NEW REPORT SHOWS DESIGN AGENCIES' INCOME UP BUT PROFITS FLAT

Summary from the TLDR Design newsletter

A new report shows UK design and branding agencies stabilizing after a difficult period, with fee income rising 5.5% (3% after inflation) and strong growth in retail, packaging, and brand identity work. However, profitability remains weak: margins are flat at 6.9%, employment costs keep climbing, and both income and profit per head have fallen. Group-owned agencies now outperform independents. The report warns that AI is pressuring fees while demanding new investment, pushing agencies to shift gradually toward value-based pricing to stay competitive.