Amazon marketplace, social commerce and data-led shops are expanding at twice the rate of creative and content rivals, according to a comprehensive new growth study of UK agencies.
New analysis from Agency by Agency of over 25,500 UK marketing, advertising, creative and media agencies reveals that 27% of performance and analytics agencies grew by more than 10% last year – almost double the 17% seen in traditional creative and content houses.
The 2025 Growth Report tracks turnover, headcount and other metrics across 28 agency subsectors from May 2023 to April 2025. Overall, the UK agency economy expanded by 7.3%.
The study revealed that 11% of agencies deliver 24% of total sector turnover and employ 31% of staff. Meanwhile, 46% of high-growth firms employ between 3 and 10 people, indicating agility trumps scale when it comes to high-growth. Interestingly, Wales, Scotland, North West England and Northern Ireland now exceed London’s growth rate.
New Digital Age spoke to Tom Salmon, Co-Founder, Agency by Agency, to find out more about the research…
What was the thinking behind founding Agency by Agency?
When I was an agency MD, at our peak we had about 195 people and around £13 million in revenue. We were setting budgets, making big plans about where to go next, whether to introduce new services, or what we should be planning for in terms of growth. And there were very, very few data sources available to actually make these big decisions. That’s always stayed with me — probably for the last ten years or so.
Every time I meet a new agency, they ask: ‘How are we doing? Are we okay relative to where we should be?’ Eventually, after holding this idea for about six or seven years, I thought: I’ve got to do something about it and we got funding from Innovate UK, the government’s innovation arm. We started developing a database of every agency in the UK — all their financials, segmented according to specialisms and how they describe themselves. It’s the first time anyone’s had comprehensive data about the sector, all in one place, which still blows my mind.
From your perspective, what were the standout findings of the research?
There’s this real obsession about growth in the sector. Everyone talks about where growth is going to come from. But actually, the major hallmark that stood out from the research was this idea of stability and sustainable business. It’s kind of less headline-grabbing, but it’s really interesting.”
When you look for growth, it’s the niche specialists that are growing the quickest — especially those in services that have only existed for the last maybe three, four, five, six years in terms of consumer adoption. Amazon marketplaces, TikTok shops, social commerce, data analytics… those kinds of areas are still in growth. Whereas the traditional agency specialisms that have been around for donkey’s years just aren’t growing quite as much.
Were there any surprises in the findings?
There are really high growth rates in some regions. Some of that comes from starting from a lower base, but there’s this story we tell ourselves in the sector that’s very London-centric. London’s hugely important, but seeing regional growth is really important too. Different regions have concentrations of different types of agencies, which is fascinating for local governments or associations looking to support agencies in their territories.
How can agencies use this research?
We’re built for agencies. They can subscribe to our data and get access to reports, insights, and benchmarking tools. We also take bespoke research commissions — if an agency, investor, or anyone in the sector has a question they’ve always wanted answered, or is looking to find a specific type of agency, we can help with our database of 25,500 agencies and over 100 different data points per agency.
When we first pulled the data together last year, I looked at it and thought: That can’t be right. But it was. There are thousands and thousands of micro-agencies — or even nano-agencies — of just one or two people. They’re proper agencies, not just freelancers, and they’re doing great work with close client relationships, specialising in specific areas. Finally, we’ve got a view of the whole sector and not just the famous players.
Should we be optimistic about the future of the agency sector in the UK?
Agencies with a team size between three and ten, sometimes a bit bigger, seem to be growing faster than legacy agencies. They have close client connections and can change quickly if they need to. It’s almost like the industry is disassembling itself into specialisms. These specialist agencies are smaller because they’re niche, effective, and agile. And they’re doing some really cool, interesting work.
When you look across the whole agency landscape, of course there’s a mixed picture. Some agencies are shrinking, others are growing, and there’s this massive chunk in the middle that’s stable and doing good work.
Sometimes I have to stop going on LinkedIn because it’s just so gloomy with people saying the agency model is dead for example. It’s not true. There are still new agencies being created every year, and they’re interesting, specialist, and doing exciting work.
Are there any other trends in the agency marketplace that we should be paying attention to?
The fastest-growing segment across every agency type we’ve seen is in social purpose and sustainability. That gives me a lot of hope. These are agencies purely focused on doing social good or refusing to work with clients like fossil fuel or gambling. It’s a different landscape than 15 years ago when growth was the only mantra — and it was almost a source of shame if you wanted to do something different.”
There’s loads of really important findings around gender gaps. The distribution of female-founded and female-led agencies is something we all need to keep a watch on. Some types of agencies have higher proportions of women founders and directors than others but there’s so much more we need to do as an industry, including on the gap when it comes to investment into female-led businesses compared to male-led ones.
