The Growth Report: Finding opportunity in 2025’s agency sector

With our Agency by Agency Industry Report (March 2025) we published an overall growth rate for the UK agency sector of 7.3%. It told an important story about resilience in challenging times. But headline figures only tell part of the story, especially in a diverse and dynamic sector such as ours. With our Agency by Agency Growth Report we dig deeper into the patterns that are shaping our sector. This is a complex landscape where size matters, location drives opportunity and specialisation increasingly drives success.

What emerges from our report is not a single story of growth, but multiple narratives playing out across the regions, subsectors and agency types. We explore the emergence of new subsectors and regional developments beyond the traditional centres. We see how a relatively small group of high-growth agencies operate alongside the stable majority that characterises the sector. And we offer insight into not only what is growing but why, where, and what it might mean for all of us working in and around the agency sector.

Executive summary

The Agency by Agency Growth Report explores growth in the sector in a number of ways, from the size of agencies to agency subsectors based on specialisms, subsector clusters, regional trends and what high-growth agencies look like.

Our key findings:

• Growth is concentrated among a relatively small minority of agencies with a high economic impact. Just over one-in-ten agencies are classified as high-growth while generating almost a quarter of total turnover and employing nearly a third of all agency staff
• Stability remains the dominant characteristic across the sector. Despite the focus on growth, more than two-thirds of all agencies fall into the Stable category, suggestion that whilst high performance captures attention, the majority of the sector continues to operate in a steady way
• Agency size creates a growth paradox. The larger the agency, the higher the proportion of Growing or Growing Fast agencies. At the same time, almost half of all high-growth agencies are in the 3-10 employee range, suggesting that success comes for those still able to pivot or who have close connections to their clients. The smallest of agencies dominate the sector numerically but show higher levels of stability rather than rapid expansion
• New specialisms are reshaping the sector. The subsectors with the highest growth rates are among the newest we have mapped or have the highest proportion of new agencies. Traditional strongholds of the sector are growing well below the sector average, suggesting a shift in where opportunity lies.
• Geographic growth is spreading beyond traditional centres, with Wales, Scotland and Northern Ireland all showing high growth rates, in regions with historically smaller agency populations
• The sector shows gender representation gaps in high-growth agencies, raising questions about access to growth opportunities and resources, as well as representation within subsectors
• Volatility accompanies high performance in some parts of the sector. Several regions and subsectors show strong average growth rates but also high proportions of both rapidly growing and rapidly shrinking agencies

Growth and the UK agency sector

For the purposes of this report, we are looking at growth in the UK agency sector in a couple of different ways. Our growth rates are provided by our partners at The Data City, based on the annual headcount and turnover growth of any given agency we have mapped. This allows us to look at growth rates across the sector in different ways, whether by size of agency, subsector (based on agency specialism) or region. Another marker of sector growth is the number of new agencies founded, both across the sector as a whole or within the subsectors or subsector clusters.

Growth rates across the agency sector

The overall growth rate for the UK agency sector stands at 7.3% (see our Spring Industry Report, March 2025). More than two-thirds of all agencies fall within the ‘Stable’ growth category, while a significant proportion (11.7%) can be classed as high-growth agencies with a rate of over 20%. As we will explore later in this report, these growth patterns appear to be strongly influenced by agency size, subsector specialism and location.

New agencies founded

Over the past ten years the rate of new agencies being founded has slowed since a peak in 2019. The fall in new agencies being born has stabilised in the past couple of years and despite the obvious impact of the pandemic and other factors that make for a turbulent and unpredictable agency sector, 17.5% of all active agencies have been founded in the past five years.

How agency size influences growth rates across the sector

Agencies come in all shapes and sizes, and for the purposes of our reporting, we measure agency size in two different ways: by headcount and by turnover. When exploring the data in our report, it is important to consider that we are moving towards a time where headcount – whether being used to measure size of agency or growth rate – may become less of an indicator due to the rise of AI adoption, fractional working and the increased use of freelancers.

Growth rates for agency size measured by headcount

When it comes to agency size as measured by headcount, we can see that the larger the agency, the higher the proportion of Growing or Growing Fast agencies there are. Indeed, 54.1% of agencies with a headcount of 251+ are growing at a rate of over 10%. The interval including the smallest agencies, with a headcount of 1-2, have both the highest proportion of Shrinking of Shrinking Fast agencies (12%) but also the highest proportion of Stable agencies, at 81.6%.

Growth rates for agency size measured by turnover

The trends are different when we look at agency size as measured by turnover. Here, the two intervals with the highest proportion of Growing or Growing Fast agencies are those with a turnover of £1m-£3m (48.1%) followed by £3m-£10m (47%). At the same time, the latter grouping of agencies with a turnover of £3m-£10m had the second highest proportion of Shrinking or Shrinking Fast agencies at 8%, meaning this was the interval with the most instability, with less than half of the agencies classed as Stable.

The highest proportion of Shrinking and Shrinking Fast agencies were those with a turnover of up to £500k at 11.3%, with this group also having the highest proportion of Stable agencies at 73.6%.

Growth in agency subsectors

So far we have mapped 29 agency subsectors across the agency sector. These subsectors are based on services offered / specialisms of the agencies we have mapped. When exploring our subsector data, it is always important to remember that – depending on what an individual agency does – it may appear in more than one of our subsector lists.

Subsectors with the highest proportion of new agencies

By exploring when agencies were founded, we can see which of our subsectors has the highest proportion of new agencies – which we have defined as those that have been founded within the past three years. The subsectors with the highest proportion of new agencies are Amazon/Marketplace (21.2%), SEO (20.7%), Digital product design (18.2%), Influencer (16.4%) and Behavioural research and behaviour change (16.1%).

The subsectors with the lowest proportion of new agencies, and which can perhaps be viewed as the most established of the agency subsectors we have mapped, are PR and communications (5.5%), Market research (5.5%), Design and branding (5.6%), Internal communications and employee engagement (6.3%) and Video and production (6.5%).

Subsector growth rates

When looking at subsector growth rates, it is important to remember that we only have growth figures for agencies that have been operating for at least three years. This means that subsectors with a high proportion of new agencies might also show lower growth rates, until those new agencies start to show in the data.

This makes it all the more remarkable then, for example, that Amazon/Marketplace – despite having the highest proportion of new agencies – has the second highest growth rate of any subsector at 20.4%. 

The subsector with the highest growth rate is the newest we have mapped, Social purpose and sustainability, with 22%. Other subsectors with growth rates far above the agency sector average of 7.3% includes Influencer (16%), Digital transformation (15.9%) and Data and marketing analytics (13.9%).

At the other end of scale are the subsectors with growth rates far below the agency sector average. These include Design and branding (2.8%), Creative and advertising (2.9%), Integrated and full service (4.1%), E-commerce (4.3%) and Internal communication and employee engagement (4.3%).

Growing, stable or shrinking within the agency subsectors

We can see a more nuanced picture across the subsectors when we divide each one up into the agencies that are Shrinking Fast, Shrinking, Stable, Growing and Growing Fast. The subsectors with the highest proportion of Growing/Growing Fast agencies (with growth rates of more than 10%) are Social purpose and sustainability (46.5%), Conversion (42.4%) and Amazon/Marketplace (41.6%).

The subsectors with the highest proportion of Shrinking/Shrinking Fast agencies include Brand strategy (14%), Translation and localisation (13.4%) and Market research (13.3%). The most stability in the sector can be found in Copywriting (79.7%), Internal communications and employee engagement (76.1%) and Design and branding (75.9%).

Growth and subsector clusters

As well as exploring each of our subsectors in turn (for example, via our Data Shots for benchmarking data to measure performance), we have also mapped what we are calling “subsector clusters” as a means of exploring general growth trends across the sector as a whole. These subsector clusters are created out of the subsectors we have mapped and have been defined as follows:

• Communications: Internal comms and employee engagement, PR and communications, Social media, Influencer, Translation and localisation
• Strategy and Research: Behavioural research and behaviour change, Brand strategy, Market research
• Creative and Content: Content, Copywriting, Creative and advertising, Design and branding, Video and production
• Digital and Technology: Amazon/Marketplace, Digital, Digital product design, Digital transformation, E-commerce, Website and UX/UI design
• Marketing Channels: Direct marketing, Experiential and events, Media
• Performance and Analytics: Conversion, Data and marketing analytics, Search and performance, SEO

New agencies in the subsector clusters

The subsector cluster with the highest number of new agencies (agencies less than three years old) is Performance and Analytics with 17.2%, followed by Digital and Technology with 13.5%. The subsector cluster with the lowest proportion of new agencies was Creative and Content, with only 6.4% of these agencies being founded in the past three years.

Growth rates across the subsector clusters

Some similar patterns emerged when looking at the growth rates across the subsector clusters, with Digital and Technology having the highest growth rate 10.1% – above the agency sector average of 7.3% – with Creative and Content having the lowest, at 3.3%.

Growth rates within the subsector clusters

A more nuanced picture emerges of the different subsector clusters when we look at the proportion of agencies that are growing, shrinking and stable. Digital and Technology had the highest overall growth rate, but when looking at the proportion of agencies with a growth rate of over 10% (classified as Growing or Growing Fast), this subsector cluster only came fourth out of six, with 21.4%. This suggests that the highest growth rates within that subsector cluster are concentrated among a smaller number of agencies, that nevertheless lift the cluster average as a whole.

The subsector cluster with the highest proportion of Growing/Growing Fast agencies is Performance and Analytics with 27.4%. The subsector cluster with the highest proportion of Shrinking/Shrinking Fast agencies is Strategy and Research (13.1%), with the highest proportion of Stable agencies to be found in Creative and Content, at 73.1% – offering a clue as to why this subsector cluster has the lowest average growth rate of the six subsector clusters we have mapped.

Regional growth analysis

For our reports, articles and insight, we can map the regional distribution of agencies in different ways. For this report, we are looking at growth across the regions of the UK, based on the ITL1 definition – International Territorial Level, used by the Office of National Statistics or ONS.

Growth rates across the regions

When looking at the regional clusters of agencies, we can see growth rates in many parts of the country that are much higher than the sector average of 7.3%. In particular, Wales (11.6%), Scotland (11.2%), North West England (11.1%) and Northern Ireland (10.8%) are showing particularly high growth rates. At the same time, with the exception of the North West, these are the regions with the lowest number of agencies and agency employees, suggesting that here there is a greater capacity for growth than elsewhere in the country, where the agency sector is more established.

Growth rates within the regions

Once again, exploring the growth rates within each region gives us a more nuanced picture. For example, Northern Ireland (with the fourth highest overall growth rate) has both the highest proportion of Growing/Growing Fast agencies (27.7%) and the highest proportion of Shrinking/Shrinking Fast agencies (12.3%), suggesting an unstable agency sector within the region. In contrast, Wales has both the highest overall growth rate as well as the second highest proportion of Stable agencies (71.6%), with only the South East (72.1%) showing a greater level of stability within the agency sector.

What do high-growth agencies look like?

We have defined a high-growth agency as one showing an annual growth rate of over 20%. The number of high-growth agencies we have mapped is 2,296 – 9% of all active agencies we have mapped. When we remove the agencies for which we have no growth data yet available (to calculate annual growth rates, we need at least three years of financial submissions), we can see that the percentage of high-growth agencies from those for which we have data is 11.7%. 

Of these agencies, 65% of high-growth agencies are under ten years old and they show higher productivity than the sector as a whole when measured by Gross Value Added, with a GVA-per-head of £78,441 compared to the sector-wide average of £77,399. 

Size of high-growth agencies

When looking at the size of high-growth agencies, as measured by headcount, and then comparing it to the sector as a whole, some interesting trends emerge. The interval with the highest proportion of high-growth agencies are those with a headcount of 3-10 (45.4%). Across the sector as a whole, agencies with a headcount of 3-10 account for 22.6% of all agencies. 

This can be observed across all the size (headcount) intervals with the exception of the smallest one. Agencies with a 1-2 headcount account for 62.8% of all agencies but only 12.5% of high-growth agencies. At the larger end, one in three (33.3%) of all agencies with a headcount of 101-250 are classified as high-growth, with an even greater proportion of the largest agencies – 36.8% of agencies with a headcount of 251+ – classified as high-growth.

The share of economic impact of high-growth agencies

Of the agencies for which we have growth data available, just over one-in-ten are classified as high-growth. And we can see that these agencies have an oversized impact on the sector that goes beyond the measurement of their growth rate.

These 2,296 agencies are responsible for:

• Total turnover: £8.2bn – 23.4% of the agency sector as a whole
• Total estimated GVA: £6.2bn – 30% of the agency sector as a whole
• Total number of employees: 78,000 – 29.7% of the agency sector as a whole
• Total investment funding: £232 million – 15.4% of the agency sector as a whole
• Total Innovate UK funding: £14 million – 39% of the agency sector as a whole 

In all cases, this cohort of agencies outperforms their share of the market when based on the number of active agencies.

Gender and high-growth agencies

In our Spring Agency Industry Report, we explored the proportion of agencies that are women-founded (at least one woman director who remains in post after the first year of operation), women-led (majority of directors are women) and the total number of active women directors across the agency sector as a whole.

In mapping the high-growth agencies, we can see that while 27% of all agencies are women-founded, only 20.1% of high-growth agencies are. Similarly, 19% of all agencies are women-led compared to 17% of high-growth agencies, and 34% of all agency directors are women compared to 28.6% of directors in high-growth agencies.

We will be exploring this subject in more detail in our forthcoming women in the agency sector report.

High-growth agencies by subsector

The subsectors with the highest number of high-growth agencies are Website & UX/UI design (635) and Digital (616). These are two of the largest subsectors overall when it comes to the number of active agencies, so it is unsurprising that they have a large number of high-growth agencies within them.

When looking at each subsector in turn, we can see that 10.3% of Website & UX/UI design agencies and 13.4% of Digital agencies are classified as high-growth. There are other subsectors with a much higher proportion of high-growth agencies within them, including Amazon/Marketplace (33.7%), Influencer (27.6%), Social purpose and sustainability (24.1%), Data and analytics (22.7%) and Conversion (21.9%).

The subsectors with the lowest proportion of high-growth agencies are Design and branding (6.8%), Internal communications and employee engagement (6.8%) and Brand strategy (7.3%).

Where are the high-growth agencies?

When looking at the geographical spread of high-growth agencies compared to the sector as a whole, we can see that there are a greater proportion in London (33% of high-growth agencies compared to 30.3% of all agencies), the North West (10.2% of high-growth agencies compared to 8.8% of all agencies) and Yorkshire and The Humber (7.5% of high-growth agencies compared to 6.4% of all agencies).

What do I need to know? Growth drivers and indicators

The patterns revealed in the data suggest several underlying forces that appear to be reshaping the UK agency landscape, with implications that extend well beyond simple growth metrics.

Subsector data suggests specialisation shift

The stark performance difference between emerging and established subsectors points to a sector in transition. Agencies operating in newer specialisms appear to be benefiting from structural shifts, with growth rates suggesting that clients are increasingly seeking specific expertise rather than broad-based services.

Geographic opportunity beyond traditional centres

The strong growth rates in Wales (11.6%), Scotland (11.2%) and the North West (11.1%) raise interesting questions about market dynamics. This could indicate untapped client demand, lower operational costs or that technology has levelled the playing field for agencies beyond the traditional centres. However, the volatility observed in some high-growth regions suggests opportunity comes with instability.

The optimal growth zone?

The concentration of high-growth agencies in the 3-10 employee range (45.4% of all high-growth agencies) hints at what might be called an “optimal growth zone” that is large enough to have developed capabilities but small enough to remain agile. Meanwhile, the smallest agencies show high levels of stability rather than rapid expansion, which could reflect either lifestyle choices or structural barriers to growth.

Concentration of economic impact

Just 11.7% of agencies qualify as high growth, yet these generate almost a quarter of total sector turnover. This concentration suggests that what drives exceptional performance has become increasingly critical, whilst also raising questions about whether growth strategies and resources are equally accessible across the sector.

A fragmenting sector?

The data suggests that the sector is becoming split, with a small group of high-growth agencies while the majority remain stable. This could indicate that competitive advantages are becoming more pronounced and sustainable, or that growth is focused in specific areas of the market.

The growth drivers that seem to be suggested by these patterns point to a sector where strategic clarity on positioning, specialisation and ambitions have become more important than ever. 
If you are interested in exploring how to take advantage of growth trends, set plans or even identify whether fast growth is a desirable ambition for your agency, check out our Agency Toolkit. In it you will find articles, workshops and downloadable resources on a variety of topics, including clarifying agency ambition, developing a value proposition and setting objectives that actually get done.

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FAQS

You will find information about all our data points within the report. For an overview of our methodology, the work with our partners at The Data City, and a glossary of definitions for all our data points, please take a look at our FAQs page.