Agency Performance Pulse: a look back at 2024 and predictions for 2025

The growing use of AI, increasing costs, and clients taking work in-house are among the biggest concerns of agencies in 2025, according to a new Agency Performance Pulse report.

The Agency Performance Pulse was carried out by the Alliance of Independent Agencies in partnership with Synergist and Band, a firm of accountants and advisors to the creative industry.

It surveyed 112 agencies from across the UK – asking them what their biggest challenges were in the last six months of 2024, and what their biggest opportunities and obstacles look set to be in the coming year.

It also looked at their financials and gives a comprehensive snapshot of agency performance in the UK at the start of 2025.

Some of the key headlines from the report include:

• 59% of agencies saw revenue increase in 2024, despite the turbulent economic climate
• 65% saw an increase in employee costs
• Over half saw an increase in existing and new client revenue, but 25% saw this drop
• The biggest challenges were new business generation, client delays and unpredictability and budget constraints/cost challenges

Looking ahead to 2025, the report shows that:

• More than half of agencies predict profit will remain the same 
• 80% predict employee costs will increase
• The biggest threats/challenges are seen as economic uncertainty and budget cuts, AI advancements and in-housing by clients
• The biggest opportunities in the next six months are likely to come from new business generation, existing clients, and leveraging technology and AI for efficiencies and innovation 

Jason Neale, Managing Director of Synergist partner, Agency Works, said: “This report is a really important glimpse into what’s going on in the agency world right now. 

“It shows that, while it’s been a difficult 12 months for many, there are also lots of reasons to be positive.

“Despite rising costs all around, many agencies have already found ways to maintain, and even grow, their revenue. And while new technologies like AI may pose threats in terms of clients deciding to take things in-house, it also creates some really big opportunities for agencies to make their processes more efficient and effective.”

He added that the agencies that will thrive in 2025 will be those that focus on sharpening their “hard-to-find” skills like strategy, creativity and technical expertise. Streamlining processes will also be an essential focus."

The report is free to download and can be found here.