An hourly rate is a promise that time spent and value delivered move together. That held for a long time in agency work, because producing the thing genuinely was most of the cost.
AI broke the link. The parts of the job that used to fill a timesheet, first drafts, variant sets, reporting, research passes, are now the parts that compress hardest. An agency billing hours for that work is selling a product whose cost falls every quarter, to clients who can read the same headlines and will eventually ask why the invoice has not moved.
I say this as someone who still prices a good share of work this way. We are in the middle of the shift, not past it, and I would not trust anyone claiming to have it fully solved.
What is clear is which part survives. The decision about what to do is not getting cheaper. Which market to enter, which claim to lead with, which channel to stop funding, when the data is telling you something real rather than noise: those are judgement, and judgement does not compress just because drafting did.
Pricing that is harder than pricing hours, which is the honest obstacle here. Hours are easy to verify and easy to argue about. Judgement has no unit. The models being tried are retainers for access, outcome-linked fees, and fixed prices per decision rather than per deliverable, and they all have holes in them.
The part I am confident about is the direction. An agency that describes itself by production capacity is describing the half of the work that is deflating.
This clip is from my conversation on the 2Stallions Marketing Expert Series.
