The Agency by Agency Atlas 2026 Agency age

When looking at the results for those agencies who survive long enough to reach maturity, we can see how experience compounds over time. But with the rate of new agencies entering the market slowing, it remains to be seen what the longer term impact of this slowdown will be.

Rate of agency formation has fallen since 2019

Our data shows that the agency sector is a reasonably mature market, with more than half of all agencies we have mapped more than ten years old. This can be at least partly explained by the drop-off in new agency creation since 2019, the peak year we have mapped for new agencies being founded. The fall off in the years that have followed, a period characterised by the pandemic, economic downturn and disruption by AI and new technologies, suggests a major change in how the sector renews itself.

Whether this reflects a generation of potential founders choosing not to start, an environment that makes starting harder, or a maturing sector that is consolidating around established players in turbulent times, the implications for future agency sector renewal could be significant.

How the sector is distributed by age

Agencies founded within the last five years account for 16.1% of the sector, while those aged six to ten years make up 30.2%, meaning agencies within their first decade account for nearly half of all active agencies. At the other end, 30.1% of agencies have been operating for sixteen years or more. The distribution is broadly balanced between younger and older cohorts, but set against the formation data above, the balance is shifting as fewer new agencies enter the market.

Older agencies employ more people… and generate the vast majority of sector turnover

Less than a third of all agencies are over sixteen years old, but these agencies account for 51.6% of the sector workforce. In contrast, the youngest agencies account for 16.1% of active businesses in the sector but just 8.8% of employment.

Something similar can be observed when it comes to overall share of turnover by agency age. Here, the oldest agencies are responsible for almost two-thirds of total sector turnover (61.4%), with only 3.9% of sector turnover generated by agencies up to five years old, even though they account for 16.1% of active businesses. 

This is not unusual in a professional services sector, as client relationships, reputation and scale take time to build. But it does raise some questions around the growth pathways available to younger agencies, and whether the conditions for reaching maturity are becoming harder to navigate.

Turnover-per-head significantly rises with age

Of course, if older agencies are employing more people they are larger and likely to be generating more turnover, but the turnover-per-head data also shows that age has an impact here too. Agencies that are sixteen years old and over have an average turnover-per-head of £153,750 compared to £56,933 for the youngest agencies and against an overall sector average of £129,049.

While this may suggest the cumulative advantages of maturity, from deeper client relationships to higher retainers and more efficient operations, we always need to be cautious with turnover figures. The turnover of media agencies, for example, can often include third party advertising spend. If these agencies tend to be older, and larger, it will have an influence on the data for this cohort of companies in comparison to their younger counterparts.

Age less important when it comes to productivity data

As we established in chapter one of the Atlas, across all agencies we have mapped, the estimated GVA (Gross Value Added) per employee stands at £94,452. Unlike with turnover-per-head, there is not such great variation when it comes to estimated GVA per head in agencies of different ages: £88,358 for agencies up to five years old, rising gradually to £91,658, £95,112 and £95,581 for successively older groups.

Where turnover per head nearly trebles between the youngest and oldest cohorts, GVA per head rises by less than 10%. This suggests that older agencies’ higher turnover is partly a function of pass-through costs and inputs rather than purely added value, and that younger agencies, despite lower revenues, are generating economic value at a rate closer to their elders than the turnover data implies.

Young agencies are growing faster, mature agencies have higher likelihood of stability

As might be expected when considering the average lifespan of an agency, the younger the company is, the faster it is likely to be growing. Agencies up to five years old have an average growth rate of 8.9%, compared to just 0.6% for the most established agencies and a sector average of 3.5%

Of course, within any age bracket, the growth will not be spread evenly and our growth traffic light allows us to explore the impact of agency age on growth in more detail.

Here we can see that the group of youngest agencies have the highest proportion that are Growing Fast, with 19.5%. At the same time, this cohort also has the highest proportion of agencies that are Shrinking Fast (4.2%). Older agencies tend to be more stable, with almost three quarters (74.0%) of agencies sixteen years old and over classified in this way, although they also have the highest proportion of agencies that are Shrinking and Shrinking Fast (12.5% combined).

Investment flows to older agencies, but innovation is a more mixed picture

Overall, when looking at total investment funding by agency age, we can see that the vast majority of funding has been received by agencies 16+ years old, at 78.5%. By contrast, although 16.1% of all agencies are up to 5 years old, these agencies only account for 3.2% of total investment funding.

Although the youngest of agencies are also not the recipients of Innovate UK grant funding proportion to their share of the agency sector, things are a bit different in the other age categories. Agencies aged 6 to 10 years account for 30.2% of active agencies and 34.8% of Innovate UK grant funding. Agencies aged 16+ years receive the most Innovate UK funding, with 49.2% of grants going to this cohort. 

That younger agencies are underrepresented in Innovate UK funding is something worth considering. This could be primarily a question of awareness, in that newer agencies might not know these funding streams exist or they have other priorities than navigating application processes that can be time-consuming and complex. It could also be a question of eligibility, with grant criteria favouring track record, existing innovation infrastructure or match-funding capacity.

Younger agencies might have a different strategic focus, orientated towards client acquisition and survival, rather than innovation projects with longer time horizons.

Agency age and questions for the sector

The age data in this chapter raises one fundamental question that should be of interest to everyone engaged with the agency sector: what happens when the pipeline runs dry?

The fall-off in new agency formation could have an impact for those implementing the Industrial Strategy’s Creative Industries sector plan, as innovation in any sector depends on the entry of new businesses that can challenge established models. If the conditions for starting an agency have become markedly harder, then the strategy’s ambitions for the creative sector as a whole needs to engage directly with the formation question and not just the scale-up one.

For investors and those considering M&A activity, the concentration of both turnover and private investment in the oldest cohort suggests that the sector might be consolidating faster than it is renewing. And with a substantial proportion of those older agencies actively shrinking, it suggests a significant number of established businesses whose futures are uncertain. These trends also raise questions for both clients and agencies. Does consolidation make things simpler from a client perspective, or will it result in a more homogenous sector? And for existing agencies: is there a benefit to a less competitive environment with fewer players?