State of Digital Services 2026

An Uneven Return to Form

Average digital agency revenue grew 7.5% in 2025, a welcome improvement but still only about half the industry's long-run average. Growth expanded unevenly: Large agencies rebounded sharply, Studio and Medium shops posted healthy gains, and Small agencies grew the slowest.

119 agency leaders surveyed · Fielded February 2026 · 74% U.S. · 40 pages

Top findings

• Agencies that reduced services grew the fastest at 13%. Those that expanded grew 9.8%, and those that held steady grew 5.7%.
• Specialization remained the rule, with 86% of shops identifying as specialists. For the first time, service generalists outperformed service specialists on profitability. The 18% net margin posted by the service-generalist / industry-specialist segment came from agencies that made up only 8% of total responses, which the report flags as a sample-size caveat.
• The share of agencies using value-based pricing shrank from 31% in 2024 to 18% in 2025. Those still using it saw significantly lower average growth rates.
• Net margins slipped to 13% in 2025 from 14% in 2024. Studio shops again led at a standout 19%; Dev. Agencies trailed at 11%.
• Average employee growth was negative for a second year in a row at -2%, with Studio agencies seeing an average decline of 7%. Average blended turnover fell to 19% in 2025 from 23% in 2024.
• About a third of agencies have already implemented AI across their businesses, and another 28% are currently implementing. Copywriting and coding remain the most mature use cases.
• M&A sentiment landed at an almost completely even split between buying and selling. Design Agencies were the only archetype looking to buy more than sell.

Inside the report

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

Format: 40-page PDF report, single-license use.

Methodology

119 completed responses from digital agency owners and managers, fielded February 2026. 74% United States, 12% Canada, 8% Europe, 3% Asia-Pacific, 3% Middle East/Africa and Latin America combined. Average agency size 31 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.