Ten years ago, running a marketing agency meant learning maybe six tools. Today, the average company runs 106 SaaS applications, according to BetterCloud’s 2025 State of SaaS report. Enterprises average 131. And the martech landscape? It exploded from 150 tools in 2011 to 15,384 in 2025, tracked annually by Scott Brinker in his Marketing Technology Landscape.
Agencies followed the same curve. Then they hit a wall. Companies with 1,500 to 4,999 employees cut their app count by 29% in 2025, the sharpest single-year drop of any segment. That number matters. It reflects a deliberate strategic call, not a budget cut. Agencies are consolidating because the alternative stopped working.
Why Marketing Agencies Are Especially Vulnerable to SaaS Sprawl
Marketing work fragments across tools by nature. A single campaign might touch a CRM, a project management platform, time tracking software, a media buying tool, an analytics dashboard, a design suite, a billing system, and a client reporting tool. Nothing on that list is unreasonable in isolation.
The problem starts when each of those categories quietly grows to three or four tools instead of one. According to Zylo’s 2024 SaaS Management Index, the average company runs 11 project management tools, 15 duplicative online training apps, and 10 team collaboration platforms at the same time. Agencies score worse than most because client work drags new tools in with every account. A new client runs on Monday.com? Now your team does too. Another prefers Asana? Add that. Six months later, project managers are logging into three systems every morning just to see their week.
The data on marketing operations is stark:
62.1% of marketing professionals report using more tools than they did two years ago (Chief Martech, 2025).Only 31% of marketing organizations say their martech stack is well integrated (Zylo, 2026).64% of marketing leaders say they struggle to keep track of what tools they have (Zylo, 2026).Just 33% of purchased martech capabilities are actively used, down from 58% in 2020 (Gartner via CMSWire).
That last figure is the quiet killer. If two-thirds of the features you’re paying for never get touched, the effective cost per active feature is triple what it looks like on the invoice. Multiply that across dozens of tools and the math gets ugly fast.
The Real Cost of a Fragmented Stack
The financial waste is only the visible layer. Zylo’s 2026 SaaS Management Index found that the average organization loses $19.8M per year on unused SaaS licenses. Gartner estimates roughly 30% of global SaaS spending, about $90 billion annually, gets poured into software that delivers no value. These are conservative numbers, and they only capture the seats companies bought but never activated. They do not capture the operational tax of running fragmented systems.
Consider what a 2022 Harvard Business Review study of 137 employees across three Fortune 500 companies uncovered. The average digital worker toggles between applications and websites approximately 1,200 times per day. That works out to roughly four hours per week just reorienting between tools. Across a year, that’s about five working weeks, or 9% of an employee’s total annual time. For a mid-sized agency with 50 employees, that’s the equivalent of losing 4.5 full-time hires to app switching alone.
The hidden costs of a fragmented stack usually fall into four categories:
License waste. Duplicate tools, dormant seats, and forgotten renewals. Zylo’s 2026 data shows 51% of enterprise SaaS licenses go completely unused, the highest waste rate ever recorded.Context-switching drag. Employees spend up to 4 hours weekly reorienting between apps (HBR, 2022). Forrester estimates a 5,000-person organization can save $3.1M annually by cutting just 15 minutes of switching per employee per day.Data fragmentation. When your CRM, billing platform, project tool, and analytics dashboard all hold different pieces of the client picture, reporting turns into archaeology. Finance chases numbers across four exports. Account leads walk into client meetings with stale data. Nobody trusts the dashboard because nobody knows which system it pulled from.Renewal chaos. The average organization now processes 211 SaaS renewals a year, or roughly one every business day (Zylo, 2026). At that cadence, negotiating each contract carefully becomes impossible.
The response from mid-market companies has been to consolidate onto integrated platforms that handle multiple business functions from a single database: CRM, project management, invoicing, HR, inventory, and financials. That’s where categories like ERP and business management suites reentered the conversation for agency owners. Growing firms evaluating options like an odoo implementation service or similar integrated business systems have reported the same pattern: fewer logins, cleaner data, easier reporting. The trade-off is a heavier upfront implementation. That trade-off is exactly what the sprawl-era stack was designed to avoid ten years ago. What changed is the math on the other side of the equation.
The Great Rationalization: What Consolidation Actually Looks Like
Zylo has been tracking SaaS usage since 2019. Their data shows a clear inflection point across their client base. Average apps per company peaked at 130 in 2022, dropped to 112 in 2023, and settled at 106 in 2024. That’s an 18% decline over three years. Mid-market companies moved fastest, cutting 29% of their app count in 2025 alone.
Most agencies don’t consolidate because they read a research report. They consolidate because something breaks. A client audit turns up mismatched revenue numbers across three systems. A payroll error stems from time-tracking data that never synced with billing. An agency owner spends an entire weekend reconciling exports before an investor pitch. That’s the pattern. Consolidation projects launch after a specific painful event, not before.
Consolidation does not mean collapsing to a single tool. Most agencies still run best-of-breed platforms for the workflows where specialization matters: media buying, creative production, analytics. The rationalization happens in the middle layer, where multiple overlapping tools handle the same basic function.
Typical consolidation patterns for agencies include:
Client management: three separate systems (CRM, project management, client billing) collapse into one integrated platform.Team operations: five collaboration tools reduce to two.Financial reporting: spreadsheet-based reconciliation across tools gives way to a single system of record.Time and billing: standalone time trackers that never talked to accounting get replaced with a single connected workflow.
Zylo’s 2026 report noted a modest but real improvement in license utilization, from 47% in 2024 to 54% in 2025. Most of that gain came from companies removing dead seats, not adopting better tools. The organizations improving fastest were the ones that consolidated first and negotiated renewals second.
How to Approach Consolidation Without Breaking Operations
The most common mistake agencies make is framing consolidation as a cost-cutting exercise. It rarely works that way. Teams protect their tools, IT stalls the audit, and the effort collapses before anything ships. Consolidation works when it’s framed as an operational upgrade with cost savings as a byproduct.
A practical starting sequence:
Run a real inventory. Not what IT thinks you have. Pull actual login and expense data. Zylo’s 2026 report found that the average company has 138 expensed applications hiding in expense reports, and more than half of that shadow IT is miscategorized in accounting.Map every tool to a specific workflow. If two tools serve the same workflow, one is a consolidation candidate. If a tool doesn’t map to any workflow, it’s a cancellation candidate.Prioritize by cost and overlap. Start with your top five spend categories. BCG has flagged business intelligence, project management, and cybersecurity software as the categories most prone to redundancy in enterprise environments.Set utilization thresholds. If fewer than 50% of provisioned users are actively engaging with a tool monthly, that tool needs to justify itself at the next renewal, not after it auto-renews for another year.Consolidate around a system of record. Pick one platform that owns the core client and financial data. Every other tool feeds that system, not the other way around. Data lineage matters more than feature count.
The utilization threshold matters more than most agencies realize. Gartner research via CMSWire found that mid-market B2B teams activate only 33% of their purchased martech capabilities, down from 58% in 2020. The gap is widening every year. The only way to close it is fewer, better-used tools, not more of them.
The Bottom Line
The industry data points in one clear direction. The companies that grew their stacks fastest between 2019 and 2022 are the same ones cutting hardest now. Mid-market firms lead the reversal because they have enough scale to see the waste but not so much complexity that consolidation becomes politically impossible. Marketing agencies sit squarely in that segment.
Three things worth remembering as you plan your next renewal cycle:
The average marketing tech stack contains 106 tools, roughly two-thirds of whose capabilities are never used.App switching costs the average worker about five working weeks of productivity per year.The agencies gaining ground in 2026 are the ones consolidating around an integrated system of record, not adding another point solution.
Run the next stack audit before the next renewal cycle, not after. That’s where the math starts working in your favor.
