Artificial intelligence (AI) is changing marketers and the agencies they work with. While improved data gathering, processing, and analysis is making targeting faster, easier, cheaper, and more effective, generative AI is becoming increasingly useful for copywriting, image creation, and editing. Together, these things are changing the way that your teams spend their time, how they work, and how much time they need to spend on each client. That’s a good thing, right? But maybe not if you charge by the hour.
The traditional agency pricing model is desperately outdated, and AI is forcing a long overdue change.
Why hourly pricing has to go
Marketing agencies have almost always billed by the hour. And it’s kind of worked. But when your billable hours are being slashed by AI but you still have the same overheads to meet, you find yourself in a conundrum. You can’t just charge your clients less, especially if your results keep improving. In fact, MIT estimates that generative AI can improve a highly skilled worker’s performance by 40%. But equally, at a time when transparency is almost everything, you can’t lie about the time that you’re spending on each task. So, what’s the solution? It can only be to change the way that you charge for your work. And that means a focus on deliverables or outcomes.
