annual agency survey finds mixed results

 

The MOORE Kingston Smith Annual Survey 2019 of marketing and design agencies has found mixed results with digital and PR agencies performing well financially, but the design sector taking a hit.

The respected report assessed the financial performance of six creative UK agency disciplines (advertising, branding and design, digital, marketing and sales promotion, media planning and buying, and public relations (PR)) as well as the finances of the holding and parent groups in these sectors.

Overall, it found slower growth than in recent years. The effects - blamed on uncertainty over Brexit, unpredictable client spend patterns and rising costs - were worst in the design sector which experienced a decline in fee income. By contrast, profit margins in digital and public relations both improved.

The authors warned that although businesses should be aiming for profit margins of 20-25 per cent, this was only achieved by about one in five businesses and by none of the sectors as a whole.

They warn that businesses in all these disciplines face a challenge from rising staff costs, as they struggle to retain talent and to keep a rein on overheads from employing freelancers

MKS Operating Profit Margin 2019

Above: Marketing Monitor, Winter 2019/2020.

The report states: "As the industry moves forward, charging appropriately for services delivered will be a key to success. It will no doubt be those agencies that can be nimble, find opportunities and invest for the future that will thrive."

Find out more about the report and its findings here.