June 24, 2025
The State of the Agency World
Episode Summary
The Power of Building a Purpose-Driven, Profitable Agency
Download the Number Tracking Dashboard mentioned in this episode here.
In the very first episode of The Spark Podcast, we welcomed Drew McLellan, CEO of the Agency Management Institute (AMI) and host of the acclaimed Build a Better Agency Podcast, to break down what it takes to thrive in the ever-changing world of marketing, branding, and creative services.
Why Niche Agencies Win
One of Drew’s core philosophies is simple: specialists scale; generalists stagnate. While many agencies begin by taking whatever work comes through the door, the most successful firms intentionally narrow their focus. By becoming experts in a specific industry or solution set, they attract higher-value clients, command premium pricing, and build national reputations — regardless of their location.
“Clients don’t want generalists. They want experts who know their industry and can speak their language,” says Drew.
Profitability Isn’t Greedy — It’s Smart
A major takeaway from the conversation was the importance of understanding Agency Gross Income (AGI) — a critical KPI often overlooked by agency owners. Many chase top-line revenue (vanity metrics) without understanding true profitability.
Drew explained the 55/25/20 model:
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55% of AGI goes to salaries and benefits
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25% to overhead
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20% to profit
If your agency isn’t hitting these benchmarks, it’s time to reassess your pricing, staffing, and financial structure.
Designing a Business That Supports Your Life
Beyond the spreadsheets and systems, Drew shares a powerful personal story: how being a single dad inspired him to design an agency that gave him the flexibility to pick up his daughter from school every day.
This isn’t just about financial success — it’s about freedom and legacy. As business owners, we have the rare ability to create lives filled with meaning, autonomy, and impact. Drew has even used his agency’s profits to fund scholarships in his parents’ names — a living tribute enabled by smart ownership.
Collaboration Over Competition: The Future of Agencies
A theme echoed throughout the episode was collaboration. In a market where clients often hire multiple specialty firms, agencies that play well with others will thrive.
“The first agency clients fire is the one that throws others under the bus,” says Drew.
By fostering strong partnerships with complementary agencies, you not only serve your clients better — you also unlock new revenue streams and shared success.
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Meet Our Guests
Drew McLellan
Drew McLellan is CEO of the Agency Management Institute and has spent the past 30+ years running his agency, The McLellan Marketing Group.
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