Is AI making your agency cheaper?

Artificial intelligence is rapidly transforming how communication agencies operate — from internal processes and client relationships to strategy, targeting, creation, and optimization. The investments are significant: major networks and holding companies are pouring millions into technology, infrastructure, and AI expertise. There is great enthusiasm about its potential, but one aspect remains underexposed: the commercial model towards clients is lagging behind.

In this first phase, AI mainly brings efficiency gains: more output in less time. And in a sector traditionally built on time spent and resource allocation, that quickly seems to imply: it can be cheaper. That reflex also exists in the market — some advertisers are using AI as an argument to drastically reduce agency fees.

But that reasoning is too simplistic. AI and agency remuneration are two separate discussions, at most indirectly related.

Efficiency is not a negotiation topic

At PitchPoint, we start from four clear principles:

1. The efficiency of an individual agency is not a subject of negotiation at client level.

2. Remuneration should be market-based.

3. A modern model is also output- or results-driven, not solely based on input or hours worked.

4. There is no one-size-fits-all model. The model should suit the nature of the collaboration, with AI being just one element of it.

AI does not fundamentally change that. A more efficient agency gains a competitive advantage — that does not automatically translate into a discount for the client.

AI will change the model — but not the logic

Over time, AI will influence agencies’ economic model. That evolution follows two phases:

• Phase 1: Investment. Agencies invest heavily in tools, infrastructure, data integration and training. These costs weigh on margins and do not immediately allow for lower prices.

• Phase 2: Economies of scale. Only when AI is broadly adopted and starts delivering at scale will structural efficiency gains arise. These will affect market levels — not through per-client negotiations, but via collective evolution.

This tension between investment and price pressure underscores that the right question is not: “Where can we cut costs?” but rather: “What is the actual value of this partnership?”

The production paradox: where discounting is logical

The above principles mostly apply to strategic, creative and account-related fees. In production — think, for example, of rolling out a creative concept across all formats and channels — AI does have an immediate and tangible impact.

We increasingly see that these executional production tasks can be done much faster and cheaper with AI tools. Think of automatically generating banners in various sizes, reformatting social content, or adaptively translating and localizing visuals and copy.

Here, we are seeing market-wide cost reductions, comparable to previous shifts like offshore production — but now happening within the agency itself.

This evolution moves the remuneration conversation to a new level: for this part of the agency fee, price reduction is justified, as long as quality is maintained.

The real impact of AI is better output

The real added value of AI lies not just in automating tasks, but in improving the quality and speed of output. AI enables agencies to arrive faster at deeper insights, sharper strategies, and more creative variants. This acceleration leads to better-grounded campaigns and greater impact.

So it’s not just about efficiency gains, but about working smarter and creating more value. Remuneration should therefore be based less on time, and more on delivered value and actual results. Output-based and result-based remuneration provide the right framework for this.

Anyone looking to build a transparent, future-proof remuneration model can find guidance in the brochure ‘Remuneration for Success’, developed by PitchPoint in collaboration with UBA and ACC.

Towards a new balance

AI is changing the way agencies operate. But that does not mean fees should automatically drop today. Those who only look at cost miss the real shift: from input to value, from hours to impact.

At the same time, AI and data are creating more transparency in performance. Clients will — rightly — expect more accountability. But therein also lies an opportunity: agencies that truly create value through AI should be able to demonstrate that — and have it recognized.

AI doesn’t ask for discounts.

AI asks for a mature conversation about value.

Remuneration must evolve with the reality of the market — with respect for investment, complexity, and the strategic added value that AI can enable. Those who focus on performance, transparency and output are helping to shape the remuneration model of tomorrow. While also acknowledging that in some areas — such as production — AI is already causing pricing shifts.

Are you paying for value — or just paying? Let PitchPoint help bring clarity to your agency remuneration model. Contact mia@pitchpoint.be for a non-binding conversation.