The economics of communications are being dismantled. Here is what replaces them.

In the next budget round, a CFO will ask a head of communications a simple question. If AI can now produce most of what your team makes, what exactly am I paying for?

Most functions will answer with what they do: the campaigns they run, the coverage they earn, the content they produce, the audiences they reach. For twenty years, that answer held because producing communications was expensive and activity stood in for value. That link is breaking. A release, a speech or a version for every market now takes a fraction of the time it once did, and research increasingly shows professionals working faster with AI, sometimes producing better results too. A function that defends its value through activity is defending the part of its work that is losing value fastest.

The usual measures do not rescue it. Reach, sentiment, share of voice and reputation scores tell you something, but none shows what communications contributes to growth or company value. A chart that lines up reputation with sales after the fact cannot show which one drove the other. It is the oldest slide in the deck, and most CFOs have learned to skip it.

A fundamental rethink of what communications can and should deliver is coming, whether the industry likes it or not. Technology, extreme global volatility and a renewed focus on cost and return on investment make it inescapable.

The agency side of the industry is already feeling it, and it is the canary in the coal mine. The average operating profit of North American PR firms fell from 18.6 percent in 2023 to 15.3 percent in 2025, according to the annual Gould+Partners benchmark. In advertising, Omnicom has retired DDB, FCB and MullenLowe, names that built the industry, after its takeover of IPG. Clients are no longer willing to pay yesterday’s price for work that AI can do in minutes. The point cannot be made more clearly than WPP made it this year: the group ‘will emerge as a simpler, lower-cost, AI-enabled business’, and is cutting £500 million a year from its costs by 2028. Behind those numbers are good people living through round after round of restructuring.

The same pressure now faces every communications function, and most leaders already feel it. In Edelman’s 2026 Future of Corporate Affairs research, 73 percent of leaders said their measurement approach misses the full value of their function, and 51 percent said they find it difficult to link their work to business performance. The contribution is real. The proof is missing.

The contribution is real. The proof is missing.

That gap is expensive, because much of what a company is worth now sits outside its recognised tangible assets. Ocean Tomo estimates that intangible assets accounted for about 92 percent of the market value of the S&P 500 at the end of 2025. Reputation is part of that value. In a study of UK financial regulators’ enforcement against listed companies, Oxford researchers found the fall in share price was nearly nine times the size of the fines. Boards understand numbers like that. Most communications functions still do not speak in them.

What replaces the old model is a function where AI handles production and people focus on the decisions that create value. Handing out the tools is the easy part. In a six-month experiment across 66 companies, researchers found that people using an AI assistant spent about two fewer hours a week on email, without significant changes to the quantity or composition of their work. The gains come when someone redesigns the work itself around four capabilities that matter more as AI takes over production.

The first is reading the field: knowing which regulator, government, community or investor could change the company’s course, and alerting leadership before they act. The second is earning trust in person. As machine-made content becomes endless and cheap, credibility built through human relationships becomes scarcer and more valuable. The third is making change land: leaders aligned on the strategy, and people who understand it well enough to change how they work. Most transformations are announced well and delivered badly. This is where they fail. The fourth is demonstrating value against outcomes the board already recognises: growth, cost, risk and what investors will pay for the company.

A function built that way creates, protects and captures value. It needs fewer people producing and more people deciding.

Communications leaders can start before the budget round forces the question. One question tells them a lot: can their CFO name one number the function moves? They should ask the CFO before giving their own answer. If the CFO cannot name one, or names a different one, the function is a cost line and will be managed as one.

The functions that act now get to redesign themselves on their own terms. The ones that wait will be redesigned through budget cuts, by people who never asked what the function was for.

So when the CFO and the rest of the board ask what exactly they are paying for, the answer that holds lies in the numbers they already track, and in the proof that communications moved them.

AJ Hesselink

Founder, Fox Meridian Advisory

Arent Jan (AJ) Hesselink is the founder of Fox Meridian Advisory. He spent ten years at Edelman, the world’s largest independent communications firm, most recently as President and CEO EMEA, after serving as COO EMEA and CEO of Edelman Netherlands. Before that he was CMO Asia Pacific and Global Transformation Leader at Philips. He began his career as a reporter and bureau chief for Dow Jones and The Wall Street Journal Europe.

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