Digital agencies predict average growth of 26% for 2011 despite lower daily rates than three years ago for many job roles, according to Econsultancy’s 2011 Digital Agency Rate Card Survey published this week.

Decreases in rates since the previous survey in 2008 are evident across areas including project and account management, creative, search engine marketing and media planning, according to the research.

But despite a more competitive marketplace, agencies remain optimistic about their opportunities for growth. On average, digital agencies report that they will grow by 26% year-on-year in 2011, compared to an equivalent percentage of 28% in 2008 and 31% in 2005.

Econsultancy Research Director Linus Gregoriadis said: “The digital marketing sector continues to evolve and offer great opportunities for agencies who can provide clients with sought-after skills and experience. Agencies are still managing to grow their businesses despite more competitive daily rates. Even the largest agencies are anticipating average year-on-year growth of more than 20% in 2011.”

According to the report, daily rates for senior technical staff and data analysts have bucked the general trend by showing slight increases.

The research also found that the projected average increase in overall daily rates for 2012 is 8%. At 10%, the equivalent figure is slightly higher for the smaller agencies (under £1m turnover) but only 4% for the largest agencies (higher than £5m turnover) which is around the level of inflation.

Econsultancy’s fourth Digital Agency Rate Card Survey is based on information provided confidentially by 364 UK digital agencies. The 2011 survey, carried out in June and July, follows similar surveys carried out in 2008, 2005 and 2003.

The report aims to give a clear idea about what UK digital agencies charge for different types of skills and levels of seniority, and to understand how and why rates may vary, for example by size of company and by region.

According to the report, the proportion of agencies surveyed with more than 50 employees has increased from only 5% in 2003 to 18% in 2011. One in nine agencies surveyed now has more than 100 employees.

Almost half of agencies (48%) expect more than £1m in revenues in 2011, while 10% have a projected turnover of more than £10m. A further 6% are expecting earnings of £5m-£10m.

The most frequently cited opportunities for growth within the digital agency marketplace are:

-) Growth of mobile and social media
-) Data integration and analysis
-) Providing insights into customer behaviour across multiple channels
-) Focusing on a few strategic services instead of aiming to cover everything

The most significant challenges for agencies include:

-) Increased competition and commoditisation
-) Staff recruitment and retention
-) Declining client budgets
-) Increased difficulty attracting clients

Download the report

The full report is available to Econsultancy subscribers (Silver membership and above).

Media Contact

Linus Gregoriadis, Research Director, Econsultancy
(e: t: 0207 269 1465)

About Econsultancy

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Econsultancy has offices in London, New York and Dubai and we are a leading provider of digital marketing training and consultancy. We are providing consultancy and custom training in the Middle East, and extensively across Europe and Asia. We trained over 3,000 marketers and ran over 200 public training courses in 2010.

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Published on: 12:00PM on 30th August 2011