What are pharma marketing and medical affairs teams actually paying an agency for?
Of course time matters. Agencies have people to pay, clients need budgets they can manage and nobody wants a commercial model that feels vague or impossible to scrutinise.
But when a client chooses a specialist agency, they aren’t really buying eight hours of strategy or 20 hours of copywriting. They’re buying what sits behind those hours.
They’re paying for the experience that helps someone spot the real problem earlier. The judgement that stops the team heading down the wrong route. The understanding of the audience that means less time is wasted creating something they won’t care about. They’re paying for the ideas, processes and expertise that improve the chances of the work actually doing what it was supposed to do.
Sometimes, one hour from the right person is considerably more valuable than ten hours from somebody still working out the answer.
That distinction becomes important because hours are very good at telling us how long something took. They are much less good at telling us how valuable the result was.
Is AI changing the value of agency time?
AI is making this question much more immediate.
Clients are quite rightly asking agencies what efficiencies AI will create. We’re asking ourselves exactly the same thing. Where can we remove repetitive work? Where can we accelerate research or production? Where can technology help our people spend more of their time thinking, advising and creating?
Those efficiencies should create value for clients. But there’s another question underneath that conversation.
If an agency invests in AI, better systems, proprietary processes or reusable frameworks and can suddenly complete a piece of work in half the time, has the value of that work fallen by half?
From a client or procurement perspective, it’s completely reasonable to ask, “If this takes you less time now, why should it cost the same?”
But there’s an equally reasonable question from the agency side: “If our investment allows us to reach a better answer more quickly, why should becoming more efficient automatically make our expertise less valuable?”
This isn’t really an argument about AI. AI is simply making an existing tension in the agency model much harder to ignore.
What would value-based agency pricing actually look like?
When we talk about value-based pricing, we don’t mean that every agency fee should suddenly be tied to sales, prescriptions or some distant commercial outcome.
That would be unrealistic, particularly in pharma. An agency can influence the quality of an engagement strategy, how relevant communications are to HCPs, whether people engage with content, how effectively they progress through a journey and many other things. But there are always factors outside the agency’s control.
For us, the more interesting shift is from starting a commercial conversation with “How many hours will this take?” to starting with “What problem are we trying to solve, what would success look like and what is solving that problem worth?”
The hours don’t disappear. Neither do scopes, budgets or accountability. But time becomes one part of how the work is managed, rather than the thing that defines its value.
In reality, the answer will probably be some form of hybrid model. There will always be work where time and materials makes complete sense. There may be other projects where defined deliverables, expertise, complexity, risk or agreed measures of success provide a better basis for pricing.
We certainly don’t think there is one simple answer.
Could the way agencies are priced actually change the way they behave?
This is perhaps the part of the conversation we find most interesting.
Commercial models create incentives, whether we intend them to or not. If an agency earns more revenue when a project takes more hours, the commercial reward for finding a dramatically faster way of doing something is limited. If the health of the business is heavily determined by billable utilisation, then inevitably people start paying attention to utilisation.
That doesn’t mean agencies deliberately waste time. In our experience, most good agency people are constantly looking for ways to make work better and more efficient.
But imagine taking the logic in the other direction.
If an agency could benefit from solving a problem more effectively and efficiently, there would be an even stronger reason to invest in specialist expertise, smarter processes, better technology and intellectual property that can be reused across projects. There would be a commercial advantage in putting the right senior person into a problem for two hours if their experience saves ten hours elsewhere.
Most importantly, it moves the conversation away from how much activity went into the work and towards what the work actually achieved.
That feels much closer to the type of agency relationship clients tell us they want.
Does the hourly model affect agency culture too?
There is another reason we care about this at Brandcast, and it goes beyond pricing.
We want to attract and retain people who enjoy solving difficult problems. People who are curious, who develop expertise and who want to feel that their work makes a difference for our clients and, ultimately, for the HCPs and patients those clients serve.
So there is something disturbing about building an organisation where the easiest way to quantify an individual’s commercial contribution is how many hours they record.
If somebody finds a smarter way of doing something, we want that to be a good thing. If experience means they can reach the answer more quickly, that should increase the value of their expertise rather than diminish it. And if new technology means we can remove work that doesn’t really require a talented human being to do it, we would rather free that person up to work on something more valuable.
The way an agency makes money inevitably influences the type of organisation it becomes. That is why, for us, this is as much a conversation about the agency we want to build as it is about how we price our work.
So, is your agency hourly rate worth it?
Perhaps the question itself is slightly wrong.
Hourly rates can be useful. They give clients transparency and make agencies easier to compare. There are plenty of circumstances where they remain a sensible way to buy work.
But a £200 hourly rate isn’t expensive if the person using that hour solves a problem that saves weeks of wasted work. Equally, a much lower hourly rate isn’t necessarily good value if significantly more time is required to reach the same answer.
So perhaps instead of asking whether an agency’s hourly rate is good value, we should spend more time asking what value we actually need the agency to create.
At Brandcast, we’re still working through what this means for our own commercial model. Our ambition is to build something fair and transparent, but also something that rewards the behaviours we think clients should want from us: investing in expertise and technology, becoming more efficient, taking accountability for the quality of our thinking and focusing relentlessly on solving the right customer problems.
