How To Start a Digital Marketing Agency

Digital Marketing
How To Start a Digital Marketing Agency
Article by Ivana Ivanova
Last Updated: June 27, 2024

A digital marketing company is a business that employs different tactics, strategies, and tools to help a brand present its products and services in the best light and achieve its goals.

Now, if you want to start a digital marketing agency yourself, how would you start? In this article, our experts go over eight simple steps to start a digital marketing company.

What Is a Digital Marketing Agency?

A digital marketing agency is a business that uses different marketing strategies to ensure clients can present their products and services favorably to consumers. This company can do any type of marketing, from social media to email marketing, and even offer a full-service a.k.a. every type of marketing in one package.

What Services Do Digital Marketing Agencies Provide?

As a digital marketing agency, you can offer different services depending on the type. The most common ones include:

  • Content services: These are usually given by a digital marketing agency working in the content field. They include creating blog posts, listicles, newsletters, emails, etc. — basically, any type of content that will help clients attract customers.
  • Social media management: Social media marketing agencies work on managing all business social media accounts, so the company always stays present and connected to its customers. The services here include creating posts, adding keywords, using social media advertising channels, deploying best practices, etc.
  • Developing a strategy: This service is common to all types of digital marketing companies and aims to come up with a good strategy to advertise its clients. To achieve this, digital marketing agencies track the market, analyze its trends and customer behaviors, and come up with a roadmap.
  • Analytics: All digital marketing agencies deal with analytics. It is the core of their business since analytics helps marketers optimize their strategies to deliver the desired results.

8 Simple Steps How To Start a Digital Marketing Company

Now that you know what a digital marketing agency is and does, let’s see how you can start a digital marketing business. Follow these 6 steps:

Step #1: Define Your Niche

The first step to starting a digital marketing agency is building a strong foundation. To do so, you must define your niche. And for that, you must choose the type of digital marketing you want to focus on.

Types of Digital Marketing Agencies

Here are the main types of digital marketing agencies to consider:

  • Full-service: A full-service digital marketing agency takes care of every aspect of your advertisements. They lead the whole process, from beginning to end; we’re talking SEO, social media posts, PPC, etc.
  • SEO: Marketing SEO agencies solely focus on optimizing websites and content for companies so they can rank better on search engines, thus gaining more traffic, generating leads, and increasing conversions and profit.
  • Social media marketing: Marketing on social media platforms can help scale a business. These social media marketing companies develop strategies for Instagram, Facebook, TikTok, or other platforms to increase their clients’ follower count and online presence.
  • Content marketing: These companies create top-notch content and optimize it for different mediums, so businesses can attract clients.
  • PPC marketing: PPC marketing companies manage PPC campaigns on different platforms so clients can profit.
  • Email marketing: Another specific type of marketing, email marketing agencies deal only with advertising over emails. They craft and send out emails to ensure their clients’ reach is wider. Other services include email list crafting, A/B testing, success analysis, etc.

Once you pinpoint your digital marketing type, it becomes easier to choose a niche. Remember that a well-defined niche allows you to tailor your services, develop custom marketing strategies, and establish a unique brand identity. Think of it as a compass that guides your agency's direction and enables you to differentiate yourself in a crowded marketplace.

To define your niche effectively, you should:

  • Identify the areas of digital marketing where you have extensive knowledge, skills, and genuine interest
  • Conduct thorough market research to identify gaps and opportunities within the digital marketing realm
  • Clearly define the type of clients or businesses you want to serve
  • Study your competitors within your chosen niche to identify their strengths, weaknesses, and unique selling propositions

As you gain more experience and insights, you may need to refine your niche to align with market changes or client demands. That’s why it’s crucial to stay adaptable and open to evolving as your agency grows.

Agency description goes here
Agency description goes here
Agency description goes here

Step #2: Develop a Business Plan

Starting a digital marketing agency also requires having a good business plan. A well-crafted business plan serves as a roadmap that outlines your agency's goals, strategies, and financial projections.

When developing a business plan, start by:

  • Providing a concise overview of your agency, highlighting its mission, vision, unique value proposition, and target market
  • Writing an in-depth description of your digital marketing agency, including details about your target audience, competitive advantages, and the specific industry segments you will serve
  • Defining the digital marketing services your agency will provide, such as social media management, content marketing, search engine optimization (SEO), or paid advertising
  • Outlining your marketing and sales strategies to attract and retain clients
  • Showcasing details about your agency's organizational structure, team members, and their roles and responsibilities
  • Developing a financial forecast that includes projected revenue, expenses, and profitability over a specified period, typically three to five years
  • Identifying potential risks and challenges your agency may face, such as industry competition, changing market conditions, or technology disruptions
  • Creating a timeline that outlines the key milestones and activities required to launch and grow your agency

Step #3: Set Up Your Legal Structure & Register Your Business

Set up a robust legal structure and register your business to protect your business’s interests, foster trust with clients, and demonstrate professionalism.

Take the time to navigate the legal aspects diligently, consulting with professionals as needed, to position your agency for long-term success.

Here’s how you can start:

  • Choose a distinctive and memorable name for your digital marketing firm. Conduct thorough research of trademarks and register your chosen name to secure your brand identity.
  • Once you set your mind on a name, research and decide on the most suitable legal structure, such as sole proprietorship, partnership, LLC, or corporation, and register your agency with the appropriate government authorities. Some legal marketing companies can ease the job here.
  • Draft comprehensive contracts and legal agreements in advance to govern your relationships with clients, vendors, and employees to mitigate potential risks.
  • When it comes to finances, set up accounting systems to track your income, expenses, and tax obligations. You can always hire an accounting firm to ensure accurate record-keeping and compliance with tax regulations.

Additionally, one of the most important aspects when starting a digital marketing company is compliance with data protection regulations. In the digital marketing realm, data privacy and protection are paramount. Familiarize yourself with relevant data protection regulations such as the General Data Protection Regulation (GDPR) for EU/EEA or separate state acts in the US.

Step #4: Build Your Team

The fourth step in starting a digital marketing business is to build a team. An exceptional team becomes the catalyst and driving force behind delivering amazing results and growth for your clients. Here are key considerations to keep in mind when building your team:

  • Identify key roles
  • Define job descriptions
  • Recruit top talent
  • Foster a collaborative culture
  • Leverage freelancers and contractors
  • Provide competitive compensation and benefits
  • Nurture a positive work environment
  • Continuously invest in training and development

Building a talented team is an ongoing process. Regularly assess your team's performance, address any skill gaps, and adjust staffing as needed to support your agency's growth.

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Step #5: Define Services and Pricing

The next step in the process is knowing what your services and pricing are. When defining your services and pricing, carefully consider the market dynamics, your agency's capabilities, and the value you offer to clients.

Remember that the price you set should be a direct and honest reflection of the value you provide. That’s why you must first identify the core services you’ll offer and then research and assess market rates. Look at what your competitors are charging and then determine your pricing model.

Different Pricing Models in Digital Marketing Agencies

You can choose between several options:

  • Hourly rates: Charge by the hour. You can charge for every service separately or charge for employing your company and all its services. Usually, the more developed digital marketing agencies choose this pricing model since they have the experience and portfolio to show. The range here is around $100 - $150 per service.
  • Project-based pricing: Some agencies like to set agreements with their clients to be paid based on a project. They initially ask the client to state their needs from the marketing company and based on that they create a package (or offer an already existing one) for a set price. The good thing about this pricing model is that you don’t have one price — you choose for each project, leaving you room to adjust depending on the services. On average, this model varies between $200 to $10,000.
  • Retainer agreements: Usually set around a year, most digital marketing agencies use this pricing model simply because it gives security. By “subscribing” to the offer — monthly or yearly — agencies have ease of mind knowing they have clients and a constant stream to provide quality services. The average for this model is $500 to $10,000 per month for full-service packages.
  • Performance-based pricing: Mostly used by seasoned marketing agencies, this model asks for payments based on a pre-set performance metric. For instance, reaching 100 new followers can cost $100. The only drawback is that it’s unpredictable and may leave companies without payments.

There’s no rule stating you must choose one pricing model. Many companies offer different plans, so why not adopt this practice too?

Digital marketing is a large field, and not all clients will have the same needs and expectations. Because of this, you might want to be flexible when it comes to pricing. Moreover, facts such as the complexity of the project, the level of expertise required, and the time and resources involved might drive the cost of digital marketing.

Step #6: Set Up Your Online Presence

If you’re not online, does your business even exist? In today’s digital age, an online presence serves as a virtual storefront, allowing potential clients to discover your agency, learn about your services, and gauge your credibility.

If you want to boost your online visibility, there are many ways you can go about it. For example, you can consider:

  • Creating a professional website that is visually appealing and user-friendly while reflecting your brand and showcasing your expertise.
  • Implementing SEO best practices to boost your rankings in the SERPs
  • Leveraging social media platforms to engage with your target audience and build brand awareness
  • Developing a content marketing strategy focused on producing valuable content

Step #7: Get the Latest Tools and Technology

Equipping your digital marketing agency with the right tools and technology is crucial for delivering high-quality services, optimizing workflows, and staying ahead in the competitive landscape.

You must evaluate your agency's specific needs based on your service offerings, target market, and internal processes. Identify the areas where tools and technology can enhance efficiency, productivity, and client deliverables.

However, with thousands of tools available on the market, conducting thorough research is a must. So, before you jump the gun, determine a budget. Consider both upfront costs and ongoing subscription fees. Prioritize essential tools that directly impact client deliverables and operational efficiency.

Tools You’ll Need When Starting a Digital Marketing Agency

Some options you can consider are:

  • For all your design needs: Canva, Photoshop, or Procreate are great tools that can help you create great visuals to enhance the look of your digital marketing online presence. Canva, for example, is a free tool so if you’re on a tight budget this is a great place to start.
Canva home page used to present the tool as a key step in how to start a digital marketing company
Source: Canva

For website creation: Wix and WordPress are excellent tools you can use to create a website for your digital marketing agency. You can start with something small or use the paid options and add different integrations to tailor the site to your preferences.

WordPress homepage used to present how the tool can help people in the 8 steps of how to start a digital marketing company.
Source: WordPress

For analytics: Since we said that analytics are a must for every digital marketing company, you should use top-notch tools to give you accurate analytics. Google Analytics is a comprehensive tool that allows you to track your SEO efforts and analyze the usage of keywords, website traffic, and more. You can also use Insights in the Meta Business Suite or on the business Instagram account to track how your ads or overall performance is.

Google Analytics home page used to present the tool as a key step in how to start a digital marketing company

Source: Google Analytics

For project management: As a digital marketing agency, you’re sure to come to a point when you’ll have to juggle multiple projects. In such cases, it’s best to employ good project management tools to ease the job. Asana and Trello are great options for organizing your tasks and team members. You can also use Google Workspace if you need to collaborate with others and quickly share documents, edit content, or address mistakes.

Image of Google Workspace home page used to show that the tool can help in starting a digital marketing agency
Source: Google Workspace

For ad services: If your digital marketing agency offers ad services you must utilize several tools to help you track their performance. For PPC advertisements, you can use Google Ads or Microsoft Advertising (Bing Ads). However, remember that you need to track the budget you’ve spent so you don't end up wasting resources and thus losing clients. For that, tools like Hootsuite and Sprout Social are available. You can choose a plan that works best with your needs and subscribe to their services.

Alt text: Image of Google Ads home page used to show that the tool can help in starting a digital marketing agency

Luckily, many tools today can seamlessly integrate one with the other, so make sure you pick the right ones so you can streamline your work. Remember to continuously assess the effectiveness of the tools and technology you've implemented. Monitor industry trends and new advancements to stay ahead of the curve.

Step #8: Develop Strategic Partnerships

The final step is to develop strategic partnerships. By forging strong alliances with complementary businesses and professionals, you can offer comprehensive solutions, tap into new markets, and enhance your brand reputation.

Here are some tips to this process:

  • Identify businesses or professionals that offer services that complement your digital marketing agency.
  • Look for synergies where both parties can benefit from collaboration. For example, partnering with web design agencies, content creators, PR firms, or social media influencers can enhance your agency's capabilities and provide comprehensive solutions to clients.
  • Conduct thorough research to identify potential partners and evaluate their reputation, expertise, and client base.
  • Look for partners who share similar values, have a track record of success, and align with your agency's brand image.

How To Start a Digital Marketing Agency: Key Takeaways

Starting a digital marketing company requires careful planning, a deep understanding of the industry, and a relentless commitment to delivering exceptional results. By following these eight steps, you'll be equipped with the essential knowledge and strategies needed to launch and grow a successful digital marketing agency in today's competitive landscape.

Once your agency is live, do your research on how to get clients for digital marketing. Don’t forget to source inspiration from the top digital marketing agencies, but remember not to copy what they’re doing, but rather, identify their strengths and weaknesses if you’re to beat them at their own game.

How To Start a Digital Marketing Agency FAQs

1. Is a digital marketing agency a good business to start?

Yes, starting a digital marketing agency can be a good business opportunity. With the increasing reliance on digital platforms, businesses of all sizes, even small businesses, are seeking effective strategies to establish their online presence, attract customers, and drive growth.

2. What are the types of digital marketing agencies?

There are various types of digital marketing agencies, each specializing in different areas of online marketing. Some common types include:

  • Full-service digital marketing agency
  • SEO agency
  • Social media marketing agency
  • Content marketing agency
  • PPC agency
  • Web design and development agency
  • Email marketing agency

3. Is a digital marketing agency profitable?

Of course. Any business, if done right, can be profitable. You must first choose the type of digital marketing company you want to open, the niche in which you’ll work, and the target audience. Following the rest of the steps ensures you can create a brand that may bring profit.

4. Is starting a digital marketing agency worth it?

A digital marketing agency can be a good business idea if you’re set on making it. Any business will fail if you don’t put the effort into establishing it. Creating a digital marketing agency takes time, effort, and a lot of dedication which is why setting a clear business plan right from the start is the best way to ensure you keep walking the path and succeeding.

5. What are the differences between freelancing and running a digital marketing agency?

The main difference is that we’re talking about a company vs an individual. This means that a digital marketing agency can handle many different tasks, while a freelancer typically focuses on a few. Moreover, agencies provide consistency since they usually require contracts and have legal measures in place to safeguard both sides.

However, this makes agencies more expensive. Freelancers, on the other hand, are cost-friendly and flexible, allowing for more changes and adaptation to your requirements.

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