Andrew Foxwell (Foxwell Founders / Scalability School) sits down with Andrew Faris (AJF Growth / The Andrew Faris Podcast) for a joint co-release episode to break down the findings from the Foxwell Founders x Motion 2026 State of Agencies Report. A data-rich survey of hundreds of agency owners and in-house operators across 30 countries. The conversation covers AI’s dual role as the #1 growth opportunity and the #1 threat for agencies, why only 11% of agencies have produced clear top-performing AI-generated ad winners, the reality behind agency margins (42% running net margins above 30% while many founders still struggle), why in-housing is the #1 reason agencies lose clients — and why it usually backfires — and the uncomfortable truth that many agency founders grow for ego rather than strategy.

Along the way, Faris offers a sharp framework on how brands should think about paying their agencies, and Foxwell shares candid coaching insights on what separates agencies that thrive from those that stall out.

Key Takeaways:
– Why 26% of agencies say AI-powered services are their biggest growth opportunity — yet privately admit they’re terrified of it?
– Is AI actually working for creatives or is just generating slop? (Only 11% of agencies have produced a clear top-performing AI-generated ad winner.)
– 42% of agencies report net margins above 30%. So why are so many agency founders telling Andrew Foxwell they’re broke?
– Is in-housing the worst move most brands make?
– The gross margin range your agency should be sitting between.
– Are agency founders growing because they have a strategy or because they want to sit at the big [kid] agency table?
– When the average tenure of an in-house growth director might only be ~18 months, is there a fundamental misalignment between founders and the people they hire?
– If AI amplifies slop just as well as it amplifies great ideas, why do so many agencies think volume is the play?
– Should more brands be firing their CRO agency and building more with Claude Code?

To get the full report head here: www.foxwelldigital.com/2026-state-of-digital-marketing-agencies

This episode of the Scalability School podcast is sponsored by NorthBeam and they just launched Northbeam Incrementality. Northbeam Incrementality gives you easy, automated, self-service incrementality tests, while protecting you from the major mistakes so many people make while running incrementality tests. Your MTA handles the daily tactics, your MMM guides the long-term planning, and Incrementality provides the causal truth. It’s a closed loop that allows you to scale what works and cut what doesn’t. Right now when you head over to www.northbeam.io/incrementality , they’re offering Scalability School listeners 50% off unlimited tests for a year when you join. Just tell them we sent you!

To learn more about Andrew Faris, The Andrew Faris Podcast and AJF Growth you can follow him on X: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://x.com/andrewjfaris
Youtube: https://www.youtube.com/@UCNRTc9YfEa2ag3JLhjb7G2g
Email: podcast@ajfgrowth.com
Work With AJF Growth: https://ajfgrowth.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

To connect with Andrew Foxwell send an email Andrew@foxwelldigital.com

To connect with Brad Ploch send him a DM at https://x.com/brad_ploch

To connect with Zach Stuck send him a DM at https://x.com/zachmstuck

Learn More about the Foxwell Founders Community at https://foxwellfounders.com/

Learn More about the The Hive Haus Creators Community at http://HiveHausUGC.com

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