What’s an acceptable agency margin?
Ask most agency executives, “What’s an acceptable margin for an advertising agency?” and they’ll likely give you a number. Fifteen percent. Twenty. Maybe twenty-five if they’re feeling bullish.
But here’s the problem: any single number pretending to describe an entire creative industry will always be wrong even when dressed up with the usual caveats about it being “an average,” “a benchmark,” or “best practice.”
John Minty, senior consultant at Trinity P3, explains.
John Minty
When we talk about agency margin, it’s a bit like asking what someone should weigh and assuming there’s a universal truth. It’s deeply personal. It depends on genetics, build, lifestyle, and what they’re optimising for; all the things that make them who they are.
The same applies to agencies. An “acceptable” margin is complex, personal, contextual, and constantly evolving. Every agency has its own shape: its lifecycle stage, service mix, portfolio, and goals. And unless you know the story of each one; their ambitions, their structure, and why their leaders don’t sleep at night, the number means almost nothing, in both predictive and retrospective terms.
Still, as an industry, we seem intent on ironing out the very differences that make us interesting, chasing uniformity, then wondering why everything feels the same.
Excellent words