S4 Capital’s cost discipline broadened margins to 12.3% and doubled first-half operating profit to £35.2 million from £16.4 million in the same period a year earlier, and the London firm’s shares jumped on the results. Chair Sir Martin Sorrell called the numbers a “huge improvement.” On token spending: “If I was going to be critical, I think we’ve probably been ill-disciplined on that,” he said.
Token usage is “exploding” at Monks, according to co-founder and chief AI officer Wesley ter Haar. Goldman Sachs forecasts token consumption could rise 24-fold between 2026 and 2030, mostly on enterprise and business usage. Some agencies have already acted: PMG set a $50 daily cap on employee token usage in May. Ter Haar prefers a “horses for courses” approach — caps on teams running lower-priority tasks, lifted for practice areas like coding. “If you let your whole team tokenmaxx, then you’ll have a bunch of people sort of burning [dollars] figuring out what the weather is next week,” he said. Monks.flow shifts between models by suitability, token efficiency included, and staff can be restricted to set menus of agents inside a prescribed workflow.
Token costs are bundled with other project costs and passed to Monks.flow clients directly, with no additional margin. S4 has pushed on performance-linked fees and on a subscription arrangement giving clients a set number of outputs for a fixed fee; ter Haar said subscriptions are on track to reach 25% of revenue by the end of 2026, and that “almost all new business is either subscription or [outcome-based].” WPP is moving the same way. Procurement is the obstacle. “I think clients aren’t good at buying variable commercial models yet,” ter Haar said.
The 4As Forrester found just 9% of agencies monetize generative AI, while 61% treat it as a cost of doing business. Jay Pattisall, a Forrester vice president and principal analyst, argues the equities markets and private equity are subsidizing the cost of AI at the moment. If third-party providers switch from SaaS to token- or GPU-based pricing, he said, agencies will find the real cost significantly higher — possibly more expensive to automate advertising than to hire humans to create it. That scenario, he said, could be devastating for an industry that shed about 8% of its staff in 2025 and the first half of 2026.
Read more at Digiday.