The $123 ad that frightens big agencies

Five years ago, producing a 30-second TV commercial was a serious undertaking.A team of producers, editors, colorists, and sound designers would labor for weeks — and the final bill would rarely land below $10,000. The biggest cost wasn’t equipment or even talent; it was time — time spent in the edit suite cutting picture, color correcting film, designing sound, and mixing audio for broadcast.

Today, I made a similar 30-second spot — in a single day, without leaving my desk. Total cost: $123.

$88 for my monthly Arcads subscription (AI-generated video ads) and $30 for Canva Pro (finishing and design). No studio or crew. No edit suite. No craft services. Just me, a laptop, and a few AI tools. Oh, and a bowl of leftover Halloween candy.

The fact that I can create a professional commercial in less than a day for less than the cost of a nice dinner — perfectly captures the scale of disruption the established titans of advertising now face.

This 30-second commercial, created entirely by generative AI, cost $123 to make. It was created, start to finish, in only a few hours.

The Inevitable Collapse of Cost -- and Headcount

Generative AI is collapsing production costs in ways no automation wave before it ever could. When text-to-video tools like Arcads can generate camera moves, lighting, and actors; when Canva can lay out motion graphics and branded visuals in minutes — the barriers to professional content creation all but disappear.

That doesn’t just mean cheaper ads; it means fewer people are needed to make them. What once took ten specialists now takes one person with a clear concept and a good understanding of prompts. The ripple effects are massive.

Traditional agencies have long relied on volume work — the hundreds of small, “bread-and-butter” projects that pay the bills between big campaigns. But as AI makes it possible to deliver high-quality creative faster and cheaper, those steady revenue streams evaporate. Agencies can no longer collect premium fees for run-of-the-mill creative output, because the value of simple execution is trending toward zero.

The Great In-sourcing Moment

For clients, this shift opens a powerful new option of doing it themselves. If a marketing director can produce a polished spot with a few AI tools and an hour of effort, why hire an agency at all?

AI is flattening the creative economy. It’s giving brand teams the means to in-source tasks that once required outside expertise — social videos, basic campaigns, even early-stage brand concepts. The line between “client” and “agency” is blurring as generative tools make professional-grade output accessible to anyone with imagination and internet access.

This doesn’t mean agencies will disappear, but it does mean they’ll need to quickly rethink their value proposition. Their survival won’t depend on owning production resources — it will depend on owning ideas, strategy, and human insight. The agencies that thrive will be those that trade on creative intelligence, not on production pipelines.

New Models for a New Era

The modern marketing agency is a misnomer, as it is much more of a consulting firm. Gone are the large retainer-based accounts. Instead, client engagements are shorter and occur more sporadically. Sprawling offices filled with editors and producers are now lean, technology-driven creative networks — teams that spin up around projects and dissolve when the work is done. Overhead will shrink. Expertise will be concentrated with subject matter experts. Tools will handle the labor; humans will handle the meaning.

In this new landscape, success won’t come from scaling headcount but from scaling thinking. The real differentiator will be the ability to interpret human emotion, cultural nuance, and brand purpose through the lens of rapidly evolving technology.

Why I Started Human Instinct

This is exactly why I founded Human Instinct. I didn’t want to resist the AI revolution — I wanted to help shape it. My goal was to ensure that, as marketing becomes more data-driven and machine-generated, the art of marketing remains as vital as the science.

Human Instinct was built as a different kind of marketing firm:

• Low on overhead, because technology replaces the need for massive infrastructure.

• High on expertise, because real value now lives in strategy, narrative, and creative intuition.

• Flexible and technology-powered, designed to move as fast as the tools we use.

We see AI not as a threat but as an amplifier — a way to bring human ideas to life faster, cheaper, and more powerfully than ever before.

The Future Relationship Between Man and Machine

Generative AI has already rewritten the economics of advertising. The next frontier will be rewriting its purpose. As tools handle the mechanics of creation, humans must lean into the why — the storytelling, empathy, and cultural insight that no algorithm can replicate.

The $123 commercial isn’t just a case study in efficiency; it’s a glimpse into the future of creative work. The agencies that survive — and the creatives who lead — will be the ones who embrace this shift without losing what makes their work human.

Because at the end of the day, AI can generate content, but only people can generate connection.