featured guest has been through five acquisitions, each one teaching her a different (and sometimes painful) lesson about what truly makes a merger succeed. In this episode, she opens up about her biggest acquisition missteps, the cultural mismatches that nearly derailed integrations, forecasting errors she didn't see coming, and the identity challenges that arise when two teams collide.

Kimberly Eberl is the Founder and CEO of The Motion Agency, a full service marketing and communications shop with offices in Chicago, Cincinnati, and Nashville. While the agency offers everything from creative to content, it is unusually strong in public relations with roughly 20 PR pros on staff.

Kimberly has completed five acquisitions, navigated the cultural and financial highs and lows of M&A, and grown Motion into one of the most respected independent agencies in the Chicago market.

In this episode, we'll discuss:

• When acquisitions help agencies scale—and when they backfire.

• Lessons learned from five agency acquisitions.

• Why agency owners often misjudge valuation and earnouts.

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From Fired Account Director to Agency Founder

Kimberly jokes that she is one of those founders who got fired into entrepreneurship. At her previous agency, the account director role was undefined and impossible to succeed in. The revolving door should have been a clue. She lasted a year before being let go and scrambling to figure out her next move.

With no grand plan, she fell into freelancing in 2006. The economy was healthy. The demand came fast. And pretty quickly she reached that moment every accidental agency owner hits. Either say no to work or hire help. She chose to hire.

That early decision set the tone for the next decade. Instead of trying to do it all herself, she leaned into building a team and letting the business grow past her personal capacity.

Outgrowing a Single-Service Model: Moving Beyond One Specialty

Kimberly started as a PR pro. That focus worked for a while, but eventually she noticed how much money she was leaving on the table. Clients wanted websites, creative, content, and she was constantly referring the work away.

The big shift happened when she decided to expand beyond PR and bring more capabilities in-house. This meant hiring outside her comfort zone and learning how to oversee work she could not personally do. That decision opened the door to real growth.

Many agency owners get stuck right there. They stay in their one specialty because it is safe. Kimberly pushed through that discomfort and built a service mix clients actually wanted.

The Reality of Acquiring Another Agency: Lessons from 5 Acquisitions

Kimberly opted to add these new services through acquisitions. So far, she has completed five and every one had a different lesson.

Her first major acquisition was bold. She bought an agency twice the size of her own. Financially and emotionally, it was a lot. Looking back, she admits she may not do a deal that large again, especially in a specialty she did not personally understand. But she also learned that size does not determine complexity. A one-person agency with contractors had just as many integration headaches as a larger shop.

What mattered most was agency culture. Some deals looked perfect on paper but fell apart because the values, expectations, and behaviors did not align. One deal in particular was financially great and culturally awful. She kept one client from that acquisition. Another deal was financially terrible but culturally perfect. Years later, most of those staff members are still with her.

Her biggest warning: never ignore cultural red flags during the courting phase. Take time to hang out with the sellers, how they operate, and experience their company's culture. Go to dinner, Travel together. You'll notice small behaviors (snapping over minor problems, chronic lateness, lack of transparency) that won't disappear after the contract is signed.

Valuation Mistakes That Kill Good Deals

Kimberly also dove into how she approaches valuations and why so many sellers get this part wrong. She focuses on future performance, realistic forecasts, and removing costs that will not continue after the sale. She also pushes back on inflated projections. If an owner claims revenue will double, the earnout should reflect that. Big promises are fine, but they should come with big accountability.

One agency she walked away from wanted a valuation equal to twice their gross revenue. They were using cash-based accounting and ignoring profitability. It was an immediate red flag. Kimberly's advice to owners is simple. Build a business that is sellable even if you never plan to sell. Get your financials clean. Use accrual accounting. And be realistic about your numbers.

Leadership, Loyalty, and the Hardest Skill — Letting Go

As the agency scaled, leadership challenges became just as complex as financial ones. Kimberly admits she is confused about why she is the largest woman-owned agency in Chicago at only seventy people. She is proud of the title, but she wonders why more women are not reaching similar scale.

There are no differences in capability, but many female founders still hit a ceiling often tied to loyalty, delegation, or difficulty letting people go. Some owners, especially women, treat their team like family and struggle to make hard decisions around performance. She admitted she has been loyal to a fault at times and is working on finding a healthy balance.

Agencies function more like all star sports teams. The roster changes every year. People get promoted, moved, or sometimes released. That does not mean you failed. It means you are adapting so the team as a whole can win.

Kimberly is even working on building hobbies outside her agency because she noticed how much of her identity was tied to work. It is a relatable struggle for founders who have poured years into their companies.

AI Changes the Work, Not the Need for Agencies

Let's be clear, agencies are not going away because of AI. Kimberly certainly doesn't believe that. She treats AI like an intern. Helpful. Fast. But still needing quality control, creativity, and leadership. Clients still want real relationships. They want someone who understands context and nuance.

Agencies serving tech-savvy individuals will feel churn from AI, but agencies serving plumbers, service-based businesses, and non marketers will be fine. These clients want to stay in their lane and hire experts for everything else.

Marketing evolves, but agencies survive because the business model adapts.

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