Artificial intelligence is putting pressure on the time-based billing model used by many agencies, as tools increasingly cut the hours required for content production, campaign builds, reporting, media optimisation and first-draft creative.
According to the article, AI can reduce the time needed for some tasks by half or more without reducing output quality. That creates a problem for agencies whose fees are calculated from logged hours and rate cards: faster delivery can directly reduce revenue, even when the value delivered to the client improves.
One example cited is a monthly content and reporting retainer that previously required nearly 40 hours of work. With AI supporting drafting, data analysis and project structure, the same standard of work can now take about 18 hours or less. The article argues that the client’s needs have not declined, while human teams can spend more time on judgement and refinement.
The proposed alternative is to base fees on scope, outcomes or value rather than hours. Brave Group is rebuilding parts of its business around that approach, according to the article.
It also encourages marketers to ask agencies what happens to account revenue when recurring work is completed in half the time. The answer, it argues, can reveal whether the relationship is focused on outcomes or hours.
Source: Zawya
