How Does Your Agency Stack Up?
Digital Marketing Agency Size
Digital Agency Revenue
Our analysis puts the vast majority of digital marketing agencies in the U.S. at under $5M in annual revenue. In fact, 94% of the agencies bring in under $6.3M per year.
Revenue Growth Rate
Most firms saw double-digit growth rates last year. This makes sense with the various expectations about the growth in digital spend by brands.
Agency Employee Count
Today’s marketing agencies are operating in a highly fragmented market. The average digital agency in the U.S. is comprised of just under 10 employees.
Digital Marketing Agency Profitability & Cash
Most agencies report profit margins in the 10-20% range with the majority falling around 15%. This places digital agencies among the more profitable businesses in the U.S.
Hourly Billing Rates
The typical agency bills between $125 and $200 per hour. Smaller, more specialized agencies, and large all-in-one outfits tend to bill at higher rates.
Months of Cash on Hand
Over 1/3 of agencies report having cash reserves of greater than 3 month’s worth of expenses. Depending on your seasonality more or less may be required.
Digital Marketing Agency Operational Metrics
Sources of Leads
The main source of leads for digital agencies comes from client referrals. The second and third most common sources are agency websites and networking.
Project Budget Management
Of the projects that go over budget, the bulk of them exceed the original budget by 10-25%.
Average Client Tenure
The majority of clients stay with an agency for 3 years. 6% of agencies report having client relationships average over 10 years.
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More About How We Help Agencies
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