Agency Models: In the quest for productization, the tools were the problem. Now they’re not
24HR Business Plan’s Guy Wieynk explores how the communication agency narrative around billing has shifted as a result of the new tools at our disposal.
Productisation has been the ad industry’s unfulfilled promise for a decade. Not because agencies lacked the will, but because the commercial model rewarded opacity and the technology to replace it did not exist. In 2026, both have changed.
Smoke and mirrors
The economics of the billable-hour model are broken and everyone knows it. It is inefficient, misaligned with value, and structurally unable to scale creativity in a way that reflects its true worth. Yet nothing changes.
Why?
Because agencies adapted.
If you cannot charge what the idea is worth, you make it back elsewhere: production markups, media arbitrage, inflated shoot budgets, and layers of “necessary” complexity. Below-the-line profit became both the industry’s dirty secret and its financial backbone.
For years, clients tolerated it. Some even expected it. But that balance has shifted. Clients are no longer auditing processes, they are auditing motives, and using AI to uncover where profits may be hiding. That has fueled the push for transparency around those assumed margins. They are asking not just what something cost, but why it cost what it did.
As a result, those hidden revenue streams are being exposed, challenged, and in many cases eliminated. Ironically, the very mechanisms that helped agencies survive a flawed pricing model are now speeding up its collapse.
The challenge of pricing outcomes
The real barrier was technology and infrastructure. Pricing outcomes sounds elegant in theory, but in practice, it is hard. To do it well, you need consistency, repeatability, predictable costs, and operational control at a level most agencies simply did not have.
Without that, outcome-based pricing becomes a gamble. Margins swing, delivery becomes fragile, and risk sits squarely with the agency.
So the industry talked about productization endlessly while continuing to bill by the hour. This wasn’t out of hypocrisy, but necessity.
The incentive structure and the technology gap reinforced each other. The tools were not there to support a new model, and the existing model discouraged building them. That created the perfect loop of inertia.
The tipping point
This is a convergence.
A generation of tools has quietly assembled into something that works. Automation platforms remove manual drag, SaaS production systems standardize delivery, lean operating models strip out overhead, and direct-to-brand infrastructure shortens the commercial chain.
It is a broader stack that, together, makes outcome-based pricing commercially viable for the first time. That is the tipping point.
Where variability once made productization risky, these tools bring consistency. Scale, which once required headcount, now requires systems. Margins, once protected through opacity, can now be engineered by design.
The conversation has moved from should we do this? to why are we not already doing it?
Proof point one: Otomo
The AI-enabled creative automation platform Otomo did not begin as a grand strategic pivot. It began as a practical solution inside an agency, built to solve a production problem.
But when we looked honestly at where the value landed, the answer was not agencies. It was production companies operating at scale.
That insight mattered because the technology did not just enable a new model, it revealed one.
Otomo became a standalone SaaS platform, now serving 45 brands globally. Not because that was the original intention, but because the logic of the technology pointed there.
The lesson is simple, and slightly uncomfortable: follow the technology rigorously enough and it will show you where the value really lives, even if that is not where you expected it to be.
Proof point two: Untold Fable/Ace of Hearts
Untold Fable, which was acquired by AnalogFolk under my leadership, offered a tech-enabled, productized production model with global reach and direct client relationships. Through its platform, it blended traditional production outputs with additional revenue streams such as stock image licensing and talent sourcing.
We deliberately targeted direct production budgets because we knew agencies would look to recover hollow-margin projects through production kickbacks.
Interestingly, a high percentage of revenue still comes from direct production client budgets because agencies continue to fall back on old ways of working: expensive shoots, large crews, and legacy structures instead of building for what comes next.
Meanwhile, Ace of Hearts, which recently won the Bupa account, shows that simpler, leaner, and more transparent models are increasingly attractive. They also create an opportunity for new agencies to scale quickly by offering ways of working that appeal to major clients.
These businesses remain in the minority because of structural tension. A transparent, outcome-based pricing system is a direct commercial threat to a model built on hidden margins and limited flexibility.
But the market is starting to vote and, unsurprisingly, it is not voting for complexity.
Outcomes over outputs
This is no longer theoretical. The below-the-line revenue streams agencies relied on are either under scrutiny, under pressure, or already gone. For many agencies, productization is a replacement for income they are about to lose.
Agency revenue fundamentally comes from hours, outcomes, and outputs. But hours are becoming cheaper, faster, and in some cases irrelevant, while outputs are becoming commoditized.
That leaves outcomes: the one thing that can still command a premium, but only if it can be delivered consistently and credibly. That is the challenge, and the opportunity.
Are you in?
For a decade, the industry has talked about change: moving beyond hours, valuing creativity, and building scalable, productized offerings. The missing piece was capability.
Now the tools exist to close the gap between what agencies promise and what they charge for. They can build models that are transparent, scalable, and commercially robust.
The question is no longer whether productization is possible. It is whether agencies are willing to embrace what that means, because the ones that thrive will not be the ones that talked about it longest. They will be the ones who acted first.
This article fist appeared in The Drum.
