The most telling line in Publicis’ announcement of a new AI Development Hub in Singapore isn’t about technology. It’s the promise that the hub will create roles rather than remove them. The hub itself is a serious bet: engineers, data scientists and product designers working alongside strategists to build proprietary marketing technology in Singapore and scale it outward. But the reflex behind the promise is the oldest one in the agency business. When in doubt, hire.
That reflex explains why the biggest groups overbuilt headcount for a decade while the economics were asking them to build product.
Headcount was the product
Agencies sell capacity. Revenue follows people, margin is measured as EBITDA, and the metric rewards a busy bench, so hiring ahead of the next pitch is not a lapse inside that model. It is the model.
The bill arrives when clients stop paying for capacity. Investing.com’s snapshot of the sector puts digital ad spend growth at about 8.7 per cent in 2025 against agency revenue growth near zero, as clients protected media budgets and squeezed fees, and shows Omnicom heading from roughly 120,000 staff to about 105,000 by year-end. Per the Financial Times, relayed by Reuters, WPP cut about 11,000 jobs since the start of 2025, leaving 97,388 people by June.
What the market pays for it
Public agency groups traded at a median 0.8x revenue and 6.6x EBITDA at the end of 2025, according to Canaccord’s data as compiled by Axia. Independent agencies typically sell for 3-7x EBITDA, with strategic outliers reaching 8-12x. Martech M&A tells a different story: a median of 3.5x revenue in 2026 so far, and 8.0x for AI-native companies.
Line up the revenue multiples and a dollar of martech revenue is priced at more than four times a dollar of agency revenue, and AI-native martech at about ten times. Different samples, so read it as direction rather than arithmetic.
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The top of the ladder sits higher still. ValueAdd VC’s October tracker puts the median multiple for nine private AI companies at 27.1x annualised revenue, against 4.3x for public SaaS. In marketing, Clay raised at a US$7.1B valuation in September on roughly US$200M of run-rate revenue, about 35x, while non-AI martech such as Seismic and AppsFlyer sit near 12x and 8x on Multiples.vc. Private marks on annualised figures are soft, but the pattern holds: the premium follows AI-native revenue, not the martech label.
The sharpest illustration sits inside the holding companies. WPP’s 14.8x EV/EBITDA is the highest of the big three, yet it is a symptom, not a premium: its EBITDA fell from US$1.96 billion in 2021 to US$752 million in FY2025, so the denominator collapsed. Publicis, the one still growing, sits at 9.6x. A model measured on EBITDA gets punished twice when it shrinks.
Two people, one payroll, opposite incentives
An agency owner is paid on EBITDA and is a capacity manager by training: utilisation, a full bench, a retainer renewed. A buyer then discounts that earnings stream for founder dependency and client concentration, which is why most independents land well below public-market multiples.
A martech CEO is paid on a different question: how much more revenue can this customer base produce without adding cost? Net revenue retention, gross margin and growth set the price. Public software with retention cohorts above 120 per cent traded at 11.7x revenue against 4.1x below 100 per cent, in SEG data compiled by Array Capital. Levels have compressed since; the ratio is the point.
So the owner reads a new hire as growth. The CEO reads it as a cost to be spread across more customers. Same payroll, opposite incentive. That gap, more than any technology gap, is why transformation stalls: moving to a product model means treating your own headcount as the thing to decouple from revenue.
What would make an agency price like product
Publicis shows the discipline is possible. It keeps headcount discipline as a rule, holding headcount growth below organic revenue growth, with about 114,000 people and roughly 5,100 net hires in 2025. WPP put more than £300 million into its WPP Open platform in 2025 while shrinking staff. Those are product bets funded by payroll cuts, which is not the same as a product business.
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Three tests separate the two:
- Revenue that doesn’t rise with hours: licences, usage or outcome fees.
- Retention you can show cohort by cohort, not client anecdotes.
- A margin story that survives automation, with headcount growing slower than revenue.
Whether the Singapore hub passes depends on whether its output is licensed as software or absorbed into fees. A lab that makes the service faster still sells time; software others can license opens a different line on the P&L.
Why Southeast Asia feels it first
A joint survey by Singapore’s Economic Development Board and McKinsey, cited in the Publicis announcement, found 73 per cent of Southeast Asian companies piloting or scaling AI against 57 per cent globally. f clients are moving that fast, agencies still pricing by the hour risk falling behind the businesses they serve.
A 50-person independent can’t fund an R&D hub and shouldn’t try. It can stop selling hours where it doesn’t have to, and the research and pitch layers are the first place to start.
The question underneath
Among the independent agencies I work with, I’ve seen research and pitch work move from payroll to a repeatable product. One 50-person Singapore agency cut brand analysis from 10 hours to one and client-reporting costs from US$10,000 to US$6,000 a month. Another went from a three-person proposal team to one and cut cost per proposal by 30 per cent.
Owners who want a product multiple have to be seen thinking like product companies, which starts with a steady voice about what they’ve automated in their own shop and what it returned.
So here is the question worth sitting with: if you stopped hiring for twelve months, how much of your revenue would still grow?
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