95% of agencies met or exceeded revenue goals for 2021 by focusing on profitable service offerings.
Will 2022 be another great year for agency growth?
We believe it will be, especially if your agency matches and exceeds what your competition may be doing.
In this article, we’re going to share key findings from CallRail’s 2022 Outlook for Digital Marketing Agencies report that will help you grow your agency and stay ahead of competing agency trends.
1. 86% Of Agencies Added A New Service Offering – You Should, Too.
To stay competitive, agencies pivoted towards their most profitable service offerings and added new services to address their client’s needs.
In 2021, the service offerings considered most popular were:
- Social media marketing (reported by 34% of agencies).
- Full-service digital (29%).
- Website design and development (25%).
While website design and development dropped in popularity from 2020 to 2021, it remains the third most popular service for the past two years.
Social media marketing and full-service digital took the number one and two spots from 2020’s most popular services, SEM/paid advertising and SEO.
Why Are Agencies Adding These Services?
One likely explanation for the shift in service focus from SEM to social media marketing is the increase in social media users last year.
According to the latest social media statistics, 400 million new people signed up for at least one social networking site in 2021.
These insights can help your agency discover what services your competition may be adding, allowing you to add them as well.
2. 32% Of Agencies Report Social Media Marketing As Most Profitable Service
Consider adding social media marketing to your agency’s service offerings, if you have not added them already.
In addition to being the most popular service offering, social media marketing is also considered to be the most profitable service offering by 32% of agencies.
This is followed by full-service digital (reported as most profitable by 28% of agencies) and website design and development (24%).
3. Agencies Spend 20 Hours On Marketing Strategies Each Week Per Client
Is your agency spending too little time on your clients’ strategies?
Agencies reported spending an average of 20 hours each week on marketing strategies and tactics per client.
How about the other time spent managing clients?
Agencies reported spending an average of:
- 76 hours for account management and communications.
- 56 hours for reporting.
- 16 hours for agency administration.
These numbers can serve as benchmarks for your own agency’s productivity and ROI.
Believe your clients’ accounts could be performing better? Check your time spend against these benchmarks.
While finding more efficient ways to manage and communicate with clients would help ROI, the number of hours spent on reporting can have a positive effect.
4. 86% Of Agencies Listed Client Reporting As An Essential Service
In terms of client growth, reporting is crucial.
Agencies that did not meet or exceed client growth goals were 15% less likely to consider client reporting as an essential service.
Why is this crucial? 38% of small to medium-sized businesses want agencies to help them track their leads.
Specifically, your clients need to know what digital ads, keywords, and campaigns generate the most leads for their business.
If you can prove that your strategies are driving profitable traffic to your client’s business, they will be more likely to keep you on retainer for your services.
5. 69% Of Agencies Used Partner Programs To Generate Business
How should your agency generate business in 2022?
69% of agencies reported using partner programs, followed by revenue share programs (60%), and partner marketplaces (42%).
To grow in 2022, 87% of agencies plan to build profitable business partnerships and 84% will focus on business development.
For example, CallRail offers a partner program for agencies that want to support their clients with industry-leading call tracking.
By providing agencies with CallRail as a call tracking and analytics tool for their clients, agencies can give their clients the reporting they need to determine which marketing and advertising campaigns are leading to the most conversions.
6. 68% Of Agencies Found New Clients Through Social Media
Need another good reason to start offering more social media marketing services?
68% of agencies found new clients through social networking sites.
Events were the next best source of clients, with 63% of agencies reporting, followed by referrals (55%) and tech partnerships (42%).
Most agencies rely on multiple sources of new clients to keep business steady.
7. 99% Of Agencies Expect To Grow In Revenue In 2022
One of the best findings in the survey?
The outlook for agency revenue growth is bright.
99% of the 579 agency professionals surveyed expect their revenue to grow in 2022.
In addition, 85% of agencies expect to grow in size, with 89% expecting overall growth within the next five years.
Challenges In Agency Growth
While most of the findings in this year’s report were positive, agencies did report some challenges that they expect to face in 2022.
- 81% expect hiring new talent will be a challenge. Post-pandemic challenges include health and safety concerns, vaccination requirements, and available remote working options.
- 80% expect challenges with client retention. In the last 12 months, agencies reported 46% of revenue from retainers, while 56% was reported to be from projects.
- 82% expect challenges with client acquisition. 30% is the average number of new clients acquired by agencies in 2021.
The outlook for the future and expectations for meeting goals is bright in 2022.
Most agencies are ready to face challenges head-on to succeed.
You should be, too.
See How Competing Agencies Are Growing & Up Your Agency’s Success
Want to dive deeper into what 579 US-based marketing agency professionals had to say about financial health, employee hiring, client relationships, tools, and strategies?
Download the 2022 Outlook for Digital Marketing Agencies report now.
Download the 2022 Outlook for
Digital Marketing Agencies report now.
The opinions expressed in this article are the sponsor's own.