Why the Bloated Agency Is a Dead Model: Underdog Digital

Q: What does 'people like us do things like this' mean?

It's Seth Godin's line from his book This Is Marketing, and it's about belonging. People don't buy from brands, they buy into groups they identify with - and they behave the way the group behaves. Applied to agencies: a lean agency is a tribe with a clear identity and a way of working. A bloated agency is a machine with a target market and an org chart. Tribes earn trust. Machines bill for it.

Q: What does 'marketing is a generous act' actually mean?

It's Seth Godin's definition of marketing from his book This Is Marketing: the generous act of helping someone solve a problem. Demand has to be created, attention has to be earned, and products don't sell themselves. What changes over time is who does the marketing and how. In 2026, helping means operators who use AI and systems to do the work, not agencies that use meetings and account managers to talk about the work.

Q: What's the Seth Godin reference about?

Seth Godin's book This Is Marketing gives the tribe line - 'people like us do things like this' - and the definition: marketing is the generous act of helping someone solve a problem. The generous act is the work that actually moves a client forward. The bloat around it - reports, meetings, account manager layers - is the opposite of generosity. It's billing for theatre. The craft of marketing stays. The delivery mechanism (agencies, retainers, reports) is what's being rebuilt.

“People like us do things like this.” Seth Godin wrote that in This Is Marketing, and it’s the whole agency game in one line. A tribe knows what it is and how it works - and the client can feel the difference. The lean agencies are tribes: small, senior, and fast, no committee required. The bloated ones are machines with a target market, an org chart, and a retainer built to feed both.

Quick answer: The bloated agency is a dead model because it sells the opposite of what works. Machines bill for overhead. Tribes deliver help. The research is unambiguous - bureaucracy is a tax, bigger teams get less per person, and trust decides who gets bought. In 2026, the tribe wins. Every time.

People like us do things like this.

Not the bloated model: account managers, status meetings, quarterly business reviews, and reports nobody reads. That model is dying because it never had a tribe. It had a pipeline. And pipelines don’t earn loyalty - they bill for it.

This post is about what survives and what doesn’t. The next five years of digital marketing will look nothing like the last fifteen.

Every Machine Has a Fuel Bill

Every traditional agency you’ve ever worked with has roughly the same cost structure:

Account managers (who don’t do the work)
Project managers (who schedule the meetings about the work)
Bookkeepers and finance staff
Office leases and fit-outs
Computer equipment and software licences
AI tooling stacked on top of SaaS tooling stacked on top of more SaaS
Meetings about meetings
Staff superannuation, holidays, sick leave, training budgets
Partner margins, director salaries, and the silent tax of “it’s how we’ve always done it”

All of that overhead goes into your retainer. Every month. Whether or not anything moved. You’re paying for office snacks and a project manager’s Outlook calendar before a single link gets built or a single page gets optimised.

That’s the machine’s fuel bill. A tribe doesn’t have one - it spends the money on the work.

The Bloat Tax, By the Numbers

This isn’t an opinion. The research on overhead is unambiguous, and it has been for decades.

Bureaucracy is a tax. Gary Hamel and Michele Zanini spent years studying the cost of management layers, and their estimate in Humanocracy is that bureaucracy taxes the US economy to the tune of over $3 trillion a year - roughly 17% of GDP. That’s the price of people whose job is managing the work instead of doing it. Every agency retainer that carries an account manager layer is a tiny slice of that tax, and you’re the one paying it.

Bigger teams get less per person. The Ringelmann effect is a century old. In 1913, French engineer Max Ringelmann found that when people pull a rope in a group, each individual pulls less than they do alone - and the bigger the group, the more each person slacks. The finding has been replicated ever since. Agencies grew by adding layers; the science says each layer subtracts. Ten senior people working directly will out-produce twenty people who spend their weeks in status meetings, and it isn’t close.

Trust is the deciding factor. Edelman’s Trust Barometer has tracked consumer behaviour for years, and the trend is consistent: trust is now the top factor in purchase decisions - ahead of price, ahead of quality. And trust is the one thing only a tribe can build. Generosity creates it. Overhead destroys it. A client who watches 40% of their retainer disappear into internal meetings does not trust the agency. A client who sees every dollar become work does.

That last point is why the tribe isn’t just nice. It’s the rational strategy.

The Report-Building Problem

Here’s a concrete example. In every digital marketing agency I’ve worked in over the last 20+ years, the monthly reporting ritual went like this:

Five to six hours of pulling data into a slide deck
An account manager reviewing it, rewording the commentary, and dropping in the brand template
Another hour of internal review before the client sees it
A one-hour meeting to present the report
Follow-up emails to “circle back” on anything that came up

That’s roughly ten hours of paid labour per client, per month, before any actual SEO work happens. Multiply by a book of 30 clients and an agency is burning 300 hours a month talking about the work instead of doing it.

In hyper-competitive industries like gambling, forex, insurance, and trades, you can’t afford that trade-off. Every hour spent on reports is an hour your competitor spent on links, on pages, on fixing technical issues. The work moves rankings. The meetings move nothing.

What We Built Instead

At Underdog Digital, clients log into their own dashboard. Reporting is live. They see rankings, traffic, the work we’ve done, the links we’ve landed, the pages we’ve optimised, as it happens. No deck. No Tuesday sync. No account manager between them and the data.

That one decision alone saves roughly 8 hours per client per month. Multiply that across a client base and it’s the equivalent of two full-time staff members. Except those staff members would have cost superannuation, holidays, a desk, a laptop, and Slack licences. Instead, the time goes straight back into the actual work: technical audits, content, link acquisition, CRO.

This is what a tribe looks like in practice. Trust in your marketing - and stop paying for the pageantry around it.

The Seth Godin Point

Seth Godin wrote the line in This Is Marketing: “People like us do things like this.” It’s his point about belonging - people don’t buy from brands, they buy into groups. The best marketing makes the customer feel like one of us, not like a target.

And in the same book he gives the deeper definition: marketing is the generous act of helping someone solve a problem. Those two ideas are the same idea. A tribe that serves its people generously is doing marketing properly. A machine that treats people as a pipeline is doing the opposite.

Three more things from the book matter here.

Minimum viable audience. The book argues you should aim for the smallest group that can sustain you, not the biggest one you can shout at. That’s a generosity strategy: you can’t be generous to everyone, so pick the people you can genuinely help and serve them properly. A lean agency is the minimum viable audience applied to the other side of the table - fewer clients, deeper work, real outcomes.

“You can’t be seen until you learn to see.” It’s the book’s subtitle, and it’s the sharpest line in it. Seeing the client’s problem clearly - that’s the generous act. The bloated agency doesn’t need to see you. It needs to bill you.

What Godin is pointing at (and what most agencies missed) is that the craft is the part that actually lasts. Spreadsheets, project management software, AI tooling, none of that is the product. The product is: can you help this business move attention and turn it into revenue. Anything else an agency sells is theatre - and theatre is the opposite of a generous act.

What the Research Says About AI

AI doesn’t change the tribe argument. It sharpens it.

David Autor’s task model - laid out in his paper Why Are There Still So Many Jobs? - showed that automation doesn’t simply replace human labour. It takes the routine tasks and leaves, and pays more for, the non-routine judgment around them. The bank teller example is the classic case: ATMs automated counting money, so tellers spent their time talking to customers, and that skill got more valuable.

AI is doing the same thing to agencies. The routine parts of the job - report building, data pulling, first drafts, admin - are being automated. The judgment parts - strategy, taste, knowing what to build and what to kill - are appreciating. Bloated agencies are still charging premium rates for the first category. Lean agencies sell only the second.

We mapped the full framework in The Non-Bloated Agency Hack - which skills AI devalues, which it inflates, and why the market hasn’t repriced any of it yet. The short version: the generous act is also the AI-proof act.

Who Dies, Who Survives

Here’s the prediction for the next 24 months:

Dies: Large, bloated, multi-office agencies charging five-figure retainers for junior execution wrapped in senior-sounding account management. Anything where more than 40% of the retainer is absorbed by overhead before work starts. Anything with a “client services” team larger than the delivery team.

Survives: Small, senior operators with 15 to 20+ years of domain experience, backed by AI tooling, running tight systems, with fewer clients and deeper outcomes. Not solo freelancers. Not 200-person shops. The 2 to 10 person operator that looks more like a specialist consultancy than a traditional agency. The model works - the results are public.

The survivors are tribes. The dead are machines.

That’s not a hot take. That’s just how industries restructure when their cost base gets disrupted. It happened to travel agents. It happened to taxi companies. Digital marketing agencies are next.

This Isn’t Anti-Staff. It’s Anti-Bloat

To be clear: AI-leveraged agencies aren’t staff-free. We have people. Good people. People who’ve done SEO for two decades and can tell you within 20 minutes whether your site has a ranking problem, a technical problem, a content problem, or all three.

What we don’t have is a layer of people whose job is managing the communication between you and the people doing the work. That’s the bit AI and good systems have killed. And it’s the bit that’s been inflating agency retainers for years.

We also don’t have:

Five layers of approval for changes
A “traffic manager” assigning tasks
Monthly “strategy” sessions that rehash last month’s strategy
PowerPoint decks dressed up as deliverables

What we do have: a dashboard that shows the work, a senior operator running the work, AI tooling doing the parts AI is genuinely better at (data synthesis, draft generation, rank tracking, anomaly detection), and humans doing the parts that actually require judgment. Curious what that tooling actually costs? Run the numbers yourself instead of taking an agency’s word for it.

Frequently Asked Questions

What does “people like us do things like this” mean?

It’s Seth Godin’s line from his book This Is Marketing, and it’s about belonging. People don’t buy from brands, they buy into groups they identify with - and they behave the way the group behaves. Applied to agencies: a lean agency is a tribe with a clear identity and a way of working. A bloated agency is a machine with a target market and an org chart. Tribes earn trust. Machines bill for it.

What does “marketing is a generous act” actually mean?

It’s Seth Godin’s definition of marketing from his book This Is Marketing: the generous act of helping someone solve a problem. Demand has to be created, attention has to be earned, products don’t sell themselves. What changes over time is who does the marketing and how. The phrase signals a belief that marketing’s job is to help, not to perform. In 2026, helping means operators who use AI and systems to do the work, not agencies that use meetings and account managers to talk about the work.

Why are large marketing agencies struggling in the AI era?

Large agencies carry overhead that smaller AI-powered operators don’t: account managers, bookkeepers, office space, superannuation, staff holidays, project managers, internal meetings. All of that overhead gets passed to the client as a retainer. The research is unforgiving - Hamel and Zanini put the cost of bureaucracy at over $3 trillion a year in the US alone, and the Ringelmann effect shows individual output drops as teams grow. When a two-person agency with AI tooling delivers the same SEO or content output in a third of the time at a quarter of the price, the bloated model stops making economic sense.

Does Underdog Digital use AI to replace people?

No. We use AI to replace the parts of agency life that don’t produce results: status meetings, manual report building, account management layers, reformatting the same deck for every client. The actual work (strategy, writing, technical SEO, link acquisition) is done by people with 20+ years of experience.

What’s the Seth Godin reference about?

Seth Godin wrote in This Is Marketing that marketing is the generous act of helping someone solve a problem - and that “people like us do things like this.” The generous act is the work that actually moves a client forward. The bloat around it - reports, meetings, account manager layers - is the opposite of generosity. It’s billing for theatre. The craft stays. The delivery mechanism (agencies, retainers, reports) is what’s being rebuilt.

How does Underdog Digital avoid the agency bloat problem?

We built a client dashboard that shows live reporting. No five-hour report build, no account manager walking through slides. A small team of senior operators backed by AI tooling. No retainers that exist to cover overhead. Clients pay for the work and the outcome, not the office space and the Tuesday sync.

Is the AI-powered agency model sustainable long-term?

Yes, because the economics favour it. A lean operator with AI doing the heavy lifting can take on fewer clients, deliver deeper work, and charge fairly while keeping margins healthy. The bloated model needed scale to support its own overhead. The lean model doesn’t. That’s a structural advantage, not a trend.

The Bottom Line

People like us do things like this. The bloat does not.

Not retainers. Not agency overhead. Not the idea that five layers of client services is what “professional” looks like.

The research is on the side of the tribes: bureaucracy is a tax, bigger teams get less per person, and trust - which only a tribe can build - decides who gets bought. The next decade of digital marketing will be won by operators who respect the craft, use AI to strip out the bloat, and actually ship the work instead of talking about it.

Want to see what the tribe looks like in practice? Get a teardown. We’ll show you what’s actually moving your rankings, what’s wasting your spend, and where AI leverage would save you a number that’ll probably make your current agency’s retainer look absurd.

People like us do things like this. Machines don’t.

Why the Bloated Agency Is a Dead Model