Time is money. Well, not any more it seems.

Recent recent from WFA showed that just 17% of brands use time-based models as their standard agency remuneration, down from 54% in 2011, as output and performance-based models gain ground. 

It's a welcome shift, but is paying per asset or per result automatically better than paying per hour? Perhaps, the real question we should be asking is how we deliver value, and how we put a price on it.

At the production companies, production-led agencies and creative agencies I've worked in, people and hours have always been a shared language, adopted by brands and procurement. Why? Because they can be laddered up to a figure, whereas value is harder to pin down

Don’t get me wrong, knowing people and hours is useful because agencies have standing costs. Salaries, NI, overheads and margin all fit neatly into a rate card. In turn, rates, team composition and scope all give everyone something to negotiate over. That works brilliantly when something can be perfectly estimated. The problem is that advertising usually means estimating something before you know exactly what it is.

The hours behind a project also say very little about its value. Two films can deliver the same result for very different budgets, depending on how they're made. AI widens that gap, because smaller teams can now produce more in less time. But getting there sooner doesn’t make the work any less valuable.

Agencies need to be designing delivery models that give a client the most value for their money, and this is where it gets interesting. Agencies now have everything they need to deliver 360-degree services across a globally connected ecosystem. That creates the opportunity for something more hybrid. A core team with production capabilities and specialist partners where needed.

Increasingly, what agencies bring isn't just people but workflows, tools and IP that make a team even more productive. For clients, that means they aren’t paying to reinvent the wheel every time. It’s value on both sides, and the best commercial models will recognise it openly.

The attraction is bundling all of this under one elegant pricing structure, which starts with what the client is trying to achieve, then works backwards.

Priced this way, the conversation with procurement shifts from counting inputs to agreeing on value, how it's measured, what it costs and how everyone is rewarded. It means agreeing upfront on the measures that matter most to the client, whether that’s effectiveness or speed to market, and building the fee around them. Call it output-based pricing. Call it outcome-based pricing. Really it’s client-centric pricing.

The move away from hours is an opportunity for agencies to focus their commercial models on the value they create for clients and where that can have the greatest impact. For clients, the opportunity is to look closely at the agency proposition and what that proposition is capable of delivering.

That is where you find the value, and it’s the conversation we’d rather be having.


This article was first published on https://www.campaignlive.co.uk/