So, you want to start a digital marketing agency.
Awesome.
You probably already realized this is a challenging endeavor – or else, you wouldn’t be looking for guides like this.
But don’t fret. With the right strategy, the right resources, and enough diligence and follow through, you’ll be in a position to make your digital marketing agency successful.
Why Start a Digital Marketing Agency?
There are currently more than 90,000 marketing agencies in the United States.
That’s a lot of competition.
But it’s also an illustration of just how appealing the idea of owning your own digital marketing agency is. These are just some of the reasons that attract people to the realm of digital marketing agency ownership:
- It’s easy. Okay, it’s not really that easy. But it’s easy compared to starting other types of businesses. You don’t need to create an advanced new tech product, you don’t need to spend millions of dollars on factories, and you may not even need to hire people. As far as businesses go, digital marketing agencies are relatively straightforward.
- It’s indefinitely valuable. Digital marketing agencies are also excellent money-making opportunities. Whether you do the work yourself or outsource it, you can charge a premium for the services you offer. As long as your client portfolio is robust and diversified, your agency can be a revenue-generating machine for years, if not decades. And in some cases, you can sell your mature agency for a massive profit later on.
- It allows you to be independent. Most people don’t like the idea of working for someone else; it’s just something we feel like we have to do. But as an agency owner, you can be independent, setting your own hours and working the way you want.
- It puts you in control. If you’re already involved in the world of marketing, you might be especially attracted to starting a digital marketing agency so that you can be in the driver’s seat. As the leader of this agency, you will be the one choosing clients, making creative decisions, and ultimately guiding the business.
- It uncaps your income. As a business owner, there’s no fundamental limit to how much money you can make. As long as you keep attracting new clients and providing more services, you can keep scaling up your revenue and profits.
How to Start a Digital Marketing Agency: The High-Level View
In this guide, we’re going to cover all the little elements of starting a digital marketing agency.
But first, it’s helpful to establish a high-level overview – the architecture on which we’ll build our next points.
Starting a digital marketing agency usually unfolds over four distinct phases:
- Individual development. First, you need to make sure you’re in a position to start an agency and make it successful. That could mean fleshing out your skills as a digital marketer, gaining more experience as an entrepreneur, or even shadowing and learning from existing agency owners.
- Strategy and planning. Next, you need to focus on strategy and planning. How is your agency going to work? How is it going to be distinguished from its main competition? And what is it going to take to make it successful?
- Founding and establishment. With a business plan in place and all the skills you need, you’ll be ready to officially create and start running your business.
- Growth. From there, we’ll focus on growth. Your business is already running and (hopefully) making a profit. We just want to make it run bigger and better.
Individual Development: Digital Marketing Skills and Knowledge
Let’s start by focusing on the initial skills and experiences you’ll need to be successful in the digital marketing world.
As an agency owner, you may or may not be doing the ground-level work responsible for helping your clients succeed. Either way, you’ll need to have a grasp on the fundamentals of digital marketing so that you can communicate with clients effectively, appropriately pitch your services, and step in as a leader when necessary.
- Learn the basics. Make sure you understand the basics of digital marketing. if you have a degree in marketing, or significant experience in the field, you may already have this down. You should be familiar with the “four P’s” (product, price, promotion, and place), popular digital marketing channels, and relevant industry terminology. If these concepts are unfamiliar to you, consider taking some marketing courses online or doing your own research to increase your competence.
- Become a contractor. It’s helpful to become a digital marketing contractor in at least one field before trying to start your own agency. This way, you’ll get an immersive view of how digital marketing transactions work, how campaigns run, and the best ways to interact with clients. Not all contractors make for good agency owners, but all good agency owners have at least some ground-level experiences.
- Network. Consider networking with other digital marketers. It’s a great way to learn about different sides of the industry, different marketing channels, and how different agencies are run. Additionally, building your professional network can help you find clients, employees, and contractors when it’s time to officially start your agency.
- Find a mentor (and shadow them). There’s a reason why 84 percent of Fortune 500 companies have mentorship programs: they work. Consider reaching out to existing digital marketing agency owners to see if you can shadow them and get some advice before heading off on your own. Always be respectful and mindful of your mentors’ time.
Individual Development: Entrepreneurship and Management
Digital marketing skills can help you significantly, but there’s more to running a digital marketing agency than just practicing digital marketing.
You also need skills and experience related to entrepreneurship and management.
In other words, how do you run the business?
- Do your research. Business fundamentals aren’t the type of subject that can be taught or learned in an afternoon. If you have a business degree, you’ll have an edge here. Otherwise, you’ll need to do your own research and potentially take classes to learn the basics of entrepreneurship and management. What does it take to make a business successful? What do successful business owners have in common? How do you write a business plan?
- Develop your soft skills. It’s a good idea to develop your soft skills as well, especially if you’re going to be directly managing people. Skills like effective communication, negotiation, and conflict resolution are essential.
- Anticipate your biggest challenges. Every business owner is going to have strengths and weaknesses based on their past experiences, their personality type, and their existing biases. What are your biggest challenges? What are your blind spots? You need to be able to analyze, acknowledge, and work on these weaknesses.
Strategy and Planning: A Business Plan for Your Digital Marketing Agency
Once you feel confident in your skills and experience, you can begin developing a formal business plan for your digital marketing agency.
While it’s not strictly necessary to have an official, written business plan, it’s typically helpful.
This is your opportunity to evaluate the idea behind your digital marketing agency, from start to finish, and project how it’s going to operate. This is also going to serve as the blueprint for founding and establishing your digital marketing agency.
Pay close attention to:
- The business model. How is your digital marketing agency going to make money? Obviously, you’re going to charge your clients for the provision of digital marketing services. But what kinds of arrangements are you looking for and how are you going to charge? Digital marketing agencies can take different approaches, such as charging a flat fee for each project, charging a monthly retainer fee, charging a fee based on percentage of advertising spending, billing based on hours, or even making money on commissions. As you might imagine, these approaches have different strengths and weaknesses; monthly retainer fees lead to more consistent income, but it also locks you into more client obligations.
- Products and services. What types of products and services are you willing to offer? Some digital marketing agencies specialize in a specific channel, field, or tactic; for example, you might choose to exclusively focus on link building for SEO or PPC ads through Google. Other agencies pride themselves on offering a range of different services, fulfilling all the marketing needs of their clients in one place. There’s no right or wrong answer for your approach; what’s important is that you choose the best fit and plan around it.
- Areas of expertise. What are your areas of expertise going to be? This is one factor in your competitive differentiation; in other words, this should distinguish you from your top competitors. Are you going to focus on serving a specific industry? A certain size of business? Businesses hoping to achieve a specific type of goal?
- Your target audience. Who is your audience going to be? Who do you envision as your main clients and how are you going to reach them? What’s going to convince them that your digital marketing agency is worth using? Why is this audience valuable? The more market research you do, the better you’ll be able to answer these questions.
- Competitive differentiation. Don’t forget that the world is overrun with marketing agencies – and there’s an even greater number of marketing contractors in circulation. If you want your digital marketing agency to succeed, you need to competitively differentiate. What does your digital marketing agency do that’s different from everything else on the market? What are your biggest competitive advantages? Pricing, quality, specialized expertise, and geographic targeting are common options here.
Start Your Digital Marketing Agency: Founding and Establishment
With a business plan and a solid vision for how your digital marketing agency is going to develop, you can find the business and begin establishing it.
- Build the brand (and the website). All great digital marketing agencies have a professional, cohesive brand. These brand standards serve as the foundation of all your forthcoming marketing and advertising strategies, and they form the first impressions of the people who interact with your brand initially. Your logo, your color scheme, your brand name, your tagline, and even your voice all plays a role in how people perceive you, so take this project seriously and be prepared to invest in your brand. Additionally, you should build a compelling, conversion-optimized, and fully functional website. Most digital marketing agencies operate with their website as the central hub of communications and operations, so don’t skimp on the details.
- Start hiring (or building partnerships). Next, you can start hiring or building partnerships. Depending on your service model, you might provide digital marketing services from an in-house team, a network of contractors, or a third-party agency that offers white label services – or all of these simultaneously. As you might expect, there are pros and cons to each approach. And no matter what, you’ll need to do your due diligence before bringing someone on board. In the earliest days of your digital marketing agency development, it’s unwise to hire too many people; labor is expensive, so you’re better off practicing minimalism until you have a steady stream of revenue.
- Attract your first clients. Your digital marketing agency won’t last long unless you have paying clients keeping it alive. That’s why your next priority is attracting your first clients. If you spend time developing your professional network, you might already have contacts who could serve as potential clients. Otherwise, you’ll need to carefully analyze your target market and find ways to reach out to new prospects; fortunately, as a digital marketing expert, you already know how to do this. Just keep in mind that people may be reluctant to work with you if you don’t have much experience or a robust portfolio of work; if you meet much resistance, consider sweetening the deal by offering a discount or other incentives.
Growth: Scaling Your Digital Marketing Agency
At this point, your digital marketing agency has all the fundamentals in place to make money and continue operations.
But if you want to make even more money and keep growing, you’ll need to invest in scaling your operations. There are many marketing and advertising strategies that can help you here, such as:
- Pay per click (PPC) advertising. It shouldn’t surprise you to learn that we strongly recommend pay per click (PPC) ads for scaling a new digital marketing agency. You’ll get guaranteed traffic, you can target people with pinpoint accuracy, and over time, you’ll learn more about your campaign so you can optimize it for better results.
- Search engine optimization (SEO). As far as long-term strategies go, there are a few approaches better than search engine optimization (SEO). With excellent content, a steady supply of backlinks, and technical optimization, you should be able to climb the rankings of search engine results pages (SERPs) and attract more organic traffic. However, the digital marketing industry is highly competitive in this area, driving up costs.
- Content marketing. In a similar field, you could focus on content marketing. Providing people more information they genuinely need builds their trust and will eventually attract them to your brand.
- Social media marketing. Social media accounts for your business are free and easy to set up, and you can post and interact with your audiences for free as well. Social media is an excellent distribution platform for your content, and it could be a lucrative source of new traffic and leads.
- Email marketing. Marketers love email marketing because of how inexpensive and easy to automate it is. If you’re able to get a list of relevant prospects and leads, you can generate a drip email campaign that steadily helps you secure new clients.
- Referral marketing. Referral marketing is especially powerful in the early days of your business – so give your existing clients a good reason to recommend you!
It’s also important to recognize that people are going to pay close attention to how you market yourself. You’ll be describing yourself as a marketing expert on your website and throughout your marketing and advertising materials, so if the quality of your work doesn’t hold up to scrutiny, you won’t be able to scale successfully. Think of yourself as your first major client.
Are you ready to start your own digital marketing agency?
Are you looking for a partner who can support you with white label PPC services?
Or do you need help scaling up your own PPC ad campaign?
We can help you with all of it. Just drop us a line and we’ll send you a free proposal for any of your PPC advertising needs!
In his 9+ years as a digital marketer, Sam has worked with countless small businesses and enterprise Fortune 500 companies and organizations including NASDAQ OMX, eBay, Duncan Hines, Drew Barrymore, Washington, DC based law firm Price Benowitz LLP and human rights organization Amnesty International.
He is a recurring speaker at the Search Marketing Expo conference series and a TEDx Talker. Today he works directly with high-end clients across all verticals to maximize search engine marketing (SEM) ROI. Connect with Sam on
Linkedin.
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