People
People
John Miles
Partner & Managing Director - London
We predict outcome-based pricing will not become dominant in 2027, but brands will ask for it in more pitches, renewals and procurement reviews. We expect performance-linked fees to become a standard request in global creative and media reviews and procurement to ask agencies to put a defined share of margin at risk. Agencies that use 2027 to move to mixed labor-and-performance models, and to build the measurement those contracts need, will negotiate from strength when those requests arrive.
Agency pay models have been overdue for reform for years, and 2027 is when the pressure starts to bite. Budgets are flat, technology is rewriting how agencies work, and agencies can no longer justify fees brands cannot see inside. Appetite for change is real and dissatisfaction with current models is widespread across both agencies and brands. To prepare, agencies need to do three things in 2027: reprice around value rather than hours, unbundle their offer so the right parts can be tied to results, and build measurement both sides trust before signing outcome terms.
Key themes
Why we believe our prediction to be true
Coca-Cola set the template in 2008 with value-based performance overlays separating cost recovery from profit. Little has moved since, but pressure is mounting: 63% of brands expect to increase performance-based pay in coming years.
Three forces collide in 2027: AI is rewriting agency economics (work isn’t measured in hours), brands have unprecedented data on customer response, and agencies are evolving integrated offerings. The old hourly model breaks when AI cuts hours faster than it cuts costs.
How we expect it to play out in the market
AI commoditizes production, media buying, account handling, and reporting—but barely touches strategy and creative ideation. Brands will demand AI efficiency savings passed through at 2027 renewals, forcing agencies to price judgment, data, and measurement instead of time.
The hybrid emerging as default: base fee + project/sprint fees + performance fee (Coca-Cola model). Unbundling is accelerating—holding companies folding agency brands into single operating units with defined scope and agreed success measures.
Agencies treating AI as a pricing enabler (like Monks’ subscription model) are shifting to outcome-based faster than cost-cutters. The critical blocker isn’t fees—it’s measurement infrastructure. Agencies and brands must agree which outcomes count, over what period, and who funds the measurement (marketing-mix modeling, geo-based testing, clean rooms, agreed baseline).
Brand-side data ownership is likely long-term; agencies deciding measurement approach now avoid inheriting unfavorable terms later.
Bringing the market along
This requires operating model change, not contract adjustment.
Agencies entering 2027 renewals should bring cost-to-serve visibility by service line, a three-part fee structure, and a measurement proposal.
Brands should define outcomes and baselines before reviews open. First movers set remuneration terms for the decade.
Meet the experts
2027 Media & Entertainment Industry Predictions Report
The media and entertainment industry is entering its next phase of transformation. As AI reshapes operating models and economics, businesses across the sector are under growing pressure to turn attention, investment, and innovation into sustainable value. Click through to explore the six shifts we believe will shape the year ahead, and the opportunities they create for businesses ready to act.
Learn more about AlixPartners' Media & Entertainment Report in our other chapters
