At Second Wind, one of the best ways to keep your agency on track is to peek under the hood and learn from others. That’s why we hosted a Jam Session on Small Agency Metrics and Data. Members dug into the results of our 2025 Annual Survey and shared practical strategies for managing the financial engine of their agencies.
If you haven’t been using the annual survey to guide your goals, now is the time. Here’s what our members surfaced about measuring and improving agency performance.
The Financial Pulse: Revenue and AGI Trends
Our 2025 survey shows how revenue streams are shifting and where agencies are finding opportunity:
- Digital media spend has overtaken traditional media and continues to grow. While traditional media remains significant, the balance is clearly tipping toward digital.
- AI revenue was tracked for the first time, averaging about $23,000 in 2025. Although still small, this line is expected to grow rapidly as agencies find new ways to monetize AI tools.
- The average Adjusted Gross Income (AGI) for respondents was $3.3 million, about 42 percent of billings. This ratio has stayed consistent over the years, generally hovering between 40 and 45 percent. Agencies that focus exclusively on branding or strategy and avoid media often see margins in the 70 to 80 percent range.
The 50-30-20 Rule for Profitability
Salary ratios are one of the most common questions we hear. A simple framework for maintaining a healthy bottom line is the 50-30-20 Rule:
- 50 percent of AGI for base salaries (includes benefits and taxes but not bonuses)
- 30 percent for operating expenses
- 20 percent for net profit
Survey respondents averaged about 25 percent of AGI and Net Operating Income, which drops to roughly 16 percent after bonuses and 401(k) contributions. Slightly under the 20 percent goal, but still a solid, fiscally responsible performance.
Defraying Software and Subscription Costs
With agencies spending tens of thousands annually on software and subscriptions, many are finding ways to recoup these costs:
- Charge a fee directly to clients if a tool is used specifically for their work
- Increase billing rates for roles that rely on expensive tools, such as adding $10 to $15 per hour
- Treat subscriptions like any outside service and apply a small markup to cover administrative effort
Transparency and Incentives
The “black box” era of agency finances is fading. Agencies are seeing results by sharing monthly progress against the 50-30-20 rule. Some of the strategies members are using:
- KPI-driven bonuses that split rewards between corporate performance (60 percent) and individual merit (40 percent)
- Non-cash incentives, like additional PTO tied to achieving specific goals such as submitting timesheets daily
- Simplified P&L reporting that shows AGI and direct labor costs per client so staff understand how their work impacts profitability
Key Takeaways
The Jam Session made one thing clear: understanding your agency’s numbers is essential for making smarter decisions and driving sustainable growth. From revenue trends and AGI benchmarks to managing salaries, operating costs, and subscriptions, the insights shared by members show that small, practical adjustments can have a big impact on profitability. Transparency, clear incentives, and regular financial check-ins are not just best practices, they are what set high-performing agencies apart.
For those who want to dive deeper, the full Jam Session is available to listen to anytime, offering a wealth of strategies and real-world examples from agency leaders just like you.
