If you work at an advertising or design agency and have been feeling the pinch recently, you’re far from alone. According to Gartner’s 2024 Annual CMO Spend Survey, marketing budgets have been slashed by 15% over the past year, which is having an inevitable knock-on effect on agencies’ finances. “It feels like a massive belt-tightening is going on. If it’s not essential, people are waiting, whether you’re in advertising, design, music or art,” says Food co-founder Iain Tait.

While Pentagram partner Luke Powell notes that his team are still receiving well-paid jobs from growth industries such as AI, when it comes to branding projects in general the studio is repeatedly being haggled down on quotes. “There’s a feeling in the office that we are losing jobs because we’re pricing ourselves too high,” he says. “When you are all of a sudden having projects for the same amount of money that we were trying to budget them at over the last couple of years being rejected or going to other studios, you start to question whether we should be pulling our prices down.”

On the other side of the equation, there’s also the demands of increasing salaries, rent and software costs for agency leaders to contend with. “There’s this squeeze that’s happened, which is that our overheads are going up not down. I think it would be less of a panic about the reductions in budgets we are seeing if it wasn’t coming from both directions,” says Powell.