By In 2024, 667.6 billion dollars are expected to be spent on digital advertising worldwide—a 10.9% jump from 2023 (Oberlo). This number shouldn’t come as a shock, as more businesses are starting to realize the need for a strong online strategy to succeed. As a result, the need for digital agencies has skyrocketed. If you’re reading this article, you might be wondering how to start a digital marketing agency so you can get in on the action. Well, you’re in luck.
DOWNLOAD your copy of the definitive agency profitability playbook and make more informed decisions driving the growth of your agency today.
This blog goes step-by-step through how to start a digital marketing agency (the right way). The path to creating your own agency is just around the corner, so let’s get started.
Table of Contents
- What is a digital marketing agency?
- What are the different types of digital marketing agencies?
- Tools and resources you'll need to start a digital marketing agency
- 10 Steps to Starting a Digital Marketing Agency
- Research the market and competitors
- Choose a niche or services to focus on
- Come up with a business name and brand
- Register your business
- Create a website and online presence
- Equip your office and purchase software/tools
- Establish processes and workflows
- Set your rates and service packages
- Start networking and marketing your services
- Bring on your first clients
- Frequently asked questions
What is a digital marketing agency?
a digital marketing agency is a company dedicated to assisting businesses in promoting their products or services through a myriad of online channels, such as Facebook posts or email campaigns. These agencies play a key role in shaping and amplifying their client’s online presence, strategically crafting campaigns that resonate with their target audience.
How do digital marketing agencies help businesses?
Generate online success and revenue
Digital marketing agencies offer a comprehensive array of services designed to elevate a business’s visibility and influence across one or more channels. While offering services is great and all (we need services to promote businesses online), what’s more important for marketing agencies is that they act as collaborative partners.
When you’re a digital agency startup, your value and what sets you apart from other agencies come from understanding the identity and needs of each one of your clients.
The most successful digital marketing agencies use their expertise to craft a campaign that perfectly aligns with their client's unique goals and aspirations. Think about it, your customers don’t want likes and shares—they want more revenue every month. If you can help them achieve this through your efforts, you are adding value that will keep them coming back.
Offer a diverse service portfolio
The best digital marketing agencies offer a diverse range of services that cover every area of online marketing, including things like:
- Search Engine Optimization (SEO): for enhanced visibility on search engines.
- Pay-Per-Click (PPC): paid advertising for targeted reach.
- Social media marketing: for engagement.
- Content marketing: for storytelling.
- Email marketing: for direct communication.
Each service is a piece of a larger puzzle, collectively contributing to a holistic strategy that better resonates with the target audience.
Have an ultimate goal
The primary objective of a digital marketing agency is to propel businesses toward success. Successful digital marketing agencies increase brand visibility, drive traffic to websites, and, ultimately, generate valuable leads that convert into sales for their clients.
Overall, your goal as an agency owner is to catalyze growth , usher your digital marketing clients into a new stage of maturation, and ensure they not only survive in their local market but thrive.
Also see: Digital agency goes from start-up to $250,000 in annual revenue
What are the different types of digital marketing agencies?
Digital marketing agencies can come in various shapes and sizes and specialize in different things. That’s why understanding these distinctions is important to help you find your niche or specialty and design a convincing value proposition that will reel in valuable leads. Let’s take a look at a few common types of digital marketing agencies:
1. Social media marketing agencies
Agencies that specialize in social media are among the few creative maestros responsible for creating the compelling narratives found on platforms like Facebook, Instagram, TikTok, and LinkedIn. Think of popular franchises like Pepsi, Coca-Cola, and Wendy’s. These agencies know how to craft content for each platform that engages their target audience in ways that foster meaningful connections.
Their ideal clients are businesses aiming to:
- Build brand awareness.
- Drive engagement.
- Cultivate a loyal following.
2. Search Engine Optimization (SEO) agencies
Ever wondered how some websites just magically appear at the top of search results overnight? That's the handiwork of SEO agencies.
These agencies specialize in optimizing websites for search engines by researching the latest algorithm preferences, developing high-ranking keywords, and employing on-page/off-page tactics. Their mission? Elevate a website's visibility to the top of search results.
Their ideal clients are businesses aiming to:
- Drive traffic, clicks, and conversions on a new or preexisting website.
- Grow their authority and credibility on search engines.
- Promote a new product, service, or landing page.
3. Content marketing agencies
From blog posts to videos, infographics, and more, these agencies are all about crafting content that resonates with their clients' audiences in one way or another.
They understand the art of storytelling and use it strategically to not just attract, but also retain the attention of an audience and get them to take action. After all, it is easier to sell to someone who you have already done business with than a fresh new face.
When it's about conveying your brand's message in a way that captivates and converts, content marketing agencies are where it's at.
Their ideal clients are businesses aiming to:
- Enhance brand storytelling.
- Increase engagement through diverse content formats.
- Attract and retain a loyal audience.
4. Email marketing agencies
These agencies understand the power of a well-crafted email to engage, inform, and convert. From drip campaigns to newsletters, their focus is on nurturing leads and maintaining a direct line of communication with their client’s audience.
When personalized and effective communication is the goal, email marketing agencies are the ones ensuring the brand’s messages land in the right inbox at the right time.
Their ideal clients are businesses aiming to:
- Establish and maintain direct communication with their audience.
- Craft personalized and targeted emails that users might actually click on.
- Nurture leads through strategic email marketing.
Tailoring your approach
Beyond the specifics an agency could specialize in, digital marketing agencies often fall into three different categories based on their overall digital marketing strategy:
1. Full-service agencies
From social media and SEO to content creation and email campaigns, they cover the entire spectrum, making them ideal for those seeking comprehensive and integrated strategies.
2. Specialized agencies
Whether it's SEO, PPC, or web design, they bring a depth of knowledge and specialization that can be invaluable for businesses seeking targeted solutions.
3. Local/regional agencies
Geared towards serving clients in specific geographic areas, these agencies understand local market dynamics, trends, and customer preferences. Their unique approach makes them adept at formulating strategies that resonate with regional audiences, something quite beneficial to local or highly niche businesses.
Tools and resources you'll need to start a digital marketing agency
Learning how to start a digital marketing agency and preparing for launch can be an exciting time, but navigating the demands of digital marketing calls for more than just a clear vision. Starting and scaling a digital marketing agency also calls for a strong toolkit of resources and a dedication to lifelong learning.
In this section, we’ll lay the groundwork for running a successful digital marketing agency.
1. Website and portfolio
Design a professional website
Designing a polished online presence is the first step in getting your digital marketing company off the ground. Invest in a professional website that not only showcases your services but also reflects the key value of your agency. After all, if you don’t have a good website, how can you expect future clients to purchase a website from you?
Create a dedicated portfolio section
Have previous work in your back pocket? Highlight past success stories, case studies, and client testimonials. Let your work do the heavy lifting because good quality work can often speak for itself.
2. Analytics and tracking tools
Google Analytics
With Google Analytics you can track website traffic, user behavior, and even campaign performance.
Social media analytics
Platforms like Meta Insights and LinkedIn Analytics provide invaluable insights into the effectiveness of your social media strategies, offering a deeper look into metrics Google Analytics might not be able to supply.
3. Project management software
Organization tools
Save yourself the headache and keep projects organized from the get-go. Organizational tools like Task Manager can help you better assign tasks, set deadlines, and streamline communication among team members to improve productivity.
Collaboration tools
Projects go much smoother when everyone is in the loop. Platforms like Google Workspace facilitate real-time communication, fostering a collaborative work environment that is agile enough to tackle problems before they can become blockers.
4. Graphic design and content creation tools
Adobe Creative Cloud
A no-brainer for professional-grade graphic designs. Photoshop, Illustrator, and InDesign are the industry standards.
Canva
This online platform is simple to use and ideal for quick design solutions, particularly for social media graphics and simple visuals.
5. Email marketing platform
Email marketing tools
As you grow your digital agency, it’s time to manage email campaigns more efficiently as you drum up more and more leads. From newsletters to automated drip campaigns, platforms like Vendasta offer versatile solutions.
6. Ad accounts and budgets
Google Ads and Facebook Business Manager
Set up ad accounts for effective paid advertising. These tools allow you to more easily allocate budgets so they can be strategically based on your campaign goals.
Budget tracking tools
Implement tools to monitor and analyze ad spend against performance metrics so you are not wasting precious resources.
7. Office space and equipment
Dedicated workspace
Productivity and collaboration thrive in a conducive workspace. Having a professional, dedicated workspace enhances the efficiency of your team and creates a positive impression for potential prospects and future talent.
Hardware and software
Nothing is worse than missing a deadline because of unforeseen tech issues. Invest in reliable computers, high-speed internet, and professional software to help you deliver consistent, high-quality content.
10 Steps to Starting a Digital Marketing Agency
When planning how to start a digital marketing agency, we recommend following these ten steps.
1. Research the market and competitors
Market analysis
You won’t know who you’re competing against for clients unless you go looking for it. Don’t let it be a surprise—conduct a thorough analysis of the digital marketing landscape you are looking to enter.
Ways you can do this include:
- Identify any market trends
- Take note of any service gaps
- Sniff out potential opportunities
Competitor research
Study existing digital marketing agencies. One way to do this is through a SWOT analysis. Compare and contrast both of your strengths, weaknesses, opportunities, and threats. From there, you can identify areas where your agency can differentiate itself.
2. Choose a niche or services to focus on
Specialization
Define your agency's niche or specific services. Whether it's social media management, SEO, content creation, or a combination, clarifying your unique offerings helps prospects better determine what you’re all about.
Target audience
Identify your target audience. This will help you tailor your services to meet the unique needs of specific industries or businesses.
3. Come up with a business name and brand
Brand identity
Develop a brand identity that is unique to you. Consider your agency's values, mission, and target audience when crafting your business name and logo.
Domain registration
Secure a domain name that aligns well with your brand and register it to establish your online presence.
Your domain name should:
- Use .com at the end.
- Be short and easy to spell.
- Avoid hyphens, symbols, or numbers.
- Be unique and brand-friendly.
- Reference keywords where appropriate.
- Avoid vague or generic naming conventions.
4. Register your business
Legal structure
Decide on a legal structure for your agency (e.g., sole proprietorship, LLC). From there, you can register your business with the appropriate authorities.
Tax ID and licenses
This varies by region, but in most cases, you will need to obtain a tax identification number and any necessary licenses for your location and industry before you can start practicing.
5. Create a website and online presence
Professional website
Develop a professional SEO-optimized website showcasing your services, portfolio, and contact information.
Build your SEO
Implement SEO best practices to enhance your website's visibility on search engines.
6. Equip your office and purchase software/tools
Office setup
Establish a conducive workspace with the necessary equipment for the task. Consider ergonomic furniture and a reliable internet connection.
Digital tools
Invest in essential digital marketing tools and software, such as analytics, project management, and design tools, to make sure your work is always up to par.
7. Establish processes and workflows
Workflow design
Develop streamlined processes for client onboarding, project management, and reporting. You can also outsource some of your workload to a white-label marketing agency to free you up to take on bigger projects or acquire more clients.
Client contracts
Bill and build orders quickly by creating clear and comprehensive invoices/contracts outlining services, expectations, and terms.
8. Set your rates and service packages
Pricing strategy
Determine your digital marketing agency's pricing structure. Consider factors like industry standards, your expertise, and the value you bring to clients. Also, if you plan to outsource anything, make sure you factor that into your pricing strategy as well.
Service packages
Design service packages that cater to various client needs. Clearly articulate what each package includes to ensure your customers understand what they are buying.
9. Start networking and marketing your services
Networking
Attend industry events, join professional networks, and connect with peers on community forums. Networking is an important part of building partnerships and gaining referrals.
Digital marketing
Don’t forget to promote yourself. Implement digital marketing strategies to advertise your agency.
You can choose from an assortment of marketing options, including:
- Social media
- Content marketing
- Email campaigns
10. Bring on your first clients
Pitching and proposals
Develop a compelling sales pitch and design business proposals for potential clients. These efforts help you better articulate the value your agency brings to a business.
Build client relationships
Nurture strong relationships with your first clients. Their satisfaction and feedback can play a big part in establishing your agency's reputation in the long term.
Frequently asked questions
1. How much does it cost to start a digital marketing agency?
The initial costs can vary based on factors like office space, equipment, and tools. According to SurferSEO, on average, expect a minimum investment of $730 and $29,100. Flexibility is key—start small and scale gradually.
2. Should I focus on a niche?
Yes, focusing on a niche can set you apart and attract more targeted clients. Specializing in a specific area, such as healthcare or e-commerce, enhances your expertise in that sector and market positioning.
3. How do I attract my first clients?
Utilize your network, offer introductory rates, and showcase your expertise through a professional website. You can also leverage social media, attend networking events, and ask for referrals from friends and industry connections.
4. What legal issues or registrations will I need to deal with?
Before you start, you’ll need to register your business, obtain necessary licenses, and choose a suitable legal structure (e.g., LLC). Ensure compliance with local regulations, and consider consulting with a business attorney.
5. How many employees should I start with?
Start lean. Initially, you may be the sole operator or work with a small team. As your clientele grows, hire strategically based on workload and demand.
6. What qualifications or certifications should I have?
While formal education helps, practical experience and certifications also carry weight. Consider certifications in areas like Google Ads, Google Analytics, and HubSpot. If resources for certifications are limited, remember that demonstrated results are often more valuable than qualifications alone.
7. How long will it take to become profitable?
Profitability timelines vary. However, businesses start seeing profits within the first two or three years (Chron). Success depends on factors like client acquisition, service quality, and effective financial management.
8. How to start a digital marketing agency?
- Research and Plan: Understand the market, identify a niche, and outline your business plan.
- Legalities: Register your business, obtain necessary licenses, and choose a legal structure.
- Online Presence: Develop a professional website showcasing your services and portfolio.
- Networking: Attend industry events, build a network, and leverage social media for outreach.
- Client Acquisition: Utilize various channels to attract clients, offer competitive rates, and deliver exceptional service.
- Continuous Learning: Things are always changing, so stay updated with industry trends, invest in certifications, and refine your skills.