The 20% Doing Something Different
TMetric’s 2025 benchmark study of 250-plus agencies found that only 20% track profitability by client, project, or service line at all. Read plainly, that means 4 in 5 agencies are making staffing, pricing, and client-retention decisions without knowing which specific accounts are making money and which are quietly losing it, running the whole business off an aggregate revenue number that hides the real picture underneath.
What the Other 80% Can’t See
The same TMetric study puts a real cost on that blind spot: 47% of firms lose up to $500,000 a year on untracked billable hours, and 23% of billable time is never invoiced at all. Neither number is possible to fix without first tracking revenue and hours at the client level, since you cannot recover an hour you never knew was spent, and you cannot reprice or exit an account you do not know is unprofitable in the first place.
Why “We’re Growing” Can Hide a Losing Client
Aggregate revenue growth is a genuinely poor proxy for account-level health. An agency can add new, profitable clients fast enough that total revenue climbs every year while one or two legacy accounts, scope-crept, underpriced, or both, quietly lose money underneath that growth the whole time. Without client-level tracking, that drag is invisible on the topline number owners watch, and it stays invisible until margin overall starts slipping for reasons that are hard to pin down.
What “Good” Looks Like Once You’re Tracking
Parakeeto’s benchmark data, as compiled in LoomDeck’s 2026 agency profitability report, puts healthy P&L-level gross margin at 50% to 60%, with target margin on individual projects or retainers running 70% or higher. Those numbers only become useful once you are tracking margin by client, they are the destination a tracking system lets you measure progress against, not a number you can estimate from a single blended, company-wide figure.
Where to Start If You Track Nothing Today
The starting point is not a sophisticated system, it is counting revenue correctly per client in the first place. Adjusted Gross Income, AGI, strips pass-through costs, media spend, contractor fees, out of each client’s revenue before any margin calculation happens, since running the numbers off gross billings instead overstates margin on exactly the accounts most likely to be quietly unprofitable, the ones with heavy pass-through spend.
From there, logging hours against specific clients, even roughly, closes most of the gap the 47%-untracked-hours and 23%-never-invoiced figures describe. Neither fix requires new software before it requires a decision to track at the client level instead of the company level.
Why This Connects to Utilization, Not Just Margin
Client-level profitability tracking and utilization tracking are really the same discipline pointed at two different denominators. TMetric’s 2025 dataset puts industry-average staff utilization at 60%, with the optimal, most profitable range running 65% to 80%, a number that only means something once you know which specific accounts are consuming the hours behind it. A team running a healthy 70% overall utilization could still be spending a disproportionate share of that time on the one account in the portfolio that is losing money, invisible in the aggregate number, exactly visible once hours and margin are tracked at the client level together.
That is the practical argument for tracking both at once rather than either alone: a margin number without a utilization number tells you whether an account is profitable, and a utilization number without a margin number tells you whether a team is busy. Neither on its own tells you whether the busy work is the profitable work.
The Outperformance Case, Plainly
The agencies inside TMetric’s 20% are not necessarily working harder than the other 80%, they are working with real information the other 80% does not have. Every pricing decision, every staffing decision, every decision about whether to keep or fire a client, gets meaningfully better once it is informed by which specific accounts are profitable, rather than a single blended number that can hide a losing client for years.
Sources
The external data in this article draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.
- TMetric, 2025 Marketing Agency Profitability Benchmarks
- LoomDeck, Agency Profitability Benchmarks 2026