Tag: new business models
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Agencies Are Bolting AI Clauses Onto Contracts Written for Billable Hours
AI is shrinking the hours agencies bill for, and the contracts that govern that work were written for a different arithmetic. Four agency executives describe the fix so far: addendums, one clause at a time, covering IP, data and tool disclosure. Nobody has agreed on what AI should cost.
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Agencies Want Clients to Evaluate AI Agents Like New Hires
Some of the agencies building AI agents are the ones urging clients to slow down. Mod Op’s CTO says agents should be evaluated like new roles tied to growth, and Booking Holdings’ AI lead calls pricing and contracts a partnership exercise.
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Agency Leaders Predict Growth in Outcomes-Based Pricing, but Face Challenges.
Eighty-five percent of agency leaders expect to do more outcomes-based pricing. The consultancy that studied it says pure versions are “exceedingly rare” — what agencies more frequently agree to is an output fee with a performance measure bolted on. Sixty-nine percent name attribution as a barrier, and the same share name procurement.
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Monks’ Co-Founder: The Billable Hour Punishes the Agency That Uses AI Well
Every vendor at Ai4 was selling the same tenfold speedup, which Wesley ter Haar flags as a pervasive issue with AI tooling – when the speed is off the shelf, it is not a moat. The Monks co-founder argues the real constraint is the legacy model: agencies need to stop selling time, because getting faster…
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S4 Doubled First-Half Profit. Sorrell Says the Token Spending Has Been “Ill-Disciplined.”
S4 Capital’s margins widened to 12.3% and its first-half operating profit doubled. Its chair says the company has been ill-disciplined on token spending, and Goldman Sachs expects token consumption to rise 24-fold by 2030. Monks passes token costs to clients at no margin.
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Mod Op Built Its Own AI Layer Rather Than License Seats for 500 Employees
Building rather than licensing saved Mod Op an estimated $3 million, a number describing a bill the agency never received. Its Orion platform sits over the major LLM APIs, automating agency workflows and, eventually, client ones. Most of the usage is still internal. No client has asked for a login yet.
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WPP’s $1.8 Billion Enterprise Unit Is Selling Operating Models, Not Campaigns
WPP Enterprise Solutions now has a product line: five AI services, 12,000 people, $1.8 billion in revenue, and Accenture and Deloitte in its sights. The offer is an operating model rather than a campaign — and its CEO says the 2027 scorecard won’t be a dollar figure.
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Omnicom Media’s CEO Says the Holdco Is Now a “Capability Company”
Ralph Pardo runs the North American arm of the world’s largest agency holding company, and he says the traditional holdco is finished. His argument isn’t that AI is coming for agencies — it’s that AI has flattened the scale advantage holdcos were built to sell.
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Dept Builds a “Multiversal Assistant” and Won’t Bill Clients for the Glue
Dept is rolling out Deptify, an AI system accessed through a persistent assistant called “D.” The pitch is orchestration: D pulls context from whatever workflow tools a client already uses — Adobe Workfront, Asana, or something else — and routes people to the right tool for the job, instead of asking them to learn another…
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PMG Put $500,000 Behind a Cannes Hackathon and Kept None of the Code
Up to $500,000 in prize money, roughly two dozen entrants, three briefs drawn from real client problems — and PMG keeps none of the code. The agency says the Cannes hackathon demonstrates what AI has done to technical development. It is also a look at who can build.
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When Product Ships Weekly, Marketing Becomes the Bottleneck
HBR’s premise is blunt: AI sped up engineering first, and marketing is now stuck doing quarterly-era coordination in a continuous-release world. Citing Anthropic research, the piece notes that software engineering accounts for “nearly 50% of all agentic activity.” That helps explain why product teams are shipping continuously, and why marketing — with its cross-functional handoffs,…
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S4 Capital betting on agency subscription model
S4 Capital’s Sir Martin Sorrell is talking less about whether the billable hour declines, and more about what replaces it. The answer, at least for S4, is subscriptions. On the company’s latest earnings call, Sorrell described a model built around fixed annual fees that bundle senior talent with agentic workflows, brand-specific knowledge bases, and periodic…
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WPP Launches Open Pro: Self-Serve AI Marketing
WPP has launched Open Pro, a self-serve spin-off of its existing AI-driven marketing platform, designed to help marketers at smaller brands or in secondary markets build and launch campaigns without going through an agency. The idea isn’t to cut agencies out of the loop but to give clients more tactical tools for lower-touch projects. Access…
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S4 Capital Bets on Bots, Not Bodies
S4 Capital is shifting its operations to focus on AI-powered agents, automating traditional agency tasks like content production, which reduces timelines significantly. Executive director Wes ter Haar claims that 65% of agency work can already be managed by AI. The company envisions an “AI workforce” that integrates strategy, content, and media into tech-led services while…
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AI Agents and Billable Hours: Omnicom’s Pending Revenue Rethink
Omnicom isn’t just weaving AI into its workflows—it’s giving the tech a corner office. During the company’s latest earnings call, CTO Paolo Yuvienco spotlighted a growing internal web of custom-built AI agents fed by Omnicom’s Omni data platform. These aren’t your average productivity bots; they’re tag-teaming strategy teams to simulate focus groups, fine-tune campaigns in…
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Bye-Bye Billable Hours? Sorrell Bets Big on Output in the Age of AI
S4 Capital’s Sir Martin Sorrell is inching away from the traditional billable hour, leaning into a future where output trumps time. On a recent earnings call, Sorrell explained how generative AI is nudging the agency world toward performance-based pricing models, especially as marketers face mounting pressure to trim production costs without shrinking media budgets. The…
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Ammunition Fires Up Venture Studio for Startups and Agencies
Atlanta-based creative agency Ammunition is throwing more than just clever campaigns into the mix—it’s launching a full-blown venture studio. Dubbed Ammunition Ventures, the initiative aims to give early-stage startups and creative agencies a much-needed boost, combining up to $500,000 in capital and agency services per investment. The plan? Select two to three strategic partners over…
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AI-based paywall strategy increases conversions by 75%
Business Insider implemented an AI-driven paywall that increased conversions by 75%. Previously, they used a “freemium” model, paywalling only specific premium content. The AI-powered system now customizes paywall decisions based on individual reading habits, increasing revenue by identifying articles with higher conversion potential. During testing, 60% of conversions came from non-premium stories that wouldn’t have…
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American Eagle Outfitters launches resale with ThredUp
American Eagle Outfitters (AEO) has announced a new partnership with ThredUp that has seen it launch its own resale site for the brand’s secondhand and vintage clothing. Entitled ‘Re/Ae’, the platform has been curated by the fashion group itself and utilised ThredUp’s Resale-as-a-Service (RaaS) technology to power the experience. It comes as AEO looks to…