Singapore agencies shift to revenue sharing as AI cuts costs
Marketing firms in Singapore are replacing fixed retainers with revenue sharing arrangements as artificial intelligence deployment lowers production costs and boosts staff output
Singapore marketing agencies are transitioning toward revenue sharing models as artificial intelligence decreases operational costs and increases productivity. Traditional advertising agencies charge clients fixed monthly retainers regardless of results, a model that AI is disrupting. Administrative tasks, such as invoicing, quotations, reporting, campaign documentation, scheduling, and follow-ups, can now be largely automated, significantly reducing overhead costs.
In production, AI handles editing, syncing footage, generating captions, and preparing ad-ready variations, reducing the time and cost required for video and design work. As a result, a small team's production capacity is multiplied, and the cost per campaign falls. This shift allows agencies to pass on lower costs to clients in the form of a minimal base fee, earning a share of the sales generated by their campaigns.
Touchmkt, a Singapore agency, exemplifies this model, charging small and medium-sized enterprise (SME) clients a low base retainer that covers production costs and then earning a 5-9% share of the revenue attributed to their campaigns. This revenue-based model aligns the agency's and the client's goals, as both succeed when the client's sales increase.
However, the revenue-sharing model requires strict attribution and risk absorption by the agency for underperforming campaigns. Nonetheless, for small businesses wary of paying retainers for activity rather than results, AI-driven revenue sharing represents a clear direction for the future of marketing.
Written by urgent.news from Vietnam Investment Review's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
