Multinationals Have Shifted Agency Payment Models
Global companies are increasingly adopting performance-based and fixed-fee structures over traditional labor-based systems.
Updated on Sept. 28, 2026 in Advertising
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Multinational companies have significantly moved away from labor-based payment models for their marketing agencies, with usage dropping from 54% in 2011 to 17% today. Brands are now prioritizing output-based and performance-aligned fee structures to ensure better alignment with specific work delivered.
Why it matters
The shift aims to better align agency compensation with measurable outcomes and specific work delivered, particularly as AI technologies enable agencies to produce more work in less time. Brands are seeking increased value and clarity in their high-stakes global marketing contracts.
Labor-based models have fallen from 54% of market share in 2011 to just 17% today, while labor-plus-performance models rose to 23%. Current agency compensation is increasingly driven by fixed-fee or output-based models, which now account for 35% of all agency contracts.
The players
WFA
The World Federation of Advertisers is an international organization that represents the interests of global brands and marketing procurement professionals.
The details
Brands are moving toward performance-based remuneration to capitalize on efficiencies gained through AI, though only 20% of respondents have evolved their commercial models specifically in response to AI. Despite the shift, only 45% of brands report sufficient transparency into agency costing and profitability.
Timeline
2011 served as the baseline year when 54% of companies utilized labor-based payment models.
2018 marked the start of the measurement period for agency tenure lengths.
September 2026 saw the official release of the current WFA research findings.
Market Landscape
The global marketing sector is experiencing a structural pivot away from legacy hourly labor billing toward outcome-driven and value-based partnerships. This shift positions companies to better leverage high-speed digital and AI-driven production tools while standardizing agency tenure lengths.
The transition to output-based and performance-based billing means clients may see more standardized pricing for specific marketing deliverables rather than variable hourly rates. Brands are also experiencing longer partnerships, with paid social agency tenure now averaging 4.3 years.
The takeaway
Brands are increasingly prioritizing transparency and measurable results as they navigate a new landscape of agency compensation. Marketing procurement teams that align fees with specific outputs are better positioned to extract value in an era of AI-enhanced agency productivity.
Further reading
For more information on the evolving trends in global media buying and contracts, visit our Advertising section.
Live Poll
Do you believe paying agencies for performance results leads to better work than paying for time?
