To say it has been a challenging time for agencies would be an understatement. Between budget cuts and the pressure to deliver with limited resources, it has been a tough market. And when we started to put together the UK Agencies Benchmarking Report (which you can find here), we weren’t surprised to see that sentiment said from agency after agency. Check out our full assessment of marketing agencies in the UK.
However, we’re also here to say there were plenty of positive silver linings once we dug a bit deeper into the data. As always, our report showcases a set of league tables to demonstrate the biggest and best agencies in the UK – from the fastest growing agencies to specialists in brand, content and much more.
Before we jump in, it’s important to note that we asked agencies to provide us with financial data from their most recently closed financial year. 30.9% of agencies end their financial year in December, 26.2% end their financial year in March and 13% end theirs in May. Only a handful of agencies said theirs ended in the remaining months. With that in mind, as much as we would like this to be the case, not all of the data collected is from exactly the same period.
Data collection began in September 2024, and so the majority of the data we’re discussing is approximately from March 2023 to March 2024, and December 2023 to December 2024 (those whose financial year ended in December were offered an extension to ensure their accounting was complete). It’s worth noting at this point that this is the case with every year’s iteration of this report, so the year-on-year comparisons still provide a reliable way of seeing trends over time.
However, apart from the financial data and headcount, the other challenges stated in this report are very much ‘in the present time’ so we can ensure this is up-to-date.
In addition, to guarantee there can be no doubt around the accuracy of the data we present, accountancy firm Moore Kingston Smith have partnered with us to ensure all figures are accurate and trustworthy.
So what’s the state of the agency marketplace looking like? If you’re a client-side marketer, we hope this feature gives you some insight into the market you might be delving in. On the other hand, if you’re an agency, this feature will give you a better comprehension of where your agency stands compared to your competitors.
Gross income has increased YoY for the first time in a while
Before we get started, it’s worth noting that in our 2024 edition, we managed to include 106 agencies whereas in 2025, we’ve included 83 agencies. Of those 83, a higher percentage of agencies were smaller.
While some might argue this could be due to the rise in automation or budget cuts, we noted that smaller agencies have been featured in the league tables for the past few years. And some of the larger ‘heavyweights’ were notably absent in this year’s tables due to having a tougher year than usual.
We saw a 5.3% increase in the most recent financial year’s gross income from £5.4 million in the previous financial year to £5.7 million. This is certainly a step in the right direction. Considering the average gross income was £5.6 million in 2023, £5.91 million in 2022, and £5.92 million in 2021, this indicates a long-term and somewhat inconsistent economic impact from Covid-19 (as much as people want to forget).
While there may not be a steady rise to growth in the last few years, an increase in gross income certainly indicates we’re on the right track. And agencies agree as well – 72 out of 83 agencies expect either growth or strong growth in the next 12 months.
On the flip side, 45 agencies said they’re finding the current state of the market for B2B marketing services to be challenging. So while 86.8% of agencies are predicting growth, they’re also fully expecting it to be set with a plethora of obstacles along the way. One of these hurdles?
Well, we asked agencies what their most significant challenge currently was, and overwhelmingly, they said their #1 challenge was the pressure on client’s budgets. A whopping 84% said it was either a significant or very significant challenge, which doesn’t come as a surprise as agencies cited this as their most significant challenge last year as well.
Pitch not so perfect
In the last 12 months, there was an average pitch rate of 31.5 meetings. The average pitch rate success was 52.4%. When we looked at last year’s data, we noticed that the average pitch win rate for agencies was 57% – considering there was an 8% decrease in win rates, this could suggest that a lot of meetings are being had only for them to lead to a win only half the time (seems like a wasted effort). With that being said, perhaps we should be moving the needle beyond the traditional pitch meeting.
David van Schaick, former CMO, Marketing Practice and an Agency Expert for Propolis, commented on this saying: “Agencies are increasingly careful about if and when they choose to pitch because the investment that goes into a pitch is significant and often means business isn’t profitable in the first year. Pitches can be accompanied by a procurement process that often prioritizes cost over all-round value, putting more pressure on margins. Some agencies go as far as having a no pitch policy – they will obviously meet prospects and build proposals but they won’t go for staged pitches with 4+ agencies all bidding.
“There are a couple of things I think agencies are doing to win business without the traditional pitch process. One is focusing on customer-led growth, expanding within accounts or to net new prospects via referral. This is as old as the hills though so less likely to explain your reduction. I think what’s more plausible is agencies are increasingly positioning themselves as solvers of business problems, not simply a ‘creative agency’ or a ‘media agency’, and developing products that are built to solve specific business challenges for clients and can therefore be taken to market proactively, as would a product company.”
UK headcounts have decreased – what does this mean though?
Interestingly enough, while gross income rose slightly, we saw a 6.1% drop in headcount from 52.5 in the previous financial year to 49.29 in the most recent financial year. In 2023, the average headcount sat at 62. We also saw in our Propolis Community Index, our real-time dashboard which surveyed over 1000 B2B organisations, that marketing leaders are spending 2% less on people when comparing the 2024-25 period to the 2023-24 period.
Bearing that in mind, recruitment definitely adds another layer when it comes to overall headcount and retention. We interviewed several marketing leaders on this very topic in a podcast episode in association with HelloKindred (which you can check out here). In the conversation, they discussed how the traditional specs for recruiting have changed drastically with adaptability and a willingness to relearn at the forefront.
Roland Glass, Chief Commercial Officer, HelloKindred said: “One of the most important things that we must look at is the ability to unlearn, relearn and retool ourselves. We’re in a space of unprecedented change and transformation and at a rate of change that we’ve never seen before…Do they have the ability to adapt and be part of an environment that changes quickly?”
This notion seems to align with the data – we saw that 34 out of 83 agencies said the recruitment market for agency personnel and availability of good candidates is either challenging or extremely challenging – that’s nearly 41% of agencies that feel this way. In addition, a majority of agencies said it takes around two to three months to recruit the right candidate. Combine the efforts, time and the ever-changing checklist of qualities needed from candidates, and this does present an obstacle (one that doesn’t seem to be going away anytime soon).
A focus on retention leads to more positive work environments
Considering that, our data also indicates a strong effort towards a positive and productive working environment. This could be due to the fact that more than half of agencies surveyed expressed a focus on retention. For example, some 88% of agencies have taken on a flexible or hybrid working environment in the last two years, which indicates a strong finger on the pulse when it comes to what future employees might value in the workplace. In fact, according to a study by The Global Payroll Association, about 75% of candidates would turn down a job if it didn’t offer flexible or remote working environments.
To support this shift to overall employee wellbeing among agencies, we saw that 94% of agencies have focused their initiatives on team away days and 83% have implemented mental health awareness and support programmes – these were the two largest initiatives agencies have been focusing efforts on in an attempt to improve staff retention and recruitment.
DEI and upskilling are definitely a priority
With the US looking to potentially scale back on DEI initiatives following Trump’s return to office, it definitely might raise concern. However, sccording to a survey, there has been a 92% increased engagement with resources that outline the mandated DEI policies.
And when we look at last year’s figures, the UK has continued its rise in importance. 70 out of 83 agencies said they have some sort of DEI initiative in place – this included everything from reviewing hiring practices to reduce bias to assessing hiring practices and bringing on executive-level support. And as we know from previous research and interviews with B2B leaders, the more diverse a team is, the better they will inevitably perform.
Finally, another initiative that was prioritised was around external training – 52 out of 83 agencies are focusing on upskilling their employees to coincide with the ever-changing market. In fact, in a podcast with The Think Tank (leave link here once published), who won UK Agency of the Year at our B2B Marketing Awards – the team explained how they used creativity training to test out a few AI tools. This was to not only help enhance their team’s skillset but ensure they’re keeping up with the latest technology and trends.
Agencies are using AI; their clients? They need a bit more convincing
It wouldn’t be 2025 without mentioning AI, right?
We asked agencies what their approach was when it came to using AI to deliver on marketing campaigns. And the consensus? Every agency was using AI to some capacity. Around 59% said they were ‘Enthusiastic. We’re actively testing and trialling various things, and figuring out how it fits’. 29% stated that they were taking a progressive approach and that AI was already part of their proposition and deliverables. And the remaining 12% said they don’t have an AI strategy in place but that it was more of a case-by-case approach. In an ever-changing landscape, it’s good to see agencies have embraced AI to some degree.
We also asked agencies to describe how their clients were responding to AI and only 18% said clients were enthusiastic and eager to learn more about AI. While a majority of agencies said they were ‘open and reactive’ they also noted that they’re not actively pursuing AI. And 24 of the 83 agencies said clients leaned more towards the cautious side.
Perhaps there needs to be more education around AI so that cautious clients can understand potential AI regulations and open-minded clients can see how AI fits into their marketing activities or campaigns.
Interestingly enough, 59% of agencies also noted that it has been a challenge to harness AI to improve processes or impact. And the ability to prove its impact to clients can certainly be a contributing factor.
David commented: “Agencies have embraced AI. They’ve recognised that it’s going to change the game fundamentally, but also that it’s an emergent technology. We don’t know what the best use cases will be, we have to figure that out through experiments. That kind of innovation is well suited to agencies. They are used to moving quickly and they have the mindset to roll up their sleeves and get stuck in. The challenge they have is it does require investment in what is a tough market for them, so partnerships with clients will play a big role in funding innovation and moving the whole industry forward.”
Conclusions: What does it all mean?
We’re seeing a positive mindset with agencies around growth which is definitely a positive shift in the right direction. As we mentioned earlier, this year’s data showcased 83 agencies, which was 23 less agencies than the year prior. This was most likely due to agencies having a tougher year than usual, which explains why there was a reported YoY increase in gross income and a YoY decrease in headcount.
While they’re poised for growth in the future, they’re also understandably treading carefully due to the pressure on clients’ budgets, the challenges that exist with AI and a less than successful pitch rate.
And while there might be challenges, it’s clear that client-side marketers are going to be benefiting from the constantly evolving (not to mention talented) agency landscape.
The good news is that while headcount is down and the market hasn’t experienced an exponential growth, agencies are setting themselves up for success through recruitment, training and wellbeing initiatives – all of which can help agencies deliver to their client-side marketers more effectively.
What will 2026 have in store? Only time will tell.
