2022 Digital Services Outlook Report & Trends

We all remember the uncertainty of 2020. Many of us spent that year fixing and fine-tuning how we worked—addressing challenges and rethinking our services. It's a good thing too! Because collectively we saw a 25% increase in revenue growth in 2021. To find out more about how responding shops did last year and how they expect to fair in 2022, read on!

To better understand the digital services industry market in 2021 and how owners are thinking about the future, we partnered with Promethean Research to survey nearly 100 executives about last year’s growth, pricing methodologies, profitability and more. We also explored owner expectations for 2022 by digging into their service offerings, client budgets and hiring, and growth plans.

The objective of this report is to provide a high-level understanding of the digital services market in 2021 and gauge expectations for 2022. Here are some highlights.

• Here we grow again

  • Digital shops grew 25% last year! Owners predicted a great 2021 and they delivered with exceptional revenue growth. The average shop served 41 clients and added 12 new clients last year.

• Profit is a good thing

  • Revenue growth was profitable with the average shop delivering net margins of 17%. Longer client tenures correlated with higher profitability.

• Better pricing = better growth

  • Average hourly rates shifted up last year with 40% raising prices. Those that did raise their rates grew 20% faster than those that didn’t.

• Specialists vs Generalists

  • The specialist/generalist split remained even at about 50/50. Interestingly, specialists only grew slightly faster than generalists but reported lower margins.

• Keep moving forward!

  • Owners are expecting another great year in ’22 with outlooks coming in just as optimistic as last year. One potential headwind lies in a challenging labor market with most owners expecting difficulty here.

Download this report for a high-level understanding of the digital services market in 2021 and owner expectations for the coming year.

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This report was done in partnership with Promethean Research.

A huge thank you to our sponsors: Parallax & Summit CPA.