Big brands are dropping hourly agency fees, WFA study finds
A WFA survey of 69 global brands found hourly agency fees fell from 54% in 2011 to 19% in 2026. What output and performance pay means for your agency retainer.
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Big advertisers are moving away from paying agencies by the hour. A World Federation of Advertisers (WFA) survey of 69 multinational companies found that labor-based fees are now the main pay model for 19% of them, down from 54% in 2011 WFA . The report predicts AI will speed up the change, and 61% of the brands plan to rework their pay models in response WFA .
What the WFA survey measured
The WFA and Agency Mania Solutions published the results on September 29, 2026, in a report titled “How Brands Define, Scope and Reward Agency Work” WFA . The 69 companies have a combined global marketing spend of $147 billion. Most respondents (71%) work in global marketing procurement, VideoWeek reported VideoWeek .
The main finding is a long decline in paying for time. Labor-based models fell from 54% of companies in 2011 to 33% in 2022, when the research last ran. Today the figure is 19% WFA .
| Main pay model | 2011 | 2026 |
|---|---|---|
| Labor-based (hours or staff time) | 54% | 19% |
| Fixed fee or output-based | 20% | 33% |
| Labor plus performance | 9% | 21% |
The fixed-fee figure rose from 20% to 33% over the 15 years. Labor plus performance more than doubled, from 9% to 21% VideoWeek .
How the main agency pay models work
The survey groups pay into a few models. In plain terms:
- Labor-based. You pay for hours or for full-time staff, often through a monthly retainer.
- Fixed fee or output-based. You pay a set price for defined deliverables, such as a campaign or a batch of ads.
- Labor plus performance. You pay for time, plus a bonus tied to agreed results.
- Value-based. The price reflects the value the work creates for you, not the time it takes.
The type of work shapes the pay model
The split changes by discipline. Fixed-fee or output pay leads for ad hoc creative work at 58% and for production at 61%. Labor plus performance covers 41% of media planning and 34% of media buying WFA .
Region matters too. In the United States and Canada, labor or staff-time pay is still the most common model at 38%. Fixed-fee or output pay follows at 29%, and labor plus performance at 21%. Europe leans toward fixed-fee or output pay at 32%. Asia Pacific leans hardest, at 44% WFA .
So hourly pay is still common in North America. The direction of travel points the other way.
Pay for results is growing, but it stays small
Performance pay is popular in plans but small in practice. Across most disciplines, 67% to 80% of respondents say performance-based pay makes up less than 20% of total agency compensation WFA .
Plans point toward more of it. Looking ahead, 63% expect to use more performance-based fees, 46% more value-based models and 36% more fixed-fee or output deals. Some 42% expect to cut back on labor plus performance arrangements VideoWeek .
AI is speeding up the shift
The WFA says AI lets agencies finish many tasks faster, which makes time a weaker measure of value WFA . One in five brands (20%) has already changed its commercial model in response to AI, and 61% intend to VideoWeek .
Laura Forcetti, a WFA director, said clients care about the quality, impact and performance of the work, not how many people or hours it took to produce. “The future of agency compensation is not paying for effort, it is rewarding valuable work, delivered effectively,” she said WFA .
The math is easy to see. If an agency bills by the hour and AI cuts the hours, your bill drops only if the agency passes the savings on. If the agency bills for outputs, your price is tied to what you get, not to hours you cannot check.
Brands rate a clear brief far above money
The study scored a list of factors by importance. On a 6-point scale, brands scored great briefing at 5.6 and financial incentives at 3.9. Long-term relationships scored 3.8 VideoWeek .
Relationships are lasting longer all the same. Average paid social agency tenure rose from two years in 2018 to 4.3 years in the latest survey. Bruno Gralpois, co-founder of Agency Mania Solutions, said: “Becoming better partners isn’t a mindset shift, it’s an operational one” VideoWeek .
What this means for a small business
Read this study as a direction, not a rule. It covers large multinational advertisers, not small firms. We found no 2026 survey that measured how small businesses pay agencies.
The logic still carries over. A pay structure for a small business can borrow three parts from the big brands:
- A defined scope. List the outputs, such as four landing pages a quarter or one monthly report, with due dates.
- A fixed price for that scope. Agree in advance on how out-of-scope work gets quoted.
- A small bonus tied to results. Measure it in your own data, such as leads in your CRM or sales in your store.
Hourly pay is not wrong. It suits open-ended work, such as ongoing advice, where outputs are hard to define. If you stay on an hourly retainer, ask for a monthly time report that ties hours to deliverables. Compare it with the work you received, and ask how AI tools have changed the hours.
Write a clear brief too. Brands in the WFA study scored it far above financial incentives. A one-page brief with goals, budget, audience and deadlines costs nothing to write. Our guide to marketing agency pricing explains the common fee models and what each one rewards.
Ready to compare agencies? Start with the 2026 agency index. It scores agencies on proof of results, senior attention, AI search readiness and accountability. Build a shortlist there, then ask each finalist how it prices its work.
Pay models are not the only change at agencies this year. Buyers are acquiring small digital agencies, and Meta’s automated ad products now handle targeting and placements by default.
Questions to ask your agency
- What outputs does our monthly fee buy, how many, and by when?
- How has AI changed the hours you spend on our account, and has our price changed to match?
- Can part of your fee depend on results we measure in our own data, such as leads or sales?
- How much of your fee will you put at risk, and what bonus do you earn for hitting the target?
- What do you need in our brief to do your best work?
- How do you price work outside the agreed scope?
Frequently asked
How do most big brands pay their marketing agencies now?
A September 2026 WFA survey of 69 multinationals found 33% use fixed-fee or output-based pay as their main model, up from 20% in 2011. Labor-based fees, billed by hours or staff time, fell to 19% from 54%. Labor plus performance pay rose to 21% from 9%.
Should I pay my marketing agency a performance fee?
A small performance bonus can work if you measure results in your own data, such as leads in your CRM or sales in your store. Big brands still keep performance pay small. In the WFA survey, 67% to 80% of respondents across most disciplines said it makes up less than 20% of total agency pay.
How is AI changing agency fees?
AI lets agencies finish many tasks faster, which makes hours a weaker measure of value, according to the WFA. In its survey, 20% of brands had already changed their commercial model in response to AI and 61% intend to.
Do these findings apply to small businesses?
Not directly. The survey covers large multinational advertisers with $147 billion in combined marketing spend. We found no 2026 survey that measured how small businesses pay agencies, so treat the WFA results as a direction of travel.
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