If you work in digital marketing, you’ve likely thought about launching your own agency.
It’s a logical next step.
And there’s a lot of money to be made.
Sure, you’ll encounter challenges. But you’ll learn to adapt and grow, becoming a more seasoned marketer.
The problem that many would-be agency owners face is knowing how to take the first steps.
But how do you start a digital marketing agency?
That’s what we’re going to reveal in this guide. You’ll learn everything you need to know to start a marketing agency.
- The types of digital marketing agencies
- The basics of how to start a digital marketing agency
- How to develop must-know skills
- How to stand out from the crowd
- How to scale with outsourcing and exceptional customer service
What Are the Types Of Digital Marketing Agencies?
Digital has become the epicenter of everything. Companies are allocating more and more of their budgets to digital initiatives.
The global digital marketing and advertising market is estimated to be worth $531 billion. It’s projected to grow to $1.5 trillion by 2030.
But digital marketing is a vast field. There are lots of different niches that cater to specific business needs.
The first step to starting a digital marketing agency is deciding which services to offer.
Will you provide a full suite of services or focus on specialized services? Target a broad generalist market or become a boutique agency in a specific niche?
Here’s a rundown of the different agency types:
Search Engine Optimization (SEO) Agency
An SEO agency specializes in getting businesses found on search engine results pages (SERPs). They do this through on-page optimization, off-page strategies, and creating a strong technical SEO foundation.
The goal is to help websites rank higher, increase organic traffic, and attract potential customers.
Social Media Marketing Agency
Social media marketing agencies help their clients to build brand loyalty, increase awareness, and drive sales using social media platforms. They offer social media management services, craft engaging content, and run ad campaigns.
You can even specialize in specific platforms. There has been a boom in influencer marketing and TikTok agencies in recent years.
Content Marketing Agency
A content marketing agency focuses on creating valuable content to attract and retain customers for its clients. That could include blogs, videos, infographics, and other content formats.
These agencies often work with clients’ in-house or external SEO partners.
Pay-Per-Click (PPC) Agency
PPC agencies specialize in managing paid advertising campaigns. They use platforms like Google Ads and Facebook Ads to drive targeted traffic to a client’s website.
The main objective of these agencies is to maximize the return on investment (ROI) for their clients.
Email Marketing Agency
An email marketing agency creates and executes email campaigns to nurture leads and generate conversions. These agencies help clients build relationships with prospects.
Some agencies specialize in specific email marketing tools like Klaviyo or customer relationship management tools like HubSpot.
Full-Service Digital Marketing Agency
Some agencies do it all.
A full-service digital marketing agency provides a wide range of services to meet clients’ diverse needs.
These agencies offer end-to-end marketing strategies. That includes SEO, social media marketing, and PPC advertising. But it also usually involves website development, branding, and design.
Understanding The Basics of Starting a Digital Marketing Agency
With a niche in mind, the next step is to put the basics in place. You need to start your marketing agency with a solid foundation.
Develop A Business Model
A well-defined business model outlines your agency’s offerings, pricing structure, and target market.
The first step is to define your value proposition.
Establish how your expertise and approach can address specific pain points faced by clients. This is the essence of your business plan.
When you know what you offer, you can start to outline the different sources of revenue for your agency. This could include one-time project fees, retainer-based contracts, or performance-based fees.
The majority of agencies think that a flat project or retainer fee is the best way to price their services:
You can learn more about how to price your services in our SEO pricing model guide.
Whether you are starting an SEO agency or instead starting another type of digital marketing agency, the advice there will still be transferable as many marketing projects will share the same essential framework.
It’s important to think about your growth strategy at this stage.
Think about your short-term and long-term goals. This will give you something to strive for and help you develop your strategy.
It could include hiring plans, scaling operations, and exploring new service areas.
Early on it can be important to ensure your business model is flexible. You’ll need to regularly assess and adjust to meet market changes and evolving client needs.
Over time you will settle into what works best for you, and what is most scalable, but early doors be open to the fact you might not get it right straight away.
Identify Your Ideal Client
Understanding your target audience will help you develop your service offerings and strategy for attracting clients.
Which industries and businesses are most likely to benefit from your services?
Start by defining the types of businesses that align with your agency’s expertise. Reflect on your strengths and experience to identify areas where you can provide the most value.
Focusing on a specific niche will help you position your agency as an expert in that area. It makes your agency more appealing to potential clients seeking specialized solutions.
For example, you could market your services specifically to SaaS startups, dentists, finance companies, or other sectors.
Once you’ve narrowed in on an industry or business type, think about the decision-makers that can hire your agency.
Create detailed buyer personas to represent your ideal clients. You can use HubSpot’s Make My Persona tool to help you.
These personas should include demographic information, pain points, and goals. A clear understanding of your ideal client will help you tailor your marketing efforts.
Estimating Your Startup Costs
The next step is to create a detailed list of potential expenses.
Make a list of one-time costs like purchasing equipment and obtaining necessary licenses or permits. You’ll also need to consider ongoing expenses like SEO tools, software, web hosting, etc.
If you plan to hire employees, take into account salaries and the costs associated with the hiring process.
You could save on employee costs by starting with a small team. Outsourcing to freelancers and external partners can help you increase your capacity until your agency grows.
Make sure you allocate a marketing budget to promote your agency and attract potential clients.
The exact amount you’ll need to spend depends on your location and agency structure. Step By Step Business outlined the average costs involved with starting an agency:
This is just a rough estimate, but it gives you an idea of what you’ll need to spend.
Office space is one of the most significant costs you’ll encounter. You’ll need to decide if a physical office is necessary.
Starting with a virtual setup can significantly reduce initial costs. Some digital agencies have achieved profit margins of up to 40% due to the ability to work remotely.
It pays to plan for the unexpected. Try to set aside an emergency fund to cover operational costs and unforeseen expenses.
Having a financial cushion will give you some extra stability.
Setting Up Your Digital Presence
You’re selling digital marketing services.
Potential clients will judge your expertise and creativity based on your online presence. You don’t want to be the marketing agency that doesn’t know how to promote its own services.
Mfs will start a “marketing agency” and struggle with the MARKETING of their agency
— Aaron (@aarongrt) March 12, 2023
Here are the essential pillars for your digital presence:
Create a Professional Website
A well-designed website serves as the online face of your agency. It can make a lasting impression on potential clients.
Here are things you need to keep in mind:
Design And User Experience
Your website should have a professional design that aligns with the agency’s brand identity. Use the color scheme, typography, and other design elements to show what makes you different from your competitors.
And make it easy for visitors to find the information they are looking for. Use a clear navigational structure and descriptive menu to guide users.
Showcase Your Services
Use concise and compelling copy to communicate the value you bring to clients. Show potential customers how your services can address their needs.
A recent survey found that 90% of clients want websites to quickly show them what an agency is best at:
Prove your value with examples of successful campaigns and case studies. Clients want to see tangible results that demonstrate your expertise.
Include testimonials from satisfied clients to build trust and credibility. Social proof can be a powerful way to influence potential clients’ decision-making.
Establish A Social Media Presence
Social media can be a powerful tool to build your brand, connect with potential clients, and share your content.
First, you need to identify the platforms that align with your agency’s target audience. Where are your potential clients most active and receptive to companies?
For most agencies, LinkedIn is the best platform to engage potential clients. On average, businesses generate over 2.5x more leads with LinkedIn than Facebook:
Join and participate in LinkedIn groups related to your agency’s niche or industry. Focus on providing value and building relationships.
Building Your Client Base
Building a client base is one of the most challenging aspects of starting an agency. It requires
consistent effort and strategic planning.
Here’s how to do it:
Networking is one of the most effective ways to get new clients.
In a 2023 survey, agencies ranked referrals and word of mouth as the two top ways they acquire new clients:
Both of those strategies rely heavily on networking.
You can get started by attending industry events, seminars, and conferences. These gatherings provide valuable opportunities to connect with marketing managers, business owners, and industry experts.
The key is to focus on building authentic relationships.
The best way to scale your agency that nobody ever talks about…
Focus on developing deep relationships with your clients.
– Treat them like a human
– Talk about weekends
– Send em a gift for no reason
– Tell them about your grandmas banging 90th bday.
Relationships = growth
— Shane Martin (@Shane___Martin) June 26, 2022
Look to build long-term connections. Be genuinely interested in the business needs and challenges potential clients face.
Instead of going for the cold sell, demonstrate how your agency can be a reliable resource and partner.
Email marketing is a must for any agency.
Start by defining the specific goals you want to achieve. A cold email outreach campaign will require a different approach to a lead nurturing campaign.
If you opt for a cold email campaign, you’ll need to research your prospects. This will help you personalize your outreach and show you’ve done your homework.
You’ll also want to segment your email list.
You can segment audiences based on interests, industry, or stage in the buyer’s journey. Segmentation will help you deliver targeted messaging, leading to higher engagement and conversion rates.
Prioritize value and relevance when crafting your email copy.
Share educational content that helps recipients improve their marketing knowledge.
Craft Content To Attract Customers
Content marketing isn’t just for client campaigns. It can also work for your agency.
Creating blog posts, videos, and downloadable resources can help you establish your agency as a valuable resource.
Use content marketing to showcase your expertise while providing value to your audience. That could be practical tips, industry insights, or solutions to your audience’s pain points.
Provide value to your target audience. You’ll build trust and position your agency as a go-to source of information.
Gated content is one of the most effective ways to generate new leads.
You can create in-depth ebooks, whitepapers, or free templates that are gated behind a landing page sign-up form. Potential clients need to provide their contact information before they can access the content.
These comprehensive resources can also position your agency as an authority in the field and attract leads.
You can also offer free consultations or audits to potential leads in exchange for their contact information.
Connect With Clients Using Social Media Strategies
Consistency is a key element in social media marketing.
Develop a content calendar and stick to a regular posting schedule to keep your audience engaged.
Maintaining a good posting frequency is a lot easier with the right tools. Use social media management tools to streamline your process and schedule posts in advance.
Engage in discussions, offer insights, and share your content. This could include your blog posts, case studies, and videos.
You should also consider creating content specifically for platforms. For example, LinkedIn carousel posts can be a super engaging way to share short-form content.
Make sure you respond to comments and interact with followers. The goal is to build meaningful connections.
You can leverage social media advertising to reach a broader audience. It’s a great way to boost your best-performing content and posts.
Consider whether influencer marketing is a good option for your agency. You could collaborate with industry leaders on webinars and live Q&A sessions.
This can be a super effective way to expand your reach and boost your credibility.
Learn more strategies to increase your client base in our ultimate list of ways to get more SEO leads.
Develop The Necessary Skills
Running an agency requires a range of skills.
While you can develop some of these over time, having a solid foundation will give you a head start.
It’s a given that you need a good knowledge of digital marketing.
Question from DM’s:
“How to start a marketing agency with little experience”
Let me stop you right there.
You DON’T start something without experience.
Learn a SKILL, then look for clients.
No wonder so many people have bad experience with “agencies”
Thanks Tai Lopez.
— luxconduct 🪄 (@luxconduct) December 15, 2019
But you’ll also need other skills to succeed.
Strong leadership and management skills are essential. As head of the agency, it’s your responsibility to guide your team, set goals, and make strategic decisions.
Running an agency also involves managing finances. You’ll need to manage cash flow, control costs, and keep your agency profitable.
Make learning a priority.
Keep developing your skill set, whether it’s attending workshops, online digital marketing courses, or industry conferences.
Be A Freelancer Before Becoming a Founder
Consider being a freelance contractor before taking the plunge and launching your own digital marketing agency.
This approach offers several benefits.
First, you’ll gain hands-on experience working with clients on real-world projects. This practical exposure will help you refine your skills and understand client expectations.
Working as a freelancer also provides an opportunity to build a diverse portfolio of work. When you start your agency, you can use successful freelance projects to demonstrate your capabilities to potential clients.
You’ll also build a reputation as a capable freelance contractor. You can gain credibility and connect with marketing professionals and other freelancers.
These connections will be invaluable when you launch your agency.
You’ll also already have experience essentially running a business, even if it’s a one-person project. You’ll see the potential wins and losses you have directly managing workload, lead gen, sales… everything!
It’s a great way to get a feel for multiple different aspects that you’ll have to engage with as an agency owner that might not come up in a typical, more focused job role.
Find A Way To Stand Out
The marketing agency industry is highly competitive.
One of the benefits of starting a marketing agency is the low barrier to entry. It requires minimal capital and resources compared to many other industries.
But that also means high competition.
You need to develop a unique selling proposition (USP) to stand out.
Your USP could be a specific niche focus, innovative strategies, or exceptional customer service.
Take a deep dive into your strengths, expertise, and resources. Identify what sets you apart from other marketing agencies.
Think about how you can use your unique qualities to meet the needs of your target audience. You need a compelling reason for clients to choose your agency over others.
Use White Labeling To Scale Faster
White labeling can help you offer your clients a broader range of services. It’s one of the best ways to scale during the early stages of your marketing agency.
You can leverage the specialized expertise of external partners to expand your agency’s capabilities.
When you outsource deliverables
You’re hiring a specialist
Someone who does ONE thing and ONE thing only
You leverage their expertise, resource, scale from doing ONE thing across all their clients
You pay per UNIT of work, no waste, no sick days
Scale up or down
— Joe Davies (@fatjoedavies) July 26, 2023
White labeling provides a flexible approach. When you need to increase capacity, you can scale up your outsourcing. If you go through a quieter period, you can scale down.
Outsourcing marketing deliverables means you can scale your services easily along with your customer base.
Remaining flexible means you can pivot to new service areas as-and-when they arise without having to respec teams or hire whole new ones.
Regardless of what type of marketing agency you create, you can outsource any potential service deliverable, from outsourced SEO to outsourced link building, outsourced content writing to outsourced video creation.
These all allow you to create a solid basis of marketing essentials that you can then build on with your USPs and specific marketing knowledge.
This allows you to take on a more comprehensive range of projects and meet client demand. And without the burden of building an extensive in-house team from the outset.
As your agency grows and gains momentum, you can gradually bring services in-house.
The core of your team can remain the same throughout and focus on growth strategy and client retention while capacity fluctuates as needed in those vital early days.
If you incorporate outsourcing from the start, you’ll be able to avoid crippling overheads in lean periods or the tragedy of having to turn away clients due to capacity issues if things really start flying!
Focus On Delivering Great Customer Support
Exceptional customer support is vital to retaining clients and gaining referrals. It’s one of the most important aspects of running a successful agency.
In a recent survey, clients and agencies revealed what they view as very important in the client-agency relationship.
Four of the top-rated aspects come down to customer support:
It’s vital to actively listen to your client’s needs and concerns. Understanding client goals and challenges helps you tailor your services to their specific requirements.
Go the extra mile to exceed client expectations. Proactively anticipate their needs and offer personalized solutions that really move the needle.
Trust is the foundation of long-term partnerships.
It’s important to be honest and transparent. Be upfront about project timelines, costs, and potential challenges.
When clients feel genuinely cared for, they are more likely to stay with you and recommend your agency to others.
You can use a Net Promoter Score (NPS) to gauge client satisfaction. It’s a metric used to estimate customer loyalty and how likely your clients are to recommend your agency.
Tracking NPS over time can help you see what’s working and identify areas that need attention.
Plan To Scale!
Every agency starts small with just a handful of clients. But growth comes quickly.
You should have a plan to scale your agency sustainably.
That could involve expanding your service offerings, increasing the size of your client base, or attracting a more diverse range of clients.
As you take on more projects, you’ll need a bigger team to handle the workload.
Delegating is integral to effective leadership and management.
You can hire people with different skill sets to enhance your service offerings. This will also allow you to focus on your core strengths.
For example, you might be great at content marketing and digital PR. But not as adept at technical SEO.
Hiring a specialist will help you offer more value to clients and let you concentrate on what you’re good at.
You should also consider working with external partners that complement your agency’s services. Partnering with specialists can help you take on more complex projects without overextending your resources.
Preparing For Your Agency Launch!
Starting an agency is one of the most exciting things you can do in your marketing career. You can put your skills and experience to the test and make a real impact on the success of your clients.
You’ll need to be dedicated and committed.
But with the right planning and partners, you can make a name for yourself and build a thriving digital marketing agency.
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