The AOR Catch-22: Why Agencies Get Stuck Chasing Projects and Why the Answer Isn’t Just “More Retainers”

In agency life, one of the most common aspirations sounds deceptively simple: “If we could just lock in a couple of AORs, we’d finally be stable.”

So naturally, the idea of landing an Agency of Record (AOR) engagement feels like a win. A steady stream of work, deeper relationships, fewer pitches. That’s the promised land… right?

Not quite.

Here’s the truth: over-indexing on AORs can be just as risky as over-relying on project work. The key isn’t choosing one model over the other, it’s getting the right mix that fits your agency’s goals, capacity, and positioning.

Let’s dig into why that balance is so hard to strike and what it takes to shift your engagement model without sinking your team.

The Catch-22 at the Heart of Most Agencies

If you’re a small to mid-sized full-service agency, this probably sounds familiar:

• You want AOR clients because they give you breathing room and scale.

• But what lands in the inbox are short-term projects such as campaigns, activations, quick-turn requests.

• And those projects are essential to cover costs, keep your team billable, and feed the pipeline.

So you chase projects. You stretch your team. You push off bigger strategy work and new business planning because delivery takes all the oxygen. And the cycle continues.

That’s the catch: to land more AORs, you need capacity and clarity. But project work eats both.

Why “Just Get an AOR” Isn’t the Answer

Too many agencies treat AOR wins like a silver bullet. But there are risks in overcommitting to retainers:

• Revenue concentration risk: Lose a big AOR, and your forecast craters.

• Team atrophy: AORs can breed complacency if your team stops innovating or pushing for fresh thinking.

• Scope creep & misalignment: Long-term doesn’t always mean well-scoped. If you don’t revisit expectations regularly, both sides get frustrated.

  
  

On the flip side, project-heavy agencies face their own pitfalls:

• Burnout: Projects require constant selling, scoping, and onboarding.

• Pipeline pressure: Your sales engine has to be always-on and always winning.

• Limited growth: It’s hard to build IP, retain talent, or scale culture when the work is constantly changing.

So AOR isn’t the promised land. And projects aren’t the problem. The goal is the right mix for your size, your services, and your strategy.

What That Mix Looks Like (By Agency Size)

Let’s get specific. Here's a directional benchmark based on agency revenue:

Agency Size (Revenue)	Project-Based Work	AOR/Retainer-Based Work
Small ($1–5M)	~80%	~20%
Medium ($5–20M)	~60%	~40%
Enterprise ($20M+)	~30%	~70%

Why these ratios?

• Smaller agencies need volume. Projects give them access, experience, and cash flow, but they should carve out retainer opportunities to build resilience.

• Mid-sized agencies should start shifting. With more resourcing and infrastructure, they can afford to be more selective and intentional.

• Enterprise shops often have embedded teams and multi-line scopes, so retainers are the default, but they still use project work to test new verticals, services, or regions.

These aren’t rules. They’re starting points. Your ideal mix might look different depending on your industry focus, client base, and internal capacity. The key is intentionality.

How to Audit and Adjust Your Engagement Model

Here’s where to start if you want to move toward a more stable, scalable agency model:

1. Run a Mix Audit

What % of your revenue is coming from project vs. retainer work over the last 12 months? What % of your profit? Are you overexposed to a single AOR client? Do projects make up 90% of your pipeline?

Make the hidden math visible.

2. Align Services to Engagement Models

Some services (e.g., SEO, paid media, content, analytics) are ideal for retainers. Others (e.g., brand refreshes, product launches) make sense as defined projects.

Map your service lines to the engagement models that suit them best then build offers that lead from one to the other.

3. Create Project-to-Retainer Pathways

Not every project will convert, but many can if you plant the seed early. Use project scopes to surface longer-term needs, and position your team as strategic partners, not order takers.

Think “campaign to content pipeline” or “website redesign to optimization retainer."

4. Don’t Let Projects Eat the Calendar

Build in whitespace. Use it to pursue strategy retainers, pitch deeper engagements, and refine your positioning. If every week is consumed by delivery, you’re not running an agency, you’re running a creative job board.

5. Keep Optionality in Your Model

Even if you land a dream AOR, don’t turn off the project engine. Use projects to test new verticals, build new capabilities, or stay sharp. Diversity protects your agency from market swings and client churn.

The Takeaway: Balance, Not Blind Faith

The best agencies don’t chase retainers just to say they have them. They build a model that fits their strengths, services, and goals and they revisit it often.

That might mean holding space for high-value project work. It might mean investing in your new business engine to land more strategic AORs. It probably means both.

It means looking at your mix not as a badge of honor, but as a strategic decision that shapes how you grow.

Let’s Talk

Want a second set of eyes on your current mix or help designing a smarter model that supports growth without burning out your team?

Let’s talk. I’ve helped agencies at every stage audit their engagement strategies, rebalance their mix, and position for long-term success.