Agencies grapple with economics of a new marketing currency: the AI token

"There's no one model that's the one silver bullet ... you have to use a lot of different models and all of those have different token economics. The more tokens processed, the more compute is used and the higher the cost. And while the tokens themselves cost a fraction of a cent, they add up fast; a recent Coca-Cola ad campaign required 70,000 prompts and millions of tokens."

"At full-service agency Merge, token costs are passed on to clients on a metered, case-by-case basis. Production shop Big Spaceship follows a similar framework, treating compute as another budget item akin to a catering or equipment hire. Silverside uses a subscription model with seat pricing similar to that operated by companies like Salesforce."

Generative AI applications require token-based metering systems that track both user prompts and model outputs, with costs accumulating rapidly across large campaigns. Marketing agencies face strategic decisions about whether to pass AI compute costs to clients or absorb them internally. Different business models have emerged: some agencies like Merge and Big Spaceship treat tokens as metered production costs passed to clients, while others like Silverside AI use subscription-based seat pricing models similar to software-as-a-service platforms. Full-service agencies like RPA choose to absorb token costs entirely. The lack of standardized pricing reflects uncertainty about AI implementation value and the varying token economics across different AI models.

Read at Digiday