State of Digital Services 2025

Surviving & Thriving Through a Tough Market

Studio shops returned to long-term growth levels, Small shops maintained slow but steady gains, and Medium and Large agencies experienced mild contractions for the first time on record — including Promethean's first contraction ever among Large shops.

151 agency leaders surveyed · Fielded February 2025 · Primarily North America · 39 pages

Top findings

• 2024 growth by size: Studio 9.4%, Small 3.7%, Medium -0.3%, Large -1.1%.
• 28% of agencies raised their rates and grew 8% on average; agencies that reduced their rates saw revenue decline at an average rate of 6%; agencies that kept rates flat grew 4%.
• 84% of agencies identified as specialists. Agencies that specialized in a specific industry earned 23% higher net margins than industry generalists.
• Average headcount fell 4% in 2024, led by a 10% decline at Small agencies. Contractor use rose 19% on average.
• Net margins held at 14%. Studios led at 19%; Medium agencies trailed at 8%.
• Agencies whose typical project size grew significantly larger earned 38% project margins and 26% net margins.
• 30% of agencies had already implemented AI; another 13% were currently implementing. Copywriting (2.2) and coding (1.7) led AI maturity.
• Nearly half of agency leaders planned to participate in M&A in 2025: 36% open to selling, 34% open to buying.

Inside the report

1. Executive Summary
2. Introduction
3. Growth Dynamics
4. Profitability & Efficiency
5. Key Trends
6. Methodology & Demographics

Format: 39-page PDF report, single-license use. Joint project with the Bureau of Digital. Research sponsored by Parallax.

Methodology

151 responses from digital agency owners and managers, fielded February 2025. Primarily North America: 78% United States, 12% Canada, 6% Europe, plus Asia-Pacific, Latin America, and Middle East/Africa. Average agency size 26 FTE; median 13 FTE.

About Promethean Research

Promethean Research has tracked the digital agency industry since 2015. The State of Digital Services is our annual benchmark for agency leaders making decisions on growth, pricing, margins, staffing, and M&A.