VoxComm, the global voice of agencies, has issued new guidance designed to help agencies ensure they are properly rewarded for helping brands grow in an AI-driven market. ‘Redesigning the Agency Value Model’ outlines why pricing changes alone are no longer enough and recommends that agencies adopt other offerings as AI cuts revenue by reducing hours and fees.
Aimed at CEOs, CFOs, and leadership teams, the report seeks to encourage agencies to decouple revenue and profit from staffing numbers and is designed as a guide for change across the agency community. The report includes insights and examples from agency brands that have already started on this path, including Accenture Song’s Droga5.
Revenue has become decoupled from headcount – Charley Stoney, EACA
Charley Stoney, CEO of the European Association of Communications Agencies (EACA), said the report highlights the need for a new business model if agencies are to remain financially viable, one that moves them from staffed services to business outcomes. In future, agencies must focus on business outcomes rather than time and people.
The report identifies four recurring patterns agencies experience along the journey – busy by design, scaling with strain, expertly undervalued leading to the ultimate goal distinctly scalable. At the final stage, agencies are built around expertise and outcomes rather than effort, pricing aligns with impact using a range of fixed, subscription or performance models.
Stoney added that agencies that have already embarked on the AI journey report increased profitability, improved client retention and growth, higher client satisfaction scores and stronger campaign performance.
