New analysis of more than 25,000 UK agencies suggests the North may be outperforming traditional assumptions about where innovation and growth occur in the sector. In this thought-leadership piece, strategist and marketer Tom Salmon, co-founder of Agency by Agency, explores what the data really reveals about northern distinctiveness…
There is something very interesting about how stories are told about the UK agency sector. First of all, much of the attention is commanded by London, home to 38% of all agencies and an even higher proportion of the agency workforce. At the same time, talking about the “agency sector” as a whole often diminishes the breadth and depth of this sector, where agency specialisms can include digital transformation or social purpose and sustainability, copywriting or market research, direct marketing or translation and localisation.
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Our latest research took us into all parts of the UK, looking for the stories that show how geography matters when it comes to exploring the agency landscape across the country. What emerged was a picture of northern distinctiveness that might challenge some assumptions about where innovation, growth and expertise lives and thrives, as well as posing questions for the agency community both within the region or across the nation as a whole.
What the numbers tell us about northern distinctiveness
For the purposes of our analysis, we defined ‘the North’ as the North West, North East, Yorkshire and the Humber, Scotland and Northern Ireland collectively (based on ITL1 regions, used by the OECD for statistical purposes). Of the more than 25,000 agencies we have mapped across the UK, 25% are housed in the North. At the same time, the agency sector in the region accounts for 14% of total sector turnover while representing 16% of the sector workforce.
So what’s going on? These headline figures alone point to a fundamentally different operating model. Northern agencies are typically smaller, more focused and deeply specialised in ways that agencies elsewhere often are not.
Although the share of workforce and turnover is lower than the region’s share of active agencies, northern agencies have collectively achieved a 9% annual growth rate, compared to the sector average of 8.1%. This is a meaningful overperformance of the average, especially when considered alongside their specialist positioning. The data suggests that northern agencies have found ways to punch above their weight by concentrating on specific expertise areas rather than broad-based service offerings.
History matters
In exploring the data, we were struck by something beyond the numbers, namely that the northern agency landscape reflects deep historical roots that continue to have an influence deep into the third decade of the 21st century. Industrial heritage in particular, built around textile manufacturing and heavy industry, fostered early adoption of data-driven approaches through catalogue retail operations. These mail-order businesses, the precursors to modern e-commerce, required sophisticated understanding of customer behaviour, conversion and performance, decades before they became industry buzzwords.
Today, agency specialisms in the North can be directly traced back to this foundation, Many former factories and other industrial sites now house the offices of leading performance marketing, search, digital and social agencies. We don’t think this is coincidental, it represents how a tradition of analytical approaches and data-focused culture that was essential to earlier industrial success has adapted to the modern economic landscape. The transition from measuring production efficiency to measuring market performance represents a type of cultural continuity rather than a complete reinvention.
Where do northern agencies excel?
Northern agencies demonstrate particular strength in areas that not only connect into this heritage but are also those which are experiencing significant growth across the sector. E-commerce, digital marketing, conversion and performance marketing are core competencies of the region that have developed over decades. Across the subsector clusters we analysed for the Agency by Agency Growth Report, Performance and Analytics agencies achieved 9.7% growth, with Digital and Technology agencies even higher at 10.1%. Both these subsector clusters are growing faster than the sector as a whole.
The concentration of expertise in these areas creates competitive advantages that extend beyond individual agency capabilities. Regional clusters have developed around specific specialisms, with 80% of direct marketing agencies located outside London and significant concentrations in the North West, North East and Northern Ireland (Agency by Agency Industry Report, March 2025). Similarly, 74% of search and performance agencies operate outside the capital, with particular strength in northern regions.
This clustering effect amplifies individual agency capabilities by creating ecosystems of related expertise. When agencies, suppliers, freelancers and support services concentrate geographically, the combined capability often exceeds what any single organisation could achieve independently.
Northern agencies and the funding story
One interesting tale that emerges from the data is that, despite strong growth performance and clusters of high-demand specialisms, northern agencies face a striking investment disparity. They receive only 8% of total investment made in the UK agency sector, a number that stands in stark contrast to their 25% share of active agencies or even their 16% of the agency workforce.
The gap becomes more puzzling when looking at alternative funding sources. Northern agencies have secured 16% of Innovate UK grants, suggesting that innovation recognition exists while being somewhat absent from private investment flows. This disparity raises some important questions about how investment decisions are made and whether geographic proximity – namely, ‘being in London’ – continues to influence capital allocation in ways that might not actually serve optimal growth outcomes.
Indeed, the investment gap potentially represents significant missed opportunities. If northern agencies are outpacing sector averages whilst specialising in high-demand areas, their limited access to growth capital may be constraining development both for individual agencies and the sector as a whole.
Where the North might be heading
If the northern agency story challenges traditional assumptions about where innovation and growth occurs in the UK agency sector, the northern experience also demonstrates that specialisation, deep expertise and cultural alignment with client and industry needs can create sustainable competitive advantages.
These patterns matter with the launch of the UK’s Modern Industrial Strategy. In it, the government has identified creative industries as one of the eight growth-driving sectors worthy of targeted investment and support.
Understanding local agency ecosystems, exploring the most urgent challenges and opportunities that leaders are facing and seeing where future investment could have the greatest impact on growth and jobs, is crucial for the Industrial Strategy to create impact not only in the North but across the entire UK agency landscape.
Sources: Agency by Agency Growth Report (June 2025) and the Agency by Agency Industry Report (March 2025). All our articles and reports are available to read in full at agencybyagency.com.
