Pseudo-experts and AI dumping: Why the traditional consulting market is imploding

The era of adaptation is over – welcome to the age of reinvention.

We are at a critical turning point in the digital economy. What many service providers, agencies, and consulting firms are currently experiencing is not a temporary market downturn or a mere cyclical dip. It is the seismic sound of fundamental business models collapsing under the weight of technological disruption and altered market mechanisms.

For years, search engine optimization (SEO), organic social media reach, and broad consulting approaches were considered the indestructible pillars of value creation. But the reality of 2025 paints a brutal picture: Google AI Overviews make clicks obsolete, social media platforms have almost completely monetized their organic reach, and a flood of AI-powered pseudo-experts is driving down both prices and quality standards.

Anyone still trying to win with yesterday's strategies – be it through volume, minimal discounts, or clinging to dying channels – is inevitably maneuvering themselves into a "race to the bottom." The old equation "more services = more revenue" no longer holds true. Instead, integrity and genuine expertise are becoming the most valuable currencies in a market that is increasingly losing its bearings.

The following analysis is not merely an assessment of the crisis, but a strategic manifesto for a way out. It unflinchingly illuminates why reducing the service portfolio is not a step backward, but a vital evolutionary step. Learn why we must move away from input-oriented services and how specialization, coupled with a value-and-outcome partnership structure, represents the only way to preserve genuine, human value creation in a world of artificial intelligence and synthetic content.

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How the erosion of genuine value creation is forcing a paradigm shift

The speed at which fundamental business models are becoming obsolete is unprecedented in modern economic history. What was considered a secure, long-term value chain two decades ago is now an outdated approach. The digital revolution has evolved from a technological disruption to an existential threat to any business model based on yesterday's assumptions. This affects not just individual technologies or marketing channels, but the entire economic foundation upon which traditional consulting firms, agencies, and specialized service providers have built.

What we are currently witnessing is not simply change, but a systematic collapse of entire business sectors. Companies are losing massive portions of their organic reach, their former core competencies are being replaced by artificial intelligence, and competition is increasingly dominated by pseudo-experts who make it nearly impossible to distinguish genuine expertise from superficial knowledge. In this situation, innovative service companies face a critical decision: either adapt, restructure, and focus on genuine value creation, or be swept away in the maelstrom of price wars.

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The following analysis sheds light on the structural causes of this development and explains why leading service providers increasingly need to reduce their range of services in order to maintain integrity, profitability and strategic relevance.

The collapse of the classic search engine economy: From SEO to AI search

For over two decades, search engine optimization (SEO) has been the backbone of digital marketing strategies. Companies invested millions in SEO to generate organic reach and secure traffic. This era isn't ending gradually—it's ending exponentially.

The reality is clearer than any prediction: Between January and September 2025, leading media sites and online platforms experienced losses of 40 to 80 percent of their organic traffic. HubSpot, long positioned as an SEO benchmark, lost between 70 and 80 percent of its organic traffic. CNN saw declines of between 27 and 38 percent. These are not outliers—they are systematic symptoms of a fundamental shift in the search economy.

The reason lies in a technology that is changing the entire game: Google AI Overviews. These AI-powered summaries now appear in about 13 percent of all Google searches, with a growth rate projected to reach 20 to 25 percent by the end of 2025. When AI Overviews are present, click-through rates plummet from an average of 1.41 percent to a meager 0.64 percent—a reduction of 55 percent. Even search queries without AI Overviews show massive declines. Compared to June 2024, organic click-through rates have fallen by 41 percent overall.

The paradigm has shifted radically. SEO used to be a game where high-quality content was combined with technical optimization to improve rankings. Today, rankings have become almost irrelevant. A company can rank number one and still receive no traffic because the AI ​​summary has already answered the question—directly in the search results. Clicks are no longer necessary.

This is a structural, not a cyclical, problem. While Google processes between 9.1 and 13.6 billion search queries daily, an ever-increasing proportion of these queries result in zero clicks. Approximately 60 percent of all search queries do not lead to clicks on websites. Search engine traffic, once the lifeblood of digital business models, is evaporating.

The consequences for agencies and SEO specialists are immediate and devastating. Clients are rightfully asking: Why should I pay for SEO services when the search engine itself provides the answers? This doesn't lead to price reductions, but rather to the removal of these services from the portfolios of providers who want to protect their brand and integrity. An honest SEO agency that is still investing heavily in classic SEO campaigns in 2025 is not acting in the client's best interest. It is selling a solution to a problem that is systematically shrinking.

The emerging alternative – Generative Engine Optimization (GEO) – promises to make SEO relevant in a new context. However, it quickly becomes clear that GEO is not simply the next iteration of SEO. It requires entirely different skills, different content strategies, and different metrics. It's not just an add-on, but a redesign of the fundamental marketing architecture. Agencies that attempt to position SEO and GEO in parallel are obscuring the reality: For most clients, the ROI potential of traditional SEO is now limited.

The paid visibility trap: How social media systematically stifles its organic reach

When SEO collapses as a channel, many companies turn to the next supposed miracle cure: social media. But here, too, it quickly becomes apparent that social media platforms have long since abandoned their organic reach as a business model. They have transformed into purely paid visibility systems.

The figures are clear and humbling for companies hoping for “organic reach” through social media. On Facebook, organic reach averages 1.37 percent of followers. This means that if a company has 10,000 followers, an organic post reaches approximately 137 people. Instagram shows similar dynamics, with organic reach between 4 and 6 percent – ​​and even then, only under optimal conditions. LinkedIn, positioned as a platform for B2B marketing, delivers an average reach of 6.4 percent for regular posts and a mere 2 percent for company pages. TikTok, long celebrated as the platform with the highest organic reach, has halved it from 24 percent to 10 percent in two years.

This isn't a problem of content quality or a lack of expertise among marketing professionals. The erosion of organic reach is a structural feature of the business model of social media platforms. The more a company relies on organic reach, the more it becomes a free content engine for platforms that have no economic incentive to increase that reach. On the contrary, limited organic reach drives companies into the arms of the platforms' paid offerings.

This became clear at an interesting moment: When P&G, the company with the largest advertising spend worldwide, shut down $200 million of its digital advertising, sales remained unchanged. The experiment points to an uncomfortable truth: Massive social media campaigns are not essential for revenue growth. Nevertheless, marketing budgets remain unchanged and heavily invested in paid social media promotion, while genuine organic reach has become a myth.

For agencies that have built their business models around social media marketing, this is an existential threat. Traditional social media services—the strategic development of social media presence, the planning of organic content calendars, and consulting on engagement optimization—lose their economic relevance when organic reach disappears. The reality is: if a company wants to be visible on social media, it pays for that visibility. There is no "clever hack," no "secret algorithm." There is only payment or irrelevance.

The consequence is a moral promise that agencies cannot fulfill: If they promise a client that “great content” will lead to organic reach, they are promising something that the platforms systematically prevent. An honest agency will therefore redefine its social media services – not as reach generation, but as paid campaign management, or not offer them at all, because the economic added value is too limited.

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The decline of strategic marketing: When price discounts replace strategy

Marketing has undergone a fundamental transformation that has less to do with innovation than with degeneration. Where marketing was once understood as a strategic discipline – positioning, differentiation, and value articulation – today price discounts and constant promotions dominate, resulting in a race to the bottom in which differentiation is replaced by lower prices.

Look at the cosmetics and dietary supplement industries: These sectors no longer define their campaigns through innovation, quality, or value propositions. They define them through permanent price reductions. “30 percent off,” “Buy one, pay for two,” “Flash sales.” These tactics aren't marketing strategies—they're emergency measures when genuine differentiation no longer works.

The phenomenon is just as prevalent in the B2B world. The consulting industry, long a bastion of premium positioning, is experiencing an existential crisis. McKinsey, Bain, and Deloitte—the classic “Big Three” of management consulting—are withdrawing thousands of consultants. The cause is not a cyclical downturn, but a structural shift: when an AI platform delivers a market entry analysis in minutes that previously required weeks of human consultation, the premium business model of these firms implodes.

At the same time, the consulting industry is fragmenting into hundreds of “experts,” “consultants,” and “specialists.” These individuals are often not experts at all, but rather users of AI tools with superficial knowledge of their field. However, they can offer lower prices because their cost base is reduced by AI tools. The result: competition that is not based on genuine expertise, but on price reductions and tool-based automation.

The consulting industry is facing a fork in the road: On one side are the large, established firms with extensive resources. On the other are hundreds of smaller and medium-sized boutique consultancies, often founded by former McKinsey or Bain partners, offering more agile and affordable services. Both sides are competing on price, not value. The middle ground—where genuine, well-founded, specialized consulting takes place—is being squeezed.

The global digital transformation consulting market is growing nominally – from approximately USD 268 billion in 2025 to a projected USD 548 billion by 2035. However, this nominal growth masks an inconvenient truth: the price per consulting hour is falling, margins are shrinking, and the need to react to price is increasing. What is statistically counted as “growth” is often simply volume scaling with declining profits.

The traditional "race to the bottom" in pricing follows a compelling logic: if one competitor lowers prices, others follow suit to avoid losing market share. But this isn't simply a tactical problem. It's a strategic signal that the industry lacks genuine differentiation options. If everyone offers "the same service"—or if customers don't understand why differences exist—then price remains the only distinguishing factor.

For service providers who want to protect their reputation and margins, this is a clear message: If you don't move into a segment where genuine differentiation is possible, you'll be drawn into a price war. And price wars are an existential threat to service providers. Their profit margin is already thin. A ten percent price reduction doesn't mean ten percent less profit—it means 30, 40, or even 50 percent less profit.

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The pseudo-expert swamp: How the erosion of genuine expertise is becoming a competitive nightmare

What makes the current situation particularly complex is not only that channels are becoming obsolete and price pressure is increasing. It is also a deeper erosion of expertise itself. The consulting industry is increasingly populated by people who are indistinguishable from genuine experts – by clients who lack in-depth knowledge of the subject matter.

The reason lies in the convergence of several trends. First, access to information has been democratized. A person who completed an online course in “AI and Business” two weeks ago can position themselves as an “AI strategy consultant.” The difference in information between them and a genuine AI expert with ten years of experience is not absolute, but gradual – and difficult for clients without real expertise to discern.

Secondly, AI tools have dramatically reduced the cost of consulting. A consultant using ChatGPT and Perplexity can quickly generate analyses, marketing plans, and business scenarios that appear superficially sound. The average client won't realize that these were generated by AI and possess fundamentally limited nuance or genuine strategic depth.

Thirdly, the industry itself has supported this dynamic. The trend towards so-called "skill-based hiring"—that is, recruiting people based on proven skills (solely on the basis of visible success metrics such as kills, rankings, scores, "hard stats") rather than formal degrees or mere years of professional experience—leads to large consulting firms hiring hundreds of new "experts" without classic project experience and immediately deploying them in client projects.

The result: The consulting industry becomes a quagmire where genuine experts and users, advanced users and true beginners, are no longer distinguishable. The market cannot differentiate. Therefore, competition reverts to price.

This is an existential crisis for a true expert. The value of genuine expertise is no longer discernible in this dynamic. A person with 15 years of solid experience in, say, supply chain optimization is competing against hundreds of "supply chain consultants" who started out from something else two years ago. The established expert cannot simply use their experience as a selling point – because the market doesn't see the difference.

The only solution is not to compete with the quagmire, but to leave it. This means focusing on niches where genuine expertise is evident and cannot be easily replicated. Or: building entirely different service models where value doesn't depend on "consulting hours," but on a clearly defined value-and-outcome partnership structure between provider and customer.

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The Devil's Pact Spiral: When content focus is replaced by price focus

This leads to a seemingly contradictory phenomenon: While "Content is King" is preached everywhere, almost all content-based strategies are subject to the same phenomenon of erosion. Content marketing, in theory, should be the way to demonstrate genuine expertise and build trust. But reality shows that content as a means of differentiation has long since slipped into mass production.

The consequence is widespread: content is being produced ever more cheaply. Not because of improved efficiency, but because expectations are falling. A 10,000-word research article that requires 40 hours of specialist work is now produced in three hours using AI tools – with significant losses in quality that go unnoticed by the average content consumer.

Marketing campaigns increasingly follow a simple formula: produce lots of content, offer lots of discounts, and hope that conversions will increase. This isn't marketing—it's brute-force spam with better design. And it's fatal for agencies trying to deliver real strategic value.

The reason: Customers don't learn to distinguish genuine quality from inferior products when both are advertised with similar discounts. Instead, they learn to respond to price, not value. This is a classic "race to the bottom" dynamic. The more agencies define their campaigns around discounts—not innovation or differentiation—the more customers are trained to be discount hunters.

The fundamental problem: exploitation over exploration, profits over innovation.

At the heart of all these phenomena lies a strategic problem that extends far beyond individual channels or tactics. It is a fundamental conflict of objectives between short-term profit-seeking and long-term value creation. In organizational research, this is often described as the “exploitation vs. exploration” dilemma.

Exploitation means extracting maximum efficiency from existing resources, processes, and knowledge. It means replicating, scaling, and optimizing proven models. It is profitable and tangible in the short term.

Exploration means investing in new technologies, new markets, and new skills. It means questioning established processes and trying radically new things. It is risky, costly, and offers no guaranteed returns.

Most industries and companies that pursued aggressive growth targets over the past five years have drastically reduced exploration in favor of exploitation. They optimized their existing business models, cut costs, and sold at discounts. This led to short-term profits.

But the world changed faster than expected. SEO became obsolete. Organic reach was stifled. Price pressure intensified. And these companies slowly realized that their "optimized" models no longer worked in a new reality. They had invested everything in exploitation and had no reserves left for exploration.

At the same time, companies and agencies attempting genuine exploration are evaluated using traditional metrics: margin, cost per lead, return on advertising spend. These metrics have been optimized for exploitation. They penalize exploration, which by definition is risky and offers lower immediate returns.

The result is a vicious cycle: agencies need to make money with their existing business, so they focus on exploitation. Rapid technological changes undermine their existing business. They lose clients to cheaper competitors. Their margins shrink. They have fewer and fewer resources to explore new approaches. They become less able to innovate.

This is precisely the spiral that many of the “innovative” digital agencies and marketing service providers have fallen into over the last three to five years. They talked about innovation and transformation, but their business models were purely focused on exploitation – on maximizing the efficiency of existing (and becoming obsolete) channels.

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The ethical and economic incompatibility: Why genuine service providers must choose

This leads to a key insight that many business development professionals find uncomfortable: It is no longer possible to have a universal service portfolio that is both ethically acceptable and profitable.

If a service provider knows that SEO services will have a marginal ROI for most clients by 2025, and still offers them, then they are optimizing for their own revenue, not for the client's success. This isn't simply a tactical decision—it's a moral failing.

If an agency knows that “organic social media” strategies only lead to 1-4 percent reach, and still presents them as the primary strategy (instead of immediately switching to paid campaigns), then it is selling an illusion.

If consultants base their fees on price rather than value – because they have not invested in the specialized expertise that allows for real value differentiation – then they are competing on the wrong level.

The logical consequence for a service provider that wants to protect its reputation and deliver genuine added value is: a radical reduction of its service portfolio. Not to earn less, but to earn more – through focus, specialization, and real expertise instead of brute-force volume.

This isn't immediately obvious to many. Classic business logic states: More services = More customers = More revenue. But this logic assumes that all services are of equal value and that revenue is synonymous with profit and long-term value.

The reality is different: More services = more overhead, more complexity, less specialization, less perceptible value for customers, more price pressure.

The next level: Why specialized innovation is the only rational strategy

For service providers who want to survive and thrive in the transformation, there is only one rational strategy: radically specialize and simultaneously invest in genuine innovation for that specialization.

This doesn't mean doing "just one thing." It means focusing on domains where genuine, recognizable, and difficult-to-replicate expertise makes a measurable difference. And then aggressively investing in new technologies, new methods, and new frameworks for that specialization.

For example, instead of offering “digital marketing for all industries,” an agency could specialize in “AI-powered demand generation for B2B SaaS companies with $50-$500 million in annual revenue.” They could then:

• Build in-depth industry knowledge (how buying cycles work, which pain points are acute, etc.)
• Collect proprietary data and insights (e.g., which message converts for which persona types?)
• Build technology stacks that function optimally for this specialization
• Developing a brand recognition value where customers say: “This is the best provider for my problem”

In this position, price is no longer a primary competitive variable. The customer isn't buying "digital marketing services." They're buying the best solution to their demand generation problem. This is a completely different positioning.

The price can be higher because the recognized value is higher. The margin is higher. And – most importantly – the resources for exploration and innovation are in place to remain relevant when the next technological shift comes.

The systemic problem: Why a competition consisting of 20-30% pseudo-experts leads to collapse

The current situation in many service industries is exacerbated by a specific structural problem: a competitive environment in which 20 to 30 percent of providers are “experts”, while the remaining 70-80 percent are pseudo-experts, users, or simply marketers pretending to have expertise.

This isn't new. Every industry with low barriers to entry develops this dynamic. But in consulting, marketing, and tech services, this is particularly pronounced because two factors converge:

• First, information is cheap and democratized. Anyone can say “I am an AI Strategy Consultant” without any substantial qualifications being verified. The antidote—reputation and portfolio—is quickly built up through large numbers of low-cost projects.
• Secondly, AI tools have lowered the barrier to entry even further. A person with average skills can use AI tools to generate output that looks “good enough” to 70 percent of customers.

The result is a competition where genuine expertise goes unrecognized and therefore unrewarded. The market cannot distinguish between the top 20% expert and the 70% pseudo-expert who sounds impressive. Therefore, both are judged solely on price.

And in a price-based competition, the one with the lowest costs wins. This is almost always the pseudo-experts, because their overhead is lower – they haven't built up an extensive infrastructure of specialization.

For true experts, this is a dead end. They can't simply "acquire more clients" because they are always more expensive than the pseudo-experts. They can't "scale up" because scaling would undermine their specialization and quality. They are trapped.

The only rational answer is: Don't compete in this field. Don't try to be "a little different from the other experts." Instead, create a completely different category where expertise is undisputed and price isn't the primary variable.

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The strategic empire: From performance to results

The deeper adaptation for service providers who want to survive this transformation is not a tactical one – but a fundamental one: the shift from service-based pricing to a value-and-outcome partnership structure.

The traditional service industry bills for hours, projects, retainers, and engagements. Everything is based on input: How much time does the service provider invest? How many person-days are required?

This leads to perverse incentives. The service provider is incentivized to sell longer engagements (not because they are better, but because they are more expensive). The customer is incentivized to minimize the engagement length. It's a zero-sum game. What one gains, the other loses.

Value-based pricing reverses this. The service provider is paid based on the economic value they create for the customer – not on hours or resources used. A strategy consultant is not paid a daily fee, but rather based on the revenue growth or cost reduction they enable. A transformation partner is measured by the long-term success of the customer, not by short-term performance metrics.

This has several advantages:

• First: The incentives are aligned. The service provider earns more when the customer actually extracts value. Therefore, the service provider is incentivized to think strategically, not to work tactically and bill for services.
• Secondly, the customer doesn't pay for input (time), but for proven value. This is a more transparent business relationship based on mutual success, not resource consumption.
• Thirdly, competition is automatically shifted to a higher level. In a value-based model, pseudo-experts cannot compete. They lack the ability to identify genuine sources of value, nor the methods to deliver sustainable improvements. Only true strategists can.
• Fourth: A service provider offering value-based and outcome-oriented models can charge premium prices because the customer factors in the full value potential. If a consultant says, “We will increase your operational efficiency by 30%,” the customer can calculate: That's worth X million to me, therefore I'm willing to pay Y. The customer isn't investing in hours, but in value creation.

The transition to value-and-partnership models is not easy. It requires:

• Deep understanding of customer economics and business drivers
• Proprietary methods and strategic infrastructure
• Consistent ability to generate demonstrable value effects
• Willingness to commit to long-term partnerships, not project-based engagements

But these very requirements act as a filter, eliminating pseudo-experts. Only specialized, strategically focused, innovation-driven service providers can manage this transition.

And those who can, enter a completely different competitive universe – one where price is not the primary variable and genuine strategic expertise is rewarded for customer success.

The finale: Why reducing the service portfolio is a win-win

This leads to the final conclusion: The deliberate reduction of the service portfolio is not a concession to weaker businesses. It is an offensive strategic move.

A service provider who says, “We no longer offer classic SEO services” or “We no longer offer hourly consulting,” is making several statements at once:

• I understand the reality of my market and I am ready to adapt.
• I respect my customers enough not to sell them outdated solutions.
• I focus on specialization and real value creation, not on volume.
• I am prepared to compete for success, not for cheap resource allocation.

Announcing this has several positive effects:

• Firstly, they attract the right customers – those who value quality over price, who want to invest in genuine expertise, who are looking for strategic partners, not interchangeable services.
• Secondly, they are alienating the wrong customers – those who treat services like a commodity, who only respond to price, who want to minimize costs instead of maximizing value.
• Thirdly: You simplify your operations. With fewer services, your infrastructure is leaner, your specialization deeper, your strategic expertise more focused.
• Fourth: They signal confidence in the market. A service provider that reduces its portfolio sends a strong signal: I am so convinced of my expertise in my core services that I can leave everything else out.

Redesigning Business Value in a Dynamic World

We are at a moment of redefinition of what "value creation" means. The old channels – SEO, organic social media, classic content marketing – are proving to be structurally obsolete or degraded into a pure volume game. The old competition – service providers with broad portfolios competing on price – is being systematically crushed.

The only sustainable strategy for service providers is: specialization, innovation, and value-based partnership models.

This requires the courage to eliminate services that generate revenue but don't create real value. It requires the willingness to serve smaller customer segments more deeply instead of superficially serving large segments. It requires continuous innovation not in tactics, but in strategic approach and value definition.

But the reward is substantial: a business based on real, measurable value, not on arbitrage between customer expectations and reality. A business with higher margins and better profitability. A business that will still be relevant in 2026, 2027, and 2030.

This isn't less marketing or less business development – ​​it's a smarter, more informed, future-focused form of it. And it's the only strategy that works in the long run in this age of continuous disruption.

Industry focus: B2B, digitalization (from AI to XR), mechanical engineering, logistics, renewable energies and industry

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