Will “AI efficiencies” finally force agencies to change how they bill?

We’re reliant on billable hours, and if AI actually delivers what it promises and increases efficiencies that means there’s going to be fewer hours to bill. Lay off however many people you want, but the agency is still going to be billing fewer hours and not making as much money.

Does any shop have a robust enough new business model to match that? Is there even that much work out there?

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I feel with more efficiencies it's just as likely if not more that they instead promise more deliverables

likesmart

Feel like we can promise whatever, but will the client buy any of it? We try to sell extra stuff all the time and clients are always tied to their media plans among other things. Would a client want more if they have no place to put it?

And even if we sell more, can we really sell in enough to make up for lost billable hours?

I do think we need to start moving to a flat fee model with a premium placed on big ideas, platforms, and highly successful work. It blows my mind every time we let a client pay us for two months of hours when they’re asking for a multi-year creative platform.

However, if AI has saved us any real time, I’ve yet to see it. Sure we can comp faster, but all that means is we make more of them.

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Even when I was a little kid, I questioned the sensibility of being compensated based on the hourly metric. Work slower, get paid more; inefficiency is rewarded. When I first opened my studio in the '90s, I loathed the idea of a day rate, and tried to convert to a structure built around the complexity of each job whenever I could. I paid my team members by the job, too; the sooner they satisfactorily completed their pieces, the sooner they could get the top-shelf drinks at happy hour. Maybe AI is telling us it's time to re-engineer the payment structure for this part of the industry too.

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I’m sure they’re charging (rippling clients off) for their AI services.

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They’re not about to lose billable hours. They’ll simply promise MORE within the same window. It’s never about better. It’s always more and can it be faster, please.

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