Why Agencies Are Losing 15-40% of Billable AI Work Hours

An Auckland-founded startup wants to put an end to the agency timesheet. Manifest launched on April 29, 2026, with US$2 million in pre-seed funding to build what it calls an "operational intelligence" platform. The idea is simple: instead of asking people to self-report what they did each day, the software tracks how work actually happens across teams, tools, and AI systems in real time.

The pitch lands at an awkward moment for the agency world. AI tools are used by 73% of workers but account for just 4% of work time that gets officially tracked. That gap is not just a reporting inconvenience. It has become a structural problem for any agency trying to figure out what work costs and how to price it.

The Problem Timesheets Cannot Solve

Traditional timesheets were designed for a simpler era. A person sat down, did a task, logged the time. That model was already imperfect before AI arrived. Now it is close to useless.

The average focused work session in modern agencies has dropped to just 13 minutes and seven seconds, down 9% since 2023. Work gets done in short bursts, across multiple tools, sometimes with AI completing tasks that once took hours. Nobody accurately logs any of this. Agencies are losing an estimated 15% to 40% of billable hours to these tracking gaps alone.

"Agencies are operating on a model that no longer reflects how work happens," said Freddie McKenzie, CEO and co-founder of Manifest. "As agencies adopt AI, the gap between how work actually happens and how it's measured is widening. You can't price or optimize for outcomes if you're still only measuring self-reported hours."

McKenzie previously built and sold Auckland-based creative production company VIVID Creative. He co-founded Manifest with Henry Collinson, a product leader, after the two began rethinking how work should be tracked during the pandemic. Their CTO, Tom Reid, is an ex-Microsoft AI veteran who built Manifest's proprietary AI model with a focus on privacy and enterprise-grade security.

Why the Timing Matters for APAC Agencies

Asia Pacific is feeling this tension more acutely than anywhere else. BCG research shows 78% of APAC workers use AI tools at work weekly, compared to 72% globally. Yet only 57% of organizations in the region are actively redesigning their workflows to reflect this change. There is a growing disconnect between how much AI is actually being used and how much of that use is being tracked or priced.

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The funding round was led by Brand Fund by Previously Unavailable, an Auckland-based investment fund with a portfolio that includes Tracksuit, Ideally, and Appetise. Antler, Icehouse Ventures, Techstars, and the Huljich and Bhatnagar family offices also participated.

"Manifest solves a massive problem for services businesses: how do you track, value, and charge for work in an AI-enabled world?" said Simon Pound, co-CEO of Previously Unavailable and general partner of Brand Fund.

A Pricing Problem at the Industry Level

The stakes here extend beyond software. The agency billing model itself is under pressure. As teams use AI to work faster, the hourly rate model punishes efficiency. What Haus Advisors calls the AI Efficiency Penalty means that revenue per project shrinks when AI speeds up delivery, unless agencies change what they are selling.

WPP, the world's largest advertising group, has already told investors it is moving away from hours-based pricing toward output and results-based models. For that transition to work at the operational level, agencies need accurate data on what AI is actually contributing to each project. That is the infrastructure gap Manifest is building toward.

The company is initially rolling out across Sydney, Melbourne, and Auckland, with a broader Asia Pacific expansion planned as the product matures.