Introduction from Rand: I care deeply about the consulting world in digital marketing. These people are my friends, my colleagues, my fellow speakers, and my investors. Their fears, concerns, successes, and trends are bellwethers for our field as a whole. Is AI hurting or helping marketers? Is the Zero Click costing them clients or gaining them new ones? Are agencies’ revenue numbers going up or down? Well, buckle up, because Paddy Moogan (of Founder Focus – which helps agency founders level up, The New Leader – one of my fav newsletters, and Organic Video – who helped SparkToro make our promo videos) has answered all of these questions and dozens more thanks to the participation of hundreds of agency owners around the world. And since it’s our second year running this survey, we’ve got data trends across years this time, which I’m particularly excited to see. Without further ado, I turn you over to our friend and collaborator, Paddy Moogan…

A year ago, Rand and I set out to take a temperature check on the landscape for digital agencies, attempting to put some numbers and facts against our anecdotal experience – that things were harder than ever for digital agencies.

It turned out that this was true: hundreds of agencies and freelancers told us what we thought to be true – things were indeed hard. But there was also a healthy degree of hope for the future that things would improve and that the challenges would ease up a little.

So, did things actually improve? Was the optimism warranted? Or did 2025 bring more of the same for digital agencies?

Background on the survey

The goal of our survey is to get a temperature check on the state of the digital agency landscape, helping agency folks (and freelancers) to get a gauge on how their peers are feeling right now. We also wanted to establish some agency performance benchmarks and given that this is our second year running the survey, we are now able to do some year‑on‑year reporting of these benchmarks.

In terms of the topic areas that we asked about, we divided these into five core areas:

• Revenue and growth

• Client services and operations

• Sales and marketing

• Culture and ways of working

• What the future holds for agencies and consultants

We’ll be publishing the results of the 2025 Digital Agency survey over a series of posts, starting today with the top takeaway for agencies and consultants across all of these areas.

Who took the survey?

Let’s take a brief look at some top‑line demographics of those who responded to this year’s survey.

The survey includes agencies from a wide range of sizes, geographies, and services offered, but there’s definitely concentration in small‑to‑medium sized (1‑50 person) agencies, North America and Europe, $100 K‑$5 M revenue businesses, and SEO, SEM, Content, and Analytics. In the sections below, we’ll break out responses from specific slices of these groups to illustrate key differentiators and illuminate useful patterns.

Half of agencies have seen revenue growth over the last 12 months whilst a third have seen net margin increase

Fortunately, whilst 23 % of agencies saw a revenue decrease over the last 12 months, 50 % reported an increase. 12 % are doing particularly well and reported an increase of over 30 %.

This year, we asked about net margin and 32 % of agencies told us that their net margin had increased over the last 12 months. 48 % reported that net margin had remained about the same and 20 % said that it had decreased.

Agencies are more worried about the threat of AI to their business model than a year ago

Like last year, we asked agencies for their thoughts on whether AI poses a significant threat to the agency business model. Some of you may remember that opinion was split pretty much exactly down the middle.

In 2024, 44 % of agency folks agreed with this statement, whilst this year, this has increased to just over half at 53 %.

Interestingly, the worries seem to correlate slightly with the size of the agency, with mid‑size agencies seeming a little more worried about the threat of AI compared with smaller ones:

Two thirds of agencies are worried about career opportunities for junior‑level staff

One of the potential areas that AI can impact agency work is repetitive tasks where AI tools and agents can be trained to do the same job. Typically, such tasks are handled by junior team members who are learning their craft.

So we wanted to ask agencies about whether there could be a long‑term impact on the opportunities afforded to junior agency folks.

Unfortunately, the worries seem to be shared by most agency owners, with 66 % agreeing with the statement that junior team members may have less career opportunities in the future.

Only 22 % disagreed with this statement and 13 % had no strong opinion either way.

Only 14 % of agencies describe their sales pipeline as healthy right now (but things have gotten better)

We wanted to understand the current status of sales pipelines for agencies and freelancers and we found that only 14 % feel that their current pipeline is healthy. Over 50 % describe it as average and the remaining 32 % say that it’s not very good.

This finding was fairly consistent across all regions where our respondents were located.

We’re seeing a (very) small improvement in sales pipeline for most agencies

In terms of how things have changed compared to 2024, it’s probably best summarized as “still hard but slowly getting better”.

• In 2024, 13 % of agencies described their sales pipeline as very healthy. In 2025, this increased very slightly to 14 %.

• In 2024, 36 % described their sales pipeline as not good. In 2025, this decreased to 32 %.

Larger agencies are faring better than smaller agencies in terms of their sales pipeline

Despite location not appearing to be a big factor when it comes to the health of sales pipelines, there is an interesting trend that seems to indicate that larger agencies are doing better than smaller agencies at the moment.

Agencies with 51 + people are reporting their pipelines to be very healthy at a much higher rate than smaller agencies. The trend appears genuine even though the absolute numbers are smaller.

Sales leads are taking longer to close compared to a year ago

• Around 55 % of agencies said that it can take between 1‑6 weeks for a lead to go through the sales process and convert into a client.

• 10 % said it can take 1‑2 weeks, 25 % said it takes 3‑4 weeks, and 21 % said it can take 5‑6 weeks.

When asked whether this timeline had changed over the last 12 months:

• 29 % said the process is taking longer.

• 66 % said the timeline has remained the same.

• 5 % said the timeline has shortened.

Comparing to 2024, more agencies now report timelines in the 7‑12 + week ranges, especially in the 7‑8 week and 12 + week brackets. The only exception is the “less than a week” range, which is also being reported more frequently than last year.

A quarter of agencies say that their sales pipeline has gotten worse over the last year (but things are marginally better than two years ago)

• 25 % of agencies reported that their sales pipeline has gotten worse over the last year.

• 36 % reported that it has gotten better.

• 39 % said it was about the same.

Looking back to 2024:

• 27 % reported a worsening pipeline in 2024 vs. 24 % in 2025.

• 30 % reported an improving pipeline in 2024 vs. 36 % in 2025.

The shifts are small but encouraging: fewer agencies see a decline and more see improvement.

Very few agencies say that things feel very healthy in the agency world right now

A general temperature check on the health of the agency world:

• 12 % say it feels very healthy now (up from 9 % in 2024).

• 47 % say it feels okay.

• 41 % say it’s a struggle.

Overall, the data suggest a very gradual move toward a slightly more positive outlook, though challenges remain.