In The Enterprise Shift, we looked at how AI-era clients are buying differently. This session picked up the agency side of that conversation: what buyers understand about your firm before they talk to you, how specific your positioning really is, and whether your value is clear from the outside.
James Rutherford, Automattic for Agencies General Manager, hosted the conversation. He was joined by James LePage, Head of AI at Automattic; Peter Kang, and Sei-Wook Kim, co-founders of Barrel Holdings.
Here’s what mattered.
A healthy agency can still be fragile
Sei-Wook Kim and Peter Kang evaluate agencies for acquisition through Barrel Holdings. One pattern they see often: an agency looks solid from the outside, but revenue is concentrated in one or two clients, and most new work comes through personal relationships.
As Sei-Wook put it: “There may be one or two clients that really make up a big proportion of revenue. There may not be a lot of consistency with when the next project is coming.”
That can feel like a durable business. It may be luck dressed up as a pipeline.
Peter described the risk plainly:
“You kind of string those [referrals] enough for enough years, you think, ‘All right, great, solid business.’ But of course, at some point, that kind of luck runs out. You can go from having pretty good years, looking good financially, to just having a disastrous period of time.”
Financials show what has already happened. Positioning determines whether the market knows when to choose you.
Broad positioning makes you harder to buy
Peter named a habit many agencies will recognize: “There’s an agency orientation. Most of the way the agency talks about themselves is from the perspective of what we do, what we care about, the craft, and the type of technology that we use.”
That language usually sounds reasonable inside the agency. You help growing brands. You create digital experiences. You combine strategy and delivery.
Buyers hear the same thing everywhere.
Sei-Wook was direct:
“It’s a little bit of everything and this agency does everything for everyone. That’s the common generalist pitfall.”
He also named why it happens. Agencies grow by saying yes. A client asks for something adjacent. A referral asks for something else. Over time, the firm becomes broader than anyone intended.
AI tools make that weakness more visible. When an assistant reads a generic agency website, it may summarize the firm as “a full-service digital agency,” indistinguishable from hundreds of others and unhelpful to a buyer looking for a specific fit.
Clear positioning gives buyers something to remember and AI systems something to act on.
AI discovery rewards specificity
James LePage explained how AI systems actually work:
“We haven’t in two years migrated to a new internet. These systems continue to rely on websites, search indexes, case studies, and third-party sources.”
The infrastructure is the same. The reading behavior has changed.
James described AI assistants running “10 or 100 specifically long-tail keyword searches,” using signals like location, industry experience, budget, service model, and evidence of similar work before recommending an agency name.
His read was direct: for digital businesses, this is no longer optional, especially as Google’s search experience changes alongside chatbot discovery.
For agencies with specific positioning, that can lead to better-fit inquiries. Sei-Wook described those leads this way: “It’s almost like they’ve come pre-vetted. By the time they reach out, they probably know a little bit more than nothing about you and they have a trusted source giving them that recommendation.”
Specific language makes your agency easier to match to the right opportunity. General language leaves you in a category.
Specialization takes longer than leaders want
Peter shared Barrel Holdings’ move toward CPG (Consumer Packaged Goods) and food and beverage work. The results took time: “The first three to six months, we just cared about the inputs.”
By month nine, CPG leads had grown from roughly 30% to 40–50% of the pipeline. Three years in: “Now 80% to 90% of the leads are CPG and food and beverage, and we’re getting to talk to some amazing brands every week.”
A second example showed what that commitment looks like at the point of acquisition. Barrel Holdings recently acquired a digital marketing agency focused on lead generation for water treatment companies. One market. One buyer. One outcome.
When Sei-Wook and Peter attended a water treatment industry conference, the demand was obvious. “There were hundreds of people looking for this service,” Peter said. “It’s like shooting fish in a barrel.”
The acquired agency was bought because that work had already been done.
Test your positioning
Sei-Wook offered a simple diagnostic: ask someone outside your agency to describe what you do in one sentence. Ask your team. Ask your clients. Compare the answers.
Then run the AI version. Paste your homepage URL into an AI assistant and ask it to describe your agency in one sentence. Save the response.
The Q&A surfaced a fair concern: AI results are shaped by personalization, search history, and the context a buyer brings into the tool. James LePage’s response was to treat that as part of the opportunity. AI discovery has more context than traditional search, which makes clear positioning more important.
Then ask the harder question: is that what you want to be known for?
James made the fix sound practical because it is:
“There’s no switch, no shadow web, no parallel web for AI visibility. It’s all using the same stuff under the hood.”
Clear positioning, specific proof, and credible external signals still determine the outcome. AI just reads them faster.
Research behind the conversation
The team behind this session is also behind the research. AgencyHabits and Automattic for Agencies are publishing a joint research report, the State of the AI-Native Agency, examining how agencies are adopting AI across WordPress agencies and what separates the agencies getting results from the ones still experimenting. Watch this space to get it when it’s out.
Watch the full session
The recap covers the sharpest moments, but a lot happened in between. If you want to hear the full conversation, including the Q&A, the recording is available on demand.
Watch the recording: Mind the Gaps: AI & Agency Positioning
Editor’s note: Since this fireside chat was recorded, James LePage has moved on from his role as Head of AI at Automattic. We’re grateful for his contributions to this conversation and wish him well in his next chapter.
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