Time to scale-up: How 861 agencies are driving disproportionate sector growth

While there is often a lot of attention on startups and new agency launches, our latest analysis reveals that a small group of scale-up agencies are driving disproportionate economic impact across the UK’s marketing, advertising, creative and media agency sector. These 861 agencies represent just 3.4% of all active agencies, yet their influence can help us understand where growth and value creation is happening with the agency sector.

Rather than explosive, early-stage expansion that captures headlines, these are established businesses that have sustained growth over multiple years whilst building substantial operations. For anyone interested in where sustainable success emerges within our sector, understanding the scale-up landscape offers some crucial insights for policymakers developing the UK’s Industrial Strategy within the Creative Industries, investors seeking acquisition targets, and for agencies themselves. 

What defines a scale-up agency?

The scale-up classification, based on OECD definitions and implemented by our partners at The Data City, requires agencies to meet stringent criteria that separate genuine sustained growth from short-term expansion. Agencies must demonstrate: 

• At least four years of employment data with ten or more employees
• Maintain this threshold throughout the measurement period 
• Achieve average annual growth rates exceeding 20% over at least three years.

This definition captures something fundamentally different from both startup growth and large agency stability. Scale-ups have moved beyond the survival challenges that define early-stage agencies, yet maintain the growth momentum that distinguishes them from mature, stable businesses. Across the more than 25,000 agencies we have mapped, there are 861 that meet these criteria: 3.4% of all active agencies in the UK. 

How significant is the economic impact of scale-up agencies?

The economic impact of scale-up agencies extends far beyond their 3.4% share of total agencies. These 861 companies employ 26.1% of the entire agency workforce and generate 24.5% of total sector turnover, demonstrating remarkable efficiency in converting growth into economic impact while maintaining the criteria for being defined as a scale-up company. 

Interestingly, their gross-value-added to the economy, as measured by GVA-per-head stands at £86,598, marginally above the sector average of £86,267, suggesting that rapid growth hasn’t come at the expense of productivity. This challenges the assumption that high-growth agencies might necessarily sacrifice operational efficiency for expansion.

The concentration of economic activity among scale-ups raises important questions about sector dynamics. Are these agencies accessing opportunities unavailable to others  or do they represent a model that more agencies could potentially replicate, given the right conditions and support?

Who becomes a scale-up agency?

The demographics of scale-up agencies reveal intriguing patterns about leadership and timing within high-growth businesses. Women represent 26.5% of directors in scale-up agencies, notably lower than the sector average of 30.7%. This gap suggests potential barriers to women-led businesses accessing the resources, networks or opportunities that enable sustained rapid growth.

Scale-up agencies cluster strongly in the 7-9 years age bracket, representing 32.1% of all scale-ups compared to just 17.7% of agencies sector-wide. This timing suggests there may be an optimal window for achieving scale-up status, after agencies have established market position but before growth rates typically moderate, and raises interesting questions about when in the agency lifecycle leaders are putting the energy into accelerating growth.

By definition, all scale-up agencies employ at least ten people, but their distribution reveals interesting patterns. The largest concentration sits in the 21-50 employee range (39.1% of scale-ups), followed by 11-20 employees (31.3%). Remarkably, 6.7% of scale-ups employ more than 250 people, demonstrating that some have sustained exceptional growth well beyond medium-sized business thresholds.

Which specialisms drive scale-up success?

The subsector distribution among scale-up agencies differs from the agency sector as a whole, suggesting that certain specialisms may be more conducive to sustained rapid growth. Digital services lead scale-up representation at 25.8%, compared to 21.4% across all agencies, while Search and performance agencies represent 14.4% of scale-ups versus just 6.4% sector-wide.

The most striking concentrations appear in newer, more specialised areas. 

Influencer agencies represent 4.5% of scale-ups but only 1% of all agencies, while Amazon/Marketplace agencies account for 2% of scale-ups versus 0.6% sector-wide. Social purpose and sustainability agencies show similar over-representation, comprising 2.4% of scale-ups against 0.8% of all agencies.

When examining the proportion of agencies achieving scale-up status within each specialism, Influencer leads at 15.1%, followed by Amazon/Marketplace at 11.7% and Data and marketing analytics at 11.3%. As a reminder, across the sector as a whole, 3.4% of all agencies are classified as scale-up agencies. These figures suggest that emerging, technology-enabled specialisms offer more scalable business models than traditional agency services.

Conversely, established creative services show lower scale-up rates. Just 1.8% of Design and branding agencies achieve scale-up status, while Website and UX/UI design, despite being the largest subsector by agency numbers, shows only 1.7% scale-up representation.

Where do scale-up agencies cluster?

The geographic distribution of scale-up agencies reveals pronounced concentration patterns that could have important implications for regional development policy. London hosts 73.4% of all scale-up agencies, significantly higher than its 47.4% share of agencies overall. This suggests that the capital’s business environment, access to talent and client proximity may be particularly advantageous for sustaining rapid growth.

However, several regions demonstrate above-average scale-up activity relative to their size. Wales and Northern Ireland both show 4.5% of their agencies achieving scale-up status, compared to the national average of 3.4%. The North East (4.3%) and North West (4.1%) also exceed national averages, suggesting that certain regional hubs may offer specific advantages for agency growth.

Location quotient analysis, which measures scale-up concentration relative to population, reveals interesting clusters outside traditional creative centres. Guildford leads with a location quotient of 2.2, followed by Bristol at 2.1 and Swansea at 2.0, indicating these cities host twice as many scale-up agencies as their population would suggest they should.

Edinburgh (1.7), London (1.6), Norwich (1.5) and Manchester (1.5) also demonstrate above-average scale-up concentrations. Notably, Glasgow, identified as a creative industries cluster in the UK’s Industrial Strategy, shows a location quotient of 0.8, suggesting fewer scale-up agencies than expected for a city of its size.

What implications emerge for the Industrial Strategy?

The scale-up agency landscape offers valuable insights for policymakers developing the UK’s Industrial Strategy for the Creative Industries. The concentration of scale-up activity in London, while concerning from a regional balance perspective, demonstrates that sustained high growth in creative services remains challenging outside established business centres.

However, the emergence of scale-up clusters in cities like Bristol, Guildford and Swansea suggests that with appropriate support, regional centres can nurture exceptional agency growth. The Industrial Strategy’s emphasis on creative clusters and regional development could particularly benefit from understanding what conditions enable these outlying successes.

The specialisms driving scale-up success also align with the Industrial Strategy’s technology and innovation priorities. The over-representation of data analytics, digital transformation and emerging platform-focused agencies among scale-ups suggests that technology-enabled creative services offer more scalable growth models than traditional agency disciplines.

For the Creative Industries Sector Plan’s goals of increasing business investment and productivity, scale-up agencies represent both a success story and a template. These businesses have demonstrated that sustained rapid growth is possible within agency models, yet their concentration in specific locations and specialisms suggests barriers may prevent broader adoption of these approaches.

What opportunities does scale-up analysis create?

For investors and acquirers seeking high-growth agencies, the scale-up dataset provides unique market mapping, universe definition and target list refinement. These agencies have demonstrated sustained performance over multiple years, reducing investment risk compared to earlier-stage opportunities whilst maintaining growth momentum that larger, stable agencies may lack.

Service providers targeting the agency sector can similarly benefit from understanding scale-up characteristics. These agencies employ more than a quarter of the sector workforce and generate nearly a quarter of turnover, representing concentrated purchasing power and well-developed and defined service requirements.

The geographic and specialism clustering of scale-up agencies also creates opportunities for targeted business development, partnership formation and regional economic development initiatives that align with demonstrated growth patterns, rather than assumptions about sector distribution.

Scale-up criteria is a hugely valuable data signal, and just one of many that we combine to not only analyse current trends and developments in the sector, but also to find specific agencies for investors, mergers and acquisitions, corporate development teams and agency leaders.

If you would like support in mapping high-growth and scale-up agencies, exploring target segments or testing an investment thesis, then please get in touch.

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