Each month, we’re gathering information from ecommerce agencies: their results, thoughts, and predictions, and then sharing these insights in an aggregated and anonymous industry report. 

Whether you're an agency owner or just looking for more information, this report can help you get a better understanding of the state of ecommerce agencies.

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The current state of ecommerce agencies: trends, statistics & outlook (September 2024)

According to our September 2024 survey, agency confidence has steadily increased in the past two months. 

Most agencies expect their revenue to continue growing, and that merchants will continue using their services. To stand out, agencies can use marketing methods that bring high ROI, such as referral programs using software like ReferralCandy.

We will now discuss our findings in more detail:

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Marketing budgets are increasing

Only 21% of the agencies in this month’s report saw a reduction in marketing budgets during the month of September, which is slightly lower than what we have seen throughout the year. So, marketing budgets are up.

Why? Well, BFCM is around the corner. It seems like merchants are getting ready sooner than ever:

 "Every September, we present our clients with a Q4 marketing strategy calendar, covering digital, content, email, and promotion recommendations for October through December. This year, we've noticed something different—more clients are engaged and responding earlier than ever. In fact, we’ve already started prepping Q4 strategies for a significant number of them. It’s encouraging to see this level of responsiveness, as it shows our clients are more confident and proactive about tackling the busiest season."  

Stefan Chiriacescu, Ecommerce Today.

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Higher app spend

If we wanted further proof that merchants are getting their stores ready for BFCM, here it is:

Merchants are spending more on apps. 40% of agencies have seen an increase in app spend among their customers.

Every app is different but they always need a bit of time to get up to speed and to make sure it’s working correctly with the rest of the tech stack. Merchants know this, so they want everything running smoothly as early as possible.

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Brands are more sensitive to agency fees…

Inflation is hitting everyone, and agencies always have to maintain a difficult balance between raising their prices to cover their growing costs, and keeping customers on retainer.

This month we’ve registered one of the highest price sensitivity increases since we started the report in January. 47% of agencies are seeing their clients more reluctant to pay agency fees.

Olivier Lambret, the founder of Medito Digital explains how brands are now also open to other pricing structures besides the traditional retainer:

“Recently, we've observed a growing trend where brands are becoming more cautious with their monthly development budgets, often prioritizing certain features while delaying others. This has created a noticeable gap between brands that are cutting back on development expenditures and those on a consistent growth trajectory, willing to continue investing.

On the marketing front, we see an increasing desire among brands for our agency to grow alongside them. They are not only willing to pay agency fees but are also open to revenue-sharing structures that reward high performance.”

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…but they’re still hiring agencies

Brands are looking at costs probably more than ever, and they’re aware that their own headcount is one of their biggest fixed costs.

Even if they’re more sensitive than ever to agency prices, they realize that for a lot of operations it’s better to go with an agency than in-house.

Plus, by working with an agency, they tap into their collective knowledge of working with dozens of other brands.

“The last few months felt reminiscent of the times before the pandemic. Better attribution tools, techniques and strategies have shown their value this summer. We have been able to keep our client's ad budgets in check, despite their previous month's appetite to spend more. This puts more money in our clients pockets.”

Jody Edgar, Sunbowl.ca

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Agencies are confident about their ability to increase revenue

No question about it. Agencies are confident about their ability to make money, despite the challenges.

Jess Grossman the founder & CEO of In Social, explains it perfectly:

“It’s been widely discussed amongst us in the Ecommerce space that our industry has been ‘soft.’ Worries about the economy are impacting brands’ financial decision making, which, in turn, affects tech and agency revenues. 

I don’t like to say that we’ve been lucky at In Social because we work really hard and are good at what we do, but we have only seen a ‘light softening’ in agency revenue this year. We’ve had no layoffs, and have still acquired new business. Is it as much as years past? No, but it’s definitely giving us hope for 2025. We also expect to see brand revenue increase over the next 6 months as we anticipate - at least for our portfolio of brands - a very successful BFCM. 

A successful BFCM means more money to invest into marketing in 2025.”

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Optimism (almost) across the board

“Retailers are trying to read whether consumers will be hesitant in an election year to make significant purchasing decisions, or whether a year culminating in lowered inflation will ultimately be a greater help to the holiday season.”

Paolo Vidali, Hiddengears

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US Elections and BFCM 2024

This month, we’ve decided to ask more time-sensitive questions regarding the effect of the US elections in overall Q4 sales, as well as the agencies’ expectations towards BFCM 2024.

More specifically, we asked: On a scale of 0 to 10 (with 5 meaning no change), do you think the upcoming U.S. elections will affect ecommerce sales positively, negatively, or have no impact at all?

Surprisingly, the responses are mostly negative. 

About 50% of the agencies believe that the US elections will have a somewhat negative impact, less than 35% believe it’ll have no effect, and the remaining 15% believe it’ll be positive for DTC sales.

Ultan O'Callaghan, CEO at Thooja shares his thoughts on how the US election will affect ecommerce brands: 

"We’ve already observed an increase in CPMs for our US clients across paid ads, driven by heightened competition due to the US election. As political campaigns compete for ad space, brands are finding that the cost per acquisition (CPA) for ads may become unsustainable in Q4. As a result, many are shifting focus to other channels, particularly email marketing. Email stands out as a cost-effective, owned channel that remains largely unaffected by external events like the election. Our clients are heavily investing in email campaigns to build direct customer relationships and drive conversions during this critical period."

Ash Ome from MOTIF believes that:

"As we approach the U.S. election, I think it’s important to recognize how it might affect this year's Black Friday and Cyber Monday sales. People are feeling a mix of excitement and uncertainty, which can make them more cautious about spending.” 

We also asked agencies: On a scale of 0 to 10 (with 5 meaning no change), do you think this year's Black Friday/Cyber Monday will record higher, lower, or about the same level of sales compared to 2023?

“I don't think the USA election will have a major impact in the short term and we're estimating a bumper BFCM with more people spending as the cost of living falls!”

AJ Saunders, Audacious Commerce.

“Brands need to really keep their pulse on what consumers are feeling right now. It’s not just about the discounts; it’s about connecting with people and resonating with their values. I believe brands that adapt creatively will truly stand out and engage shoppers. Moreover if a brand has enough brand advocacy and loyalty program in place will be definitely ahead of the game."

Ash Ome, MOTIF
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Predicting the future ecommerce agency trends

‍We're setting our sights high with this industry report. We're not just content with understanding today's trends; we want to get a sneak peek into tomorrow’s. The idea is to track these insights over time and start predicting where ecommerce is headed.

This isn’t just number crunching; it’s about getting a sense of the human element behind the data.

‍This index gets better with more voices joining in. It’s a community thing – the more agencies chip in, the richer and more insightful this index becomes. It acts as a growing, evolving knowledge base for all of us in the ecommerce sphere.

Some of our agency participants include: Online Origins, SeaMonster Studios, Swanky Agency, Thooja, Audacious Commerce, Ecommerce Today, For My People, RPF Agency, Pluro, Webcetera, SmartBug Media, Gloross, VT Labs, Motif, TatJones, Growth Heist, EastsideCo, SmartSites, MageMontreal, GetVisible, StubGroup, Thooja, Gudu, TenThousandFootView, Storetasker, and SEOWorks.

If you're an agency and would like to participate and receive the full report, you can email ReferralCandy's Partnerships Lead Raul Galera at raul [at] referralcandy.com