As AI adoption gains momentum across industries, AI natives are not just changing the game — they are rewriting the rules.
No longer satisfied with merely adopting AI, forward-thinking businesses are weaving it into the very fabric of their operations. They treat it as a strategic cornerstone, enabling them to solve complex problems, unearth new market opportunities, and redefine the realms of possibility in their respective fields.
At these AI-native agencies, algorithms become embedded across operations, data, and decisions — transforming content production, business models, client relationships, and even the nature of value itself.
However, this evolution has implications that extend far beyond mere efficiency gains from automating tactical workflows. It’s disrupting the entire agency ecosystem, creating a dichotomy that puts traditional businesses at risk of obsolescence by not embracing the more agile, integrative approach of their AI-native competitors.
AI adoption is gaining momentum with marketing agencies as well as brands
The good news: These tools help agencies solve complex problems, become more responsive, and capitalize on emerging business opportunities.
The may-or-may-not-be-great news: The significant time savings means fewer billable hours.
Will it mean fewer of your marketing dollars heading out the door?
Not necessarily. But you might benefit in other ways, says Jon Reilly, founder and co-CEO of Akkio, which offers generative AI for analytics and predictive modeling for agency operations.
How your agencies use AI
AI tools also can enhance the relevance, quality, and personalization of agency-created communications and introduce greater efficiency into their operating processes.
For example, social media agencies that pair machine-learning sentiment analysis with process automation can more quickly identify and respond to emerging conversational trends, including negative comments, customer issues, and potential public relations disasters.
Public relations agencies also expect AI to speed up their processes. These tools can help optimize pitches, ensure SEO success for the articles they place, and understand and address journalist needs.
Most PR leaders (88%) say AI will have a positive impact on the speed and efficiency of specific tasks, and another 72% say it will help reduce workloads, according to a study by USC Annenberg Center for Public Relations and WE Communications.
All that speed and efficiency may not mean a discount
Working faster and delivering better results sounds like a win all around. But agencies are businesses. Delivering more and billing fewer hours make the picture less appealing to them.
That’s why Jon argues the hourly model needs a reimagining. He suggests agencies bill by a retainer model, project-based pricing, deliverable pricing, or successful outcomes.
Here’s why that’s not bad news for you: Value drives these billing models. Rather than scrutinizing the hours your agency teams bill for their inputs, you can analyze (and, therefore, justify) your costs based on the outcomes achieved.
Rather than scrutinizing the hours your agency teams bill for their inputs, you can analyze (and, therefore, justify) your costs based on the outcomes achieved.
You won’t necessarily pay less, but you should get more from your investment.
Why a successful-outcomes model works
Of all these options, the successful-outcomes model holds the most promise for successful brand-agency relationships, Jon says. But it’s probably the one you’re least familiar with.
The successful outcomes model is similar to a revenue-as-a-service (RaaS) agency’s pay-per-lead approach, in which clients pay a fixed price for each lead generated. These RaaS agencies don’t charge a retainer or bill by a percentage of ad spend. They only charge for the desired outcomes delivered — i.e., leads.
In this model, agencies stand to receive higher payouts when their efforts drive certain business goals that fall outside the scope of their contracted project work. For example, if the agency’s fee is based on the number of click-throughs their brand awareness campaign receives, the agreement might specify that the agency also receives 10% of any revenue lift directly generated by those assets or a performance bonus for hitting certain sales milestones for the project.
Jon says the beauty of this approach comes from the built-in alignment. By tying part of the fees charged to real-world business outcomes — revenue expansion, market share growth, or a blockbuster product launch — agency/client incentives become powerfully intertwined.
In a way, both sides share the risks and rewards. However, the core responsibilities still fall on the agency: They’ll only earn their bonus by delivering measurable value. Agency contributions must move the needle, not just fill hours.
Prioritize outcomes, not hours
Success-based fees incentivize the preferred behaviors on both sides of the brand-agency relationship. In Jon’s view, this model encourages agencies to use AI as a powerful amplifier — one that can help make client business easier for them to win and retain — rather than seeing it as a business threat. It also shifts agency incentives from spending more time on your projects to delivering more value from them.
And that may turn the long goodbye to billable hours into good riddance.
