Davidson: It’s time for Naked 2.0

The economics of media are changing faster than the commercial models that govern them. AI and automation are collapsing the cost of execution. Machine-driven campaign management, optimisation, and reporting, work that once required significant human resources is becoming faster, cheaper, and more scalable.

That is genuinely good news. But it raises an uncomfortable question for the traditional agency model: if the cost of doing is falling rapidly, what exactly are clients paying for?

The honest answer is that most clients are still paying for a bundled model designed for a different era, one that doesn’t distinguish between the value of thinking and the cost of doing and has no mechanism built in for passing on the efficiency gains that automation delivers.

Two very different things, priced the same way

The traditional agency retainer bundles two fundamentally different kinds of work into a single fee: thinking and doing. Strategic planning and channel recommendation on one side. Campaign execution, platform management, optimisation and reporting on the other. Both valuable. Both necessary. But not the same thing and increasingly, not worth the same money.

Machine-driven execution lends itself naturally to output-based pricing. Pay per campaign, per asset, per buying cycle.

Strategic thinking is the opposite. It is differentiating, and it is the one thing in the media business that a machine can’t replicate. Genuinely original thinking has never been more valuable. As AI standardises the outputs of agencies running the same briefs through the same tools, the thinking layer becomes the only real source of competitive advantage. It deserves to be ring-fenced, elevated, and priced accordingly, a premium retainer that reflects its value, completely decoupled from what happens in execution.

When thinking and doing sit inside the same commercial relationship, the thinking gets compromised. Fees tied to platform spend push planning toward programmatic. Principal-based arrangements are recommended because the agency profits from the inventory. None of this requires bad intent; it’s simply what happens when the same agency is paid to recommend and paid to execute.

The answer is to unbundle them. Price execution on outputs — transparent, measurable, aligned to actual cost. Compensate strategic thinking on a premium retainer with no link to spend and no incentive to favour one channel over another. Just the commercial freedom to give the best possible advice.

AI and automation make the once-legendary Naked model not just viable, but essential today.

This is not a new idea. Twenty years ago, Naked Communications proved it could work — a planning agency built entirely on independent strategic advice, free of the financial incentives of execution. It grew fast and was eventually acquired and absorbed back into the very system it set out to challenge. The model worked then. The economics of AI and automation make it not just viable but necessary now.

The moment is now

The conditions for Naked 2.0 have never been more favourable. The technology disrupting the execution model is also making independent strategy/ planning options more viable than ever. Clients are more commercially sophisticated and more willing to challenge the status quo. Even WPP CEO Cindy Rose acknowledged it publicly this month, committing to moving WPP away from time and materials billing in what she called ‘the beginning of a more widespread commercial model evolution.’

A new commercial model isn’t complicated. Pay for execution on outputs. Pay a premium for the thinking. Separate the two so that neither compromises the other.

Someone is going to build this. The only question is whether it comes from a brave independent, a consultancy moving downstream, or a creative agency that already has strong strategic muscle. The real mystery is why it hasn’t happened already.