The answer to this question is likely that not many people know, nor care, and it’s better that way. It’s perhaps the Billability Addicts that care the most – i.e. those who apply a simplistic supply-chain efficiency mindset to the process of ideation and creativity by billing by the hour. 

Whilst fiscal discipline is of course necessary to profit from creativity and Billability Addicts may mean well in justifying their fees to skeptical clients, tracking productivity and mitigating over-servicing, their simplistic approach inflicts grave wounds on the craft of developing communication: it punishes agencies who do better work in less time, it prioritizes projected time over quality, it distorts the disciplined process required to develop effective content and ultimately it damages clients’ trust in our ability to add value. That’s because selling value to clients by the hour ends up commoditizing hours – not skills – resulting in content that creates wedges rather than bridges between our clients’ brands and the audiences they hire us to persuade.

Leaders vs. Billability Addicts

As marketing communication is ultimately about selling ideas that sell, it will only be the Leaders in our industry who choose to concern themselves with charging for the value they add who will thrive. That’s because Leaders recognize that whilst billing by the hour has a role in protecting day-to-day profitability, its use as a client-facing sales scheme distorts the understanding of our product and will ultimately be the swan song of profitability in the long-run. Scopes of work broken down into purchasable hours drives clients to allocate budgets based on the process, not the final product.  Case in point: let’s say a campaign that takes 50 hours to compose generates AED5 million in sales, versus one that generates AED10 million but only takes 5 hours to finish; the former is considered a greater success to the Billability Addict! That’s because the Billability Addict’s goals have little to no link to the clients’ goals!

Given the development of automated services and technological advances that have replaced many traditional jobs, the billable hour model is a short-term growth strategy that is unable to address the industry challenges of our times, namely: our clients’ need for clearer links between marketing spend and profit margins, the significant increase in clients’ in-house talent acquisitions, clients’ adoption of in-house tools and the sharp decrease in volume of retainers, to name a few. These shifts all point to clients’ growing demand for greater control over the quality of the work.

Sales-scheme vs. Internal Tracker

We can keep planning for the likely and accounting for the now, at our peril. Of course, the billable hour model is useful to help the agency measure resource capacity and mitigate over-servicing. However, relinquishing it as a sales scheme pushes agencies to move from thinking tactically to working strategically because with the absence of hours, agencies would be forced to present business cases to clients and not hide their inability to do so behind hourly rates.

Just like a Rolex’s value isn’t gauged by the cost of its pieces and hours of creation but by the skill and craftsmanship of its creators, our industry sells ideas, not processes. If the value of a luxury watch were to be broken down to customers into hourly rates (blended or otherwise) the watch brand would face an existential threat. By the same token, the Billability Addicts in our industry who masquerade inability with business acumen pose an existential threat to the health of our industry.