Did AI change agency billing logic in 2025? Why time-based pricing is under strain

For decades, agency billing followed a familiar logic: hours spent executing ideas translated directly into revenue. Creative production, media planning, resizing assets, reporting, optimisation and campaign management formed the backbone of billable work. In 2025, that logic finally cracked. Across advertising, media and performance marketing, artificial intelligence did not just accelerate workflows; it fundamentally altered what agencies charge for.

Darshil Shah, Founder and Director at TreadBinary, says the shift was inevitable once AI copilots and autonomous systems moved from experimentation into production environments.

“Traditionally, agencies billed based on execution hours – the time spent on producing creative assets, managing campaigns, and handling operational tasks,” Shah said. “However, with AI automation, this logic shifted significantly. Since AI copilots and automation tools now handle repetitive production tasks, agencies reduced billing for manual execution and introduced ‘intelligence hours’.”

Those intelligence hours, Shah explained, now cover strategic oversight, AI orchestration, data-driven planning and ethical governance. “This reflects the industry’s move from labour-intensive work to intellectual and consultative value,” he added.

Rubeena Singh, Managing Director for India at NP Digital, describes this shift as the breaking point of time-based billing itself. “Yes, it fundamentally broke the ‘time-based’ billing model,” Singh said. “The value is no longer in hands-on keyboard time, but in the experience required to tell the machine what to do.”

Khushboo Mulani, Founder, CXO and ShEO at Slay Media, echoes the same conclusion from the creative side. “What used to require hours – resizing visuals, drafting pipeline scripts, sequencing edits – is now completely automated,” she said. “In 2025, moving to becoming billable-by-intelligence pays off.”

Why execution stopped being billable

The billing reset is closely tied to how AI matured in 2025. Shah points to the rise of agentic AI as the defining shift. These are autonomous systems capable of planning, executing and optimising tasks across complex workflows. “Agentic AI became a strategic priority for enterprises, and many started using it in productive environments,” he said.

At the same time, multimodal AI became mainstream. Systems now seamlessly process text, images, audio and video, powering everything from advanced search to creative tools and immersive environments. Generative AI also expanded beyond text and images into video and virtual worlds, including generative virtual playground

This evolution made AI copilots unavoidable. Tools like Microsoft Copilot embedded themselves into productivity suites, operating systems and development platforms. “Copilots evolved beyond simple assistants to hyper-personalised, multi-modal and autonomous task executors,” Shah said. “They became the UI for AI.”

Once these copilots began handling production-level work, execution-heavy billing simply stopped making sense. “Agencies are now expected to spend most of their time on architectural thinking,” Singh said. “Defining the brand voice, setting the data strategy and interpreting the complex results that AI generates.”

Where brand budgets actually moved

The billing shift mirrors where brand dollars moved in 2025. According to Shah, spending migrated away from traditional display and static creative formats toward AI-powered personalisation and immersive experiences. Budgets flowed into dynamic content generation, predictive audience modelling and generative video campaigns.

“Brands are investing in technologies that deliver measurable engagement and adaptive storytelling,” he said. “They will further invest in agentic AI that enables autonomous execution and a self-optimising ecosystem.”

Singh frames the shift more bluntly. “The budget moved from buying audiences to building signals,” she said. With privacy regulations blinding third-party cookies, platforms increasingly function as black boxes. “The only steering wheel left is your creativity and your data,” Singh said. “Money moved out of third-party audience lists and heavily into creative strategy and first-party data infrastructure.”

In this environment, she added, “the brand that feeds the AI engine the best fuel – better customer data and clearer creative signals – wins the auction.” Mulani notes that performance channels captured a larger share of spend, but brand storytelling did not disappear. “AI allowed bandwidth and budget to be liberated and reinvested in meaningful brand activity,” she said.

Retail media and connected TV saw the biggest gains, but Mulani cautioned that efficiency alone did not guarantee impact. “Efficiencies without the emotional mattered less,” she said.

Creativity, but with limits

While AI unlocked speed and scale, it also introduced creative risks. Shah acknowledges growing concerns around homogenisation. “Over-reliance on generative tools led to formulaic outputs lacking originality,” he said. “Teams sometimes optimised for algorithmic performance over bold concepts.” This triggered a renewed emphasis on human-led vision, with AI positioned as an enhancer rather than a replacement. Agencies increasingly found themselves selling judgment, taste and cultural literacy instead of production muscle.

That recalibration also influenced hiring.

According to Shah, new roles emerged across media and creative teams. These include AI Workflow Strategists who design AI-enabled processes, Prompt Engineers who craft effective inputs, Generative Content Curators who ensure brand consistency, and Ethics and Governance Leads who oversee responsible AI use. “These roles reflect a shift from execution-heavy tasks to oversight, orchestration and stewardship,” he said.

Advertising becomes self-optimising

One of the quietest but most consequential changes of 2025 played out in media buying. Shah points to agentic AI-driven media buying as a turning point. Brands began deploying autonomous AI agents capable of negotiating ad placements, adjusting budgets in real time and personalising creative at scale. “This reduces human intervention in execution and turns advertising into a dynamic, self-optimising ecosystem,” he said.

As these systems mature, agencies are expected to focus less on manual buying and more on governance, strategy and accountability. In that future, intelligence hours are not a premium add-on. They are the product. By the end of 2025, the message across agencies was consistent. AI did not just change how work gets done. It changed what work is worth paying for.