Where Agency Revenue Is Heading: Fewer Big Retainers, More Mid-Market Retainers, and Longer Engagements – SparkToro

01/08/26
Source: SparkToro by Paddy Moogan. Read the original article

TL;DR Summary of State of Digital Agencies Survey 2025: Client Services and Operations Insights

The 2025 State of Digital Agencies survey reveals a generally positive outlook with agency headcount growth and longer client relationships. Agencies show mixed approaches to account management and time tracking, with larger agencies favoring dedicated managers and utilization targets. The majority prefer working on a retainer basis, with monthly retainers typically under $10k. Additionally, many agencies are increasingly collaborating with freelancers to manage risk and capacity.

Optimixed’s Overview: Key Trends and Operational Strategies Shaping Digital Agencies in 2025

Extended Client Engagement and Staffing Trends

According to the latest survey, client retention has improved, with 31% of agencies reporting client relationships lasting over three years, signaling strengthened partnerships. Agency headcount shows modest growth, with 26% expanding teams and 40% planning to hire further within the next year, reflecting an optimistic hiring climate. Conversely, only a small fraction anticipate reductions in staffing, indicating relative stability in agency operations.

Account Management and Time Tracking Practices

  • Account Managers: Larger agencies (50+ employees) predominantly employ dedicated account managers to coordinate multi-service delivery, whereas smaller agencies are split on this practice.
  • Time Tracking: A slight majority (57%) utilize timesheets, with usage increasing alongside agency size. Among those tracking time, 65% set utilization targets, commonly ranging between 70-89% for mid-level staff.

Client Billing Models and Retainer Insights

The survey highlights a strong preference for retainer agreements, with 85% of agencies favoring this model to secure consistent revenue streams—an increase from 81% in 2024. Monthly retainers typically fall below $10,000, with nearly half between $1,000 and $5,000. Larger retainers exceeding $25,000 are mostly reported by agencies based in North America and Europe, while smaller retainers are more common in Africa, Asia, and Central/South America.

Freelancer Collaboration and Remote Client Interaction

  • Nearly one-third of agencies reported increased collaboration with freelancers, suggesting a strategic move to mitigate operational risks.
  • Remote client meetings via video calls are now standard practice for 80% of agencies, emphasizing the normalization of virtual engagement in client servicing.

Survey Demographics and Market Representation

The respondents represent a diverse cross-section of the digital agency landscape, predominantly small to medium-sized firms (1-50 employees) based in North America and Europe. The majority operate within $100K-$5M revenue brackets and specialize in SEO, SEM, content marketing, and analytics, providing a comprehensive snapshot of current industry practices and challenges.