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AI Agency pricing

AI Agency Pricing The Death of Hourly Billing and the Rise of Value-Based Pricing

AI technology has been making waves across various industries, and the advertising and PR agency sector is no exception. As AI continues to advance, agency chiefs are beginning to see the potential for AI to revolutionize agency pricing models. In this article, we explore the thoughts and opinions of agency chiefs on the impact of AI on agency fees.

The Death of Hourly Billing: Embracing Value-Based Pricing

One resounding sentiment among agency chiefs is that AI will bring an end to time-based fees, and many view this as a positive development. Paul Stollery, co-founder and creative director at PR agency Hard Numbers, expresses his satisfaction with bidding goodbye to time-based fees, stating, “Time-based business agency fees are done for. And good riddance.” Stollery believes that AI-driven content production will render time in the scope of work easily questioned and removed, ultimately leading to the demise of hourly billing. He cautions that agencies that sell time rather than value will be most at risk of losing revenue to automation in the long run.

Andrew Bruce Smith, founder of AI, PR, and marketing agency Escherman, echoes Stollery’s sentiments and predicts that AI integration into PR business processes will profoundly impact time-based agency fee structures. Smith believes that the increased efficiency brought about by AI will lead agencies to shift from hourly rates to value-based pricing, emphasizing the value delivered rather than the time spent. He also highlights the potential for agencies to introduce novel services leveraging AI, opening new revenue avenues. Smith notes that professionals will need to upgrade their skills to focus on strategic roles and that increased transparency will enable more accurate billing.

Embracing Value-Based Pricing: Aligning Client and Agency Goals

Shalon Kerr, founder of healthcare PR firm PR-it, raises the dilemma of whether hourly billing is still the right approach for agencies. She argues that AI can expedite many agency tasks but cannot replace the essential elements of counsel, strategic thinking, creativity, and relationship-building that are crucial for executing successful campaigns. Kerr expresses her perplexity at the lack of adoption of value-based pricing, which aligns client and agency goals. As AI advances, the notion of billing by the hour becomes increasingly outdated, particularly for tasks that AI can handle almost instantly. Kerr believes that agencies should embrace value-based pricing to reflect the true value they provide.

AI’s Potential: Charging More for Enhanced Services

Debby Penton, CEO of PR agency Wildfire, believes that AI can help agencies charge more for their services. She emphasizes that PR professionals are multi-skilled and that their job has become more challenging over the years. Penton argues that using AI to create efficiencies in tasks just makes sense and that agencies embracing AI should be able to deliver more by the hour, warranting higher fees. She suggests that AI allows agencies to have more time for strategic high-value consultancy.

Cost Reductions and Increased Transparency

Lisa Rehurek, founder and CEO of RFP Success Company, highlights the long-term cost reductions that AI integration can bring to agencies. While there may be an initial investment required for AI technology integration, Rehurek explains that AI-driven automation optimizes processes, leading to streamlined operations and decreased resource requirements. These cost savings can be reflected in client fee structures, making the agency more attractive or bolstering profit margins.

Rehurek also emphasizes the increased transparency that AI can bring to the agency-client relationship. AI’s analytical capabilities enable agencies to provide clients with comprehensive and up-to-the-minute reporting, instilling trust and confidence. This transparency can potentially justify higher fees as clients recognize the value of having access to timely and detailed insights.

AI Consultant Perspective: Creative Freedom and Client Expectations

David Hart, a communications, marketing, and business development consultant at AI consultancy InferenceCloud, offers a consultant’s perspective on the impact of AI. Hart believes that AI solutions enable agencies to make a bigger impact for their clients by offering in-depth, research and data-driven content. He argues that agencies should be cautious about low-cost or free AI solutions that offer fast content, as quality may be compromised. He adds that many clients are already asking agencies for AI solutions, as they have been given KPIs by management to incorporate AI elements into their communications departments.

In conclusion, agency chiefs are optimistic about the impact of AI on agency pricing models. The death of hourly billing and the rise of value-based pricing are seen as positive developments, with AI enabling agencies to deliver more value and charge accordingly. The integration of AI into agency processes promises increased efficiency, cost reductions, and enhanced transparency. While challenges and ethical considerations may arise, the potential benefits of AI in agency pricing are clear.

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The future of #wfh & distance learning

AI, VR, AR, MR at work and school


These new technologies will play a material role in helping teams work together. Today, AI is playing an interesting role in conferencing and call center applications performing duties like transcription and providing sentiment analysis, but that is just the tip of the iceberg.

Stowe Boyd recently wrote a great article, “The Fall of The Silos, The Rise of Self-Organizing Teams”. In the article, he states “The 2020 workplace will be more productive and engaging for workers and employers thanks to new technology that enables better personalization and adaptation to change, according to a recent ADP report. ADP posits that: isolated, siloed approaches to getting work done will be supplanted by teamwork; that the work experience will be personalized through artificial intelligence and other technologies, which provide employees with a “have it your way” work experience; and businesses and teams will become more agile as they strive to keep pace with technology.”

I have found a few examples of commercial offerings that support at least the beginnings of what Stowe writes, out in the wild.

Testfire Labs, a small upstart in Edmonton has created Hendrix.ai, a service that offers AI-driven transcription services that anyone can invite to any calendar event.

Salesforce is also making use of AI in a new service that has been recently launched at Dreamforce 2019 called Einstein Voice Assistant, part of their Einstein Voice offering.

According to VentureBeat, Einstein Voice Assistant is more than just a glorified transcriber. Users can update Salesforce records and create tasks using natural language requests, or tap Einstein Vice Assistant to navigate through Einstein Analytics dashboards and surface metrics like open service cases and performance guidance. Plus, thanks to native integration with popular voice assistants like Google Assistant and Alexa, Einstein Voice Assistant can deliver a daily brief of “key priorities” like upcoming calendar appointments and team pipeline updates.

Dialpad has also rolled out “VoiceAI” providing transcriptions and sentiment analysis, mainly for contact center calls.

Cisco is empowering it’s WebEx Assistant with more capabilities via their acquisition of Accompany. Cisco described a scenario to show how AI and the smart use of data can help Webex improve on conference calls:

When an employee walks into a meeting room, she is automatically recognized by the system, which reads her calendar, spots a scheduled meeting and asks if she wants to join it. The worker says no, she needs to call someone else first and gives her colleague’s first name only. Webex guesses who she’s trying to call, using data and AI software to cut the number of options for whom to dial.

VR at work and in the classroom

You can be sure remote work will continue to evolve as VR (virtual reality) and AR (augmented reality) technology becomes more accessible and less cumbersome. AR and VR applications already enable team members to work alongside each other in the same coworking VR room but in fact, are separated by thousands of kilometers.

Dataview VR — The Glimpse Group

An early example of this is Dataview VR (video), and Social VR (video), products created by The Glimpse Group, which are very interesting preliminary steps towards an immersive virtual office experience.

Matt Mullenweg (Founder of Automattic), had an interesting chat with John Vechey of Pluto VR about how VR will become the conduit for virtual coworking. Here is the video promoting the alpha release of Pluto VR on Steam, a promising future indeed.

Immersed VR also recently released a VR Coworking application, which I will be checking out soon.

We at Immersed are announcing the newest addition to our multi-monitor VR app, Virtual Co-Working. Remote professionals can now work in a virtual coffee shop (and other virtual co-working spaces) with thousands of other remote workers all around the world!

Immersed — VR Coworking

If we are going to talk about VR (Or MR — Mixed Reality), we can’t exclude Microsoft and Hololens. Now 4 years old, Hololens is targeting business applications as a core focus of the offering. Last year they made a bold statement about fixing Video Conferencing and referenced Hololens. This year, they demonstrated Hololens 2 (MWC 2019) business applications such as mechanical repair, medical training, and digital media creation. The most compelling demonstration was on a holomeeting concept, where 2 participants we interacting with and discussing a 3D object, although this capability is not available yet.

Hololens 2 — holomeeting demo

Another interesting example of MR (Mixed Reality) at work that is available today is Help Lightning. Check out their intro video below where they show a remote field technician helping an onsite technician troubleshoot an installation, very interesting real-world application:

[vimeo 259194214 w=640 h=360]

MeetinVR gets a mention here, I could not find anything on their offer but I did sign up for their early access program.

We have a ways to go to where the VR experience feels natural in a virtual office and classroom setting. Headsets need to be much smaller, lighter and more akin to AR glasses versus the VR welding goggles we see today. I am sure we’ll get there.

Until then, we have plenty of remote work and work from home tools to draw from to get the job done, which are getting better each and every day.


Please share your thoughts with us. Is your company pursuing remote work? If you work in a distributed company now, what tools do you use today, are they working for you? How often do you use video/web conferencing as part of your daily routine? If you prefer sharing your comments or questions privately, feel free to send me a text message: (877) 897–1952 (powered by SignalWire)

None of the ideas expressed in this post are shared, supported, or endorsed in any manner by my employer.

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