Tangible achieved revenue growth of 26.7% over 2007 to £72.7m, with headline operating profits down from £4.1m to £3.7m.
It linked the revenue growth to clients, particularly in the public, charity and business-to-business sectors, "migrating budgets into response solutions in order to defend their own revenue flows".
The fall in profits was blamed on declining income from financial services clients, which Cello increased its exposure to in 2007 by buying a controlling stake in specialist agency cchm:ping.
The company nonetheless argued its strategy of combining digital and direct marketing capability was working.
"The successful integration of online capability with more traditional direct marketing approaches has proved a successful strategy as clients look to reduce risks.
"Major clients are no longer willing to spend on a speculative basis, but they do want digital capability as part of tried and tested approaches that deliver secure returns on their expenditure," the company said in a statement.
Cello pledged to reduce costs across its operation in 2009. It said: "We have consolidated Tangible into three major operating hubs in London, Edinburgh and Cheltenham. We anticipate that by the second half of 2009, we will be operating from one primary office in each hub, with associated revenue generation and cost benefits."
It claims Tangible, which employs 350 people, is now the sixth biggest UK business of its kind.
At a group level including its larger research division Cello reported pre-tax profits of £3.8m, down 8.3% from 2007. Revenues totalled £139m, up 28.4% from 2007.