The future of agency pricing in an AI-driven world

Agency pricing is under strain and most agencies know it. We talk confidently about innovation yet repeatedly fall back on models built for a very different era. That tension sat at the heart of the IPA’s 2025 report, 'The Price Isn’t Right', and it is why the IPA has launched its new Pricing Playbook. Having co-authored the playbook with my colleague Will Engert, I see it as a way to give agencies a practical way through the disruption caused by AI, automation and shifting expectations of value.

Working on this, it became clear just how profoundly agencies are reassessing what they sell and how they price it. Agencies remain professional services businesses, but they are also increasingly operating as technology providers, embedding AI across media, creative and production workflows. The Playbook reflects that reality, offering guidance on pricing technology, examining the impact of AI on traditional models, and setting out a series of provocations for what comes next.

Drawing directly on that work, there are five ideas we proffer in the Playbook that we believe every agency should consider if it wants to remain relevant, defensible and profitable, which I will touch on here.

Automation is collapsing execution and exposing where real value lies

Automation is rapidly stripping cost and friction out of media and creative execution, making many delivery tasks interchangeable or obsolete. Coupled with this, as AI-driven tools become embedded directly within media owner platforms, work that once justified agency involvement is now available instantly and at scale. The result is a sharp exposure of where agencies genuinely add value - and where they don’t, which I’ll come onto later.

Traditional pricing models are breaking

This shift is also breaking long-standing commercial models. FTE-based pricing becomes harder to defend as fewer people are needed, while commission and deliverable-based fees erode as speed increases and marginal production costs approach zero. In their place, agencies will need pricing structures that reflect a blended stack of people, data and automation - from licences and usage fees to execution and outcome-linked models.

Agencies must choose what they own - tools, workflows, or judgement

Strategically, agencies face a defining choice: invest in proprietary tools and workflows, or operate as managed services on top of commoditised platforms. Decisions around data ownership, agent training and client access will shape defensibility, margins and long-term relevance.

Agencies will need to work hard to stay relevant

Despite these pressures, agencies still have a role, but a more demanding one. Clients will value integrated, cross-platform perspective and the ability to synthesise insight across categories and markets, capabilities that most in-house teams and self-serve tools struggle to sustain.

Agencies must stop giving away human strategic value

Crucially, as machines absorb execution, human judgement becomes the scarcest asset. Strategic clarity, taste, reassurance and decision-making can no longer be bundled in for free. Agencies that explicitly price and protect this value can remain relevant and profitable; those that don’t will find it increasingly difficult to justify their place in the ecosystem.

A call to arms

The IPA Pricing Playbook is more than a guide, it is a prompt for the industry to act. Agencies must rethink pricing, adopt technology with intent and place human judgment at the centre of their value proposition. Those that do will thrive in the AI era. Those that don’t risk becoming irrelevant, their value obscured behind commoditised execution. How agencies respond will shape the next decade of our industry.

Jason Cobbold is the chair of the IPA Commercial Leadership Group