The latest micebook nineteen Agency Leaders call revealed a pressing concern shared by agencies across the industry: while demand for events remains strong, profitability is being squeezed more than ever.
Agency heads cited increasing costs, client indecision, and the struggle to maintain sustainable business models as their primary challenges…
Margins under pressure
One of the most dominant themes of the discussion was the continued erosion of profit margins. Despite a steady influx of RFPs and event bookings, the financial viability of projects remains a major concern.
“It’s harder to make money now than ever before,” one agency head admitted. “Our average margins have gone down over the last three years due to rising employee costs, supplier fees, and other overheads. We’re having to be more ruthless about the work we take on to ensure profitability.”
Another leader agreed, adding that while rate increases have been implemented, they have not been sufficient to offset rising expenses. “We’ve increased our fees significantly, but there’s only so much clients will accept. The reality is that we often start projects already behind on margin.”
Delayed sign-offs
The increasing indecision from clients is also causing frustration for agencies. Several reported that projects are frequently delayed because clients hesitate to commit or require multiple internal approvals, causing financial strain on agencies that are expected to start work without formal agreements in place.
“We have a job in two weeks in the U.S., and we still don’t have a purchase order or payment,” one leader revealed. “We’re being asked to front significant costs while waiting for client approvals that never seem to come.”
Some agencies have responded by introducing phased fees and penalties for late approvals. “We’ve started charging an extra percentage when clients delay paperwork but expect us to move forward anyway. Essentially, we’re being used as short-term lenders, and that’s not sustainable.”
Business acumen gaps
Another hot topic was the disconnect between agency leadership and their teams when it comes to financial realities. Leaders expressed frustration that younger employees often lack business acumen and struggle to understand the financial constraints agencies face.
“We share everything with our teams—they see the numbers—but there’s still an expectation that pay rises should be automatic, even when business performance doesn’t justify it,” one leader said. “We’re constantly balancing the need to invest in staff while ensuring the long-term sustainability of the business.”
Several agencies are addressing this issue by implementing business training programs for future leaders. “We’ve started educating our team on profitability and decision-making, making it clear that running a business isn’t just about delivering great events—it’s about keeping the lights on, too.”
Despite these challenges, agency leaders remain cautiously optimistic. The demand for events is still strong, and there’s a recognition that agencies must be firmer in their pricing, client negotiations, and internal business strategies to ensure financial sustainability.
As agencies navigate this complex landscape, the importance of collaboration and shared insights remains invaluable. The nineteen Agency Leaders call continues to serve as a vital forum for them to support each other in tackling common challenges head-on.