What Does It Take For An Agency To Succeed?

Posted by ashley-miller on December 21, 2015

Marketing Agency

In an environment that only a few years ago was economically challenged, it could be hard to truly determine success because agencies were focused on breaking even rather than breaking out. However, the creative industry’s reputation has always been underpinned by innovative work, financial strength and a healthy level of banter between agencies, so success was not buried for long. Today, the industry is well and truly in recovery, which begs the question, what are the underlying business processes, systems and cultural mentalities required in order for an agency to be considered successful?

From an economic perspective the recent 2015 Kingston Smith report on the financial performance of marketing services companies acknowledged 12 agencies which met its strict Hall of Fame criteria. The winners were spread across a number of disciplines showing that success in the creative industry is not restricted by sector and unlike the previous year, winners were a mix of independent and group-owned highlighting that size doesn’t matter either.

If we start to unpick what makes these companies successful, from a financial perspective it is very easy to determine as it is based on Kingston Smith criteria which in turn is based on best practice. All of them;


  • Spent no more than 55 percent of gross income on employment costs

  • Recorded an operating profit margin of more than 20 percent

  • Generated at least £120,000 of gross income per head

  • Secured positive revenue growth

But surely that can’t be it?

In actuality, the financial success of an agency is really the result of a lot of other behind-the-scenes activity working to ensure the smooth and effective running of an agency. One area of particular importance is the implementation of effective technology – namely an agency management system.

An agency management system provides teams with high visibility into every segment of the business – whether that is around allocation of resources and capacity, real-time budget updates or continuous tracking of new business opportunities or work in progress. The time suck is removed from timesheets and work is managed more effectively – ensuring projects are delivered on time, on budget and to the highest standard.

Another attribute of a successful agency is considered risk-taking. People are inherently adverse to change and new technology can sometimes seem expensive or unnecessary. However, in reality it is likely to be solving a problem you didn’t even know you had. Agencies who understand the importance of investing wisely may take an initial hit on profit margins but ultimately end up future proofing the company for long-term survival.

Looking forward, there has been some strong growth within the creative industry which Kingston Smith expect to continue into 2016 and beyond. As agencies continue to reinforce their arsenal to strengthen against competitors, technology will play a large part in this journey. Indeed, it is likely that we will see more companies in the Hall of Fame not just recognised for financial success, but understanding the supporting technology and strategy that helped get them there in the first place.