You've probably started using AI in your workplace. Maybe you're deep in it. And if you've noticed how much it saves you on tasks you used to grind through, you've likely also noticed that every external partner you work with is saying the same thing: we're using AI too.
Great. We're all saving time, right?
So why aren't all your partner’s bills getting smaller?
It's a fair question, and one that came up during our recent trends presentations with clients. At Show and Tell, we put together a couple of "news you can use" insights sessions each year, sharing what we're seeing across the industry and how we're putting it to work. Our most recent one specifically covers how we're using AI in a creative agency context.
(If you're interested in a session for your team, reach out.)
Where the time actually goes
AI changes how time gets used. Tasks that used to eat hours — compiling data, summarizing notes, formatting reports — move faster now. That ‘recovered time’ goes to (at least one of) three places.
First, it goes towards validating the AI itself. This is non-negotiable. AI gets things wrong, regularly, and in ways that aren't always obvious. Catching those errors requires someone who understands the context, the nuance, and what's actually at stake. That work doesn't disappear, it just changes shape.
Second, it goes towards more of the higher-value work: testing more creative variations, iterating on what's performing, monitoring campaigns more closely. The stuff that actually moves the needle for clients.
And third — it can go to cost savings on your invoice.
Though, not always. Let's explore why that is.
Yes, some things are more cost effective now
Some AI-assisted work costs clients less than it used to.
Concept development is one example. What once required weeks of iteration can now move faster, and that's reflected in what many agencies charge. Discovery work and certain types of research are in the same category, particularly because the up-front compilation and distilling of information is expedited by AI.
Another source of significant savings are in hard costs. About a decade ago, we were working with a potash company in the prairies. The creative called for a time-lapse video shot of a regionally-specific crop (because, farmers know) growing in a field. We positioned a camera to capture and compile shots over months. In an AI-enabled environment, there’s no longer a need for that kind of investment. Time and money, saved.
But consider another case in point: For a campaign we recently developed for a crop input supplier in the agriculture industry, the brief called for video and static assets showing:
• their product in use…
• across multiple farm settings…
• at the right time of year…
• in lighting that indicated the right time of day.
Before AI, that request would juggle multiple shoot days on location, talent, crew, travel, and the unpredictability of weather and crop timing. The cost for a project like that, done the conventional way, could run well into six figures.
We did it differently. Talent was shot on green screen in a single studio day. AI-generated backgrounds allowed us to show exactly the right crop(s) at exactly the right moment — magic hour, breeze in the field, visually indistinguishable from location footage. We built those backgrounds before the shoot, put them on screen during production, and the client saw the final look in real time rather than imagining what they'd get later.
The result was delivered at roughly half the cost of the traditional approach, with the hard cost savings coming almost entirely from eliminating location work.
Here’s the thing though — and where the myth that ‘AI equals time savings’ falls apart: Our services time on those assets actually increased.
We took work in-house that would have previously gone to photo and video suppliers, and it took more hours to plan for all the moving pieces and permutations. Our time went up compared to the way we used to do it, but the client's total investment also came down significantly.
That’s one example that illustrates the tension with the perceived time and cost saving with AI usage: namely, conflating hours with value.
Conflating hours with value
Hours have always been an imperfect proxy for value. Yes, most agencies keep timesheets to manage their team’s hours and ensure they have the capacity to take on their client load. That’s led some agencies to declare “our hours are our inventory” — which, while understandable from a time-management perspective, is only part of the value picture.
Some jobs take more (or less) time than others. And generally, the pricing of those jobs should mirror the investment. But pricing work based only on time input assumes that clients are buying an agency’s hours when what they’re really after are results.
Pricing based only on time assumes clients are buying an agency’s hours.
What they’re really after are results.
It's understandable that clients want to know an agency’s hourly rate — it’s one of very few apples-to-apples they can compare when selecting between different agency teams. But in our decades in this industry, no client's ever asked us to ‘buy an hour’.
Our clients buy ideas, strategy, and results. And those have no perfect, steadfast relationship to how long it takes to produce them. A good creative insight that takes 20 minutes is worth more than a mediocre one that took a week. The monthly subscription fee we charge for a custom-built app doesn’t nearly reflect the time it took to develop it. There’s absolutely a relationship — but time and value are not always equal.
What AI actually changes
In an AI-forward environment like ours, many things now happen faster. And some things take more time. Some things cost less, and others cost the same — but the distribution of time vs. hard costs has changed. Using AI doesn’t automatically translate into a perfect or proportionate time and cost savings.
AI gives agencies (like ours) that already deliver results the ability to deliver more of them, more efficiently. In production: by reducing some hard costs that used to flow to other suppliers. In strategy and creative: by expanding exploration within a given budget. In research work: by compressing timelines between the intercept(s) and delivery of findings.
The agencies worth working with are the ones that pass their genuine savings along, invest the recovered capacity into better work — and are transparent about when they do which.
Because the arbiter of value has never been time. It's results.
The clients that we’ve shared the most success with, get this. They’re looking for real change, they’re results-focused and results-driven — just like we are.
For them, the question isn't, “How many hours did you spend?”
It's, "What did I get for what I paid?"
AI has and will continue to change how we all do things. The best agencies will continue to be relentlessly focused on harnessing the power of AI to create and deliver ever more value on behalf of their clients.
To talk more about agency pricing in the age of AI, or to book a trends presentation with our team, contact us.