AI and the phasing out of time-based pricing for marketing agencies

Time/effort-based pricing has dominated in marketing agencies for decades. As the established norm, it's the accepted standard of billing for almost every project type. Agencies have continued to use it because it's easy, but there's an unexpected problem on the near horizon. Artificial intelligence (AI) is changing the way we work, and it holds the potential to fundamentally disrupt not only how agency tasks are performed but how we bill for them.

The problem of time/effort-based pricing
AI may not yet be ubiquitous within marketing agencies, but with its prowess increasing across a whole range of common business processes - research, data analysis, editing, ideation, copywriting - it's already saving agencies time and effort. While this is an undeniably positive thing, it carries unavoidable implications for pricing. Because if you charge for the time your employees spend on your clients and AI reduces the amount of time that goes into each project, it stands to reason that the time you bill for will also have to be reduced, and that can't help but impact your margins.

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