New IPA Pricing Playbook to help agencies navigate a rapidly evolving market

Drawing on the expertise of agencies, intermediaries and clients, the Playbook offers detailed guidance and case studies across a wide range of remuneration options, including Input-based models (Retainer and Mark up), Output-based models (Commission fee, Deliverable-based model and Subscription-based pricing model) and Outcome-based models (Business performance and Equity-based deal). It also covers hybrid pricing.

Crucially, it recognises that the agency landscape is changing faster than ever, observing that “Once professional services businesses, agencies are increasingly playing the role of technology provider, and this brings an entirely new set of considerations to pricing. Overlay the rapid rise of AI across all businesses, and it is clear our industry is set for new disruption.” To embrace this new reality, the Playbook provides initial guidance, including how to price for technology, the impact of AI on each of these pricing models, and outlines some provocations for the future.

Getting to the right pricing model

Navigating these changes, the Playbook asserts, will require agencies to select the right pricing model with careful consideration of context, both within the agency and in relation to clients.

To support this journey, the Pricing Playbook highlights five key considerations for agencies summarised in brief, here:

1. Appetite for risk

How much variability can the agency and client tolerate? Factors include client mix, cashflow, ownership structure, procurement processes and willingness to innovate mid-year.

2. Levels of flexibility

Can the agency flex resources up and down to meet changing demands? Consider access to offshore centres, freelancers and the client’s budgeting flexibility.

3. Stability of scope

How predictable is the client’s work? Are there repeatable elements like seasonal campaigns, or will scope fluctuate significantly?

4. Commercial fluency

Do the agency and client possess the knowledge to manage innovative pricing models effectively? The ability to handle resource allocation, data access and negotiations can determine success.

5. Confidence and measurability of outcome

How effectively can the impact of work be predicted and measured? Strong attribution opens up more options for both agency and client.

Commenting on the Pricing Playbook:

Co-author and Chair of the IPA Commercial Leadership Group, Jason Cobbold:

“Working on this Playbook reinforced just how outdated many pricing conversations still are. Agencies know the ground is shifting under them, but too often they fall back on familiar models because they feel safe."

Ed Palmer, Director of Agency Value, IPA:

“As AI adoption challenges traditional pricing models, understanding and pricing the real value an agency creates has never been more important. Agencies are blending different approaches to suit their clients, their risk appetite and the role technology now plays in delivery. This Playbook will equip agencies and advertisers to have a more open and intentional conversation about evolving commercial models.”