Top 100 Digital Agencies 2019: Industry buoyant despite challenging environment

Entrants are ranked by fee income from digital activities in the UK, with IBM iX and Atos Digital Services second and third respectively, an unchanged top three.

The report shows fee income of the Top 100 up 15% on 2018, in line with Tech Nation figures showing the UK’s digital tech sector is accelerating 2.6x faster than the rest of the economy.

Total fee income of Top 100 agencies is £3.2 billion with 90% growth over five years

The UK digital marketing industry has continued to grow over the past 12 months, and remains confident for growth over the coming year, despite political and economic uncertainty, changing supplier relationships and fears over maintaining talent.

The industry is worth £3.2 billion according to the fee income of the agencies participating in the report. This continues the 90% growth trajectory seen over the last five years.

Joy Bhattacharya, Managing Director UK & Ireland of Accenture Interactive, which ranked first in the report, with an annual fee income of £370,476,114 over its last 12 months, commented: “The growth of the industry is very positive news and demonstrates that there is still plenty of opportunity for all. However, this outlook remains only if the challenges on branded businesses are properly understood. The perfect storm of ubiquitous digital services, unstable customer expectations and the emergence of the experience economy has given those in the c-suite…..the stage to drive growth and help transform the business.”

Growth is most dramatic in the top 10 agencies, but most digital agencies expect to grow by 20% over next 12 months

The top 10 average fee income has grown by 151% in the last five years. Over the same period, the others (ie numbers 11-100) have grown by 43%.

Putting this differential aside, the industry as a whole is confident, despite reported business transformation and economic challenges. Most (90%) participating agencies expect to grow over the next 12 months. The most popular expected rate of growth is 20% – which would see a projected Top 100 UK fee income of approximately £3.9 billion in 2020.

The confident forecast is in line with the 2017 Government Digital Strategy, which plans for the UK digital sector to continue growing, so that it contributes £200 billion to the UK economy by 2025. The financial services, retail and travel and leisure sectors are most likely to be hiring UK digital agencies, according to Econsultancy’s Top 100 report. Meanwhile, less agency work is to be found in the real estate, gambling, education, food and drink and charity sectors currently.

Key trends include AI; fears remain for lack of digital talent

Key trends forecasted by the UK digital marketing sector for the coming 12 months include harnessing new technologies and product developments such as artificial intelligence, cloud-based solutions, chatbots, VR, voice and cyber security services. Expansion is also a focus, both domestically, especially growing outwards from the capital, and internationally, with agencies keen to move into new markets.

Meanwhile, talent retention, the challenging socio-political climate due to Brexit and growing concerns about perceived agency value are all common fears which may impede success over the next 12 months, according to participants in the Top 100 Digital Agencies report.

Talent fears are by far the most reported challenge, with a highly competitive job market, difficulties in hiring specialised talent and the digital skills shortage given as the main reasons for the problem. This is in spite of the fact that latest figures show the UK is a hotbed of tech talent, employing 5% of all high-growth tech workers globally.

Mark Read, Sir Martin Sorrell’s successor as CEO of agency network WPP, said: “We {need to} make it easier for businesses to innovate and adapt. If you think about the high street, how do we innovate around planning controls in the high street, so it remains a thriving environment?

“One of the most exciting changes to happen in the UK over the last 10 to 20 years is the attraction of entrepreneurship to people leaving university. Yes, I think there are challenges, and there’s no doubt I think we have to be more flexible. We have to have an approach to lifetime learning, and an understanding that things will change.”