"It's about change management': Sir Martin Sorrell says the billable hour is dying, but getting clients to move in is proving harder

"The far more important thing is, what is going to be the pace of AI adoption? Because the simple fact is, consumers have adopted AI faster than companies, and companies aren't doing it because it's not just about technology or workflow - it's about change management."

"For subscriptions to work at scale, a lot has to align: existing clients have to be willing to reopen contracts; procurement teams have to get comfortable pricing outputs rather than hours; rising inference costs have to stay absorbable within a fixed fee."

Outcome-based pay is gaining popularity, but its success hinges on agencies' AI adoption, which is currently limited by client reluctance to invest. S4 Capital's CEO emphasizes the need for subscriptions that bundle talent and technology. While some clients are restructuring their agency relationships around this model, widespread adoption faces challenges, including contract negotiations and the need for faster AI integration. S4 aims for a quarter of its revenue from subscriptions by year-end, but progress is slow due to various market factors.

Read at Digiday