How to Start a Digital Marketing Agency (2023)

Are you interested in starting your own digital marketing agency? If so, you’re in luck!

This blog post will discuss starting a digital agency in 2023.

We will cover everything from setting up your business structure to hiring your first employees.

So, whether you’re just starting or looking to take your business to the next level, this blog post is for you.

Don’t worry. You’re in good hands. I started a digital agency in my early twenties and went on to a multi-million dollar exit four years later.

First, What is a Digital Marketing Agency?

A digital marketing agency is a business that uses expertise in multiple areas of marketing, including:

• Search Engine Optimization (SEO)
• Website Design
• Digital Advertising
• Content Creation
• Email Marketing

And other related services to increase its clients’ online visibility and engagement.

It takes specialized knowledge to make your digital marketing strategy effective; any business, large or small, can benefit from the skills of an experienced digital marketing agency. 

Depending on the goals of the business or individual looking to start a digital agency, tasks such as 

• Creating SEO strategies
• Crafting content strategies
• Managing social media accounts
• Creating video campaigns
• Analyzing data

It might all be part of the job.

For example, if you take an established business and want to help them reach more customers online by developing its website and running targeted ads on Facebook or Google Ads, you would use a digital agency.

What are the Potential Profits of a Digital Marketing Agency?

Profits for digital marketing agencies have more than doubled since 2016, and they don’t show signs of slowing down.

Typically speaking, you’re looking at a 2% profit margin (on the very low end) and a 60-70% profit margin on the high end.

When you first start out, you’ll be doing everything yourself, so you can expect to earn more (or almost all) profit. However, as you go on to hire additional employees, get more expensive software, etc. those things will be eating into your profits.

Many businesses are shifting their marketing budgets away from traditional media like print, and turning towards digital campaigns, so starting a digital marketing agency can be a lucrative business endeavor with the potential to generate large profits. 

To maximize profits, a digital marketing business should:

• Prioritize developing strategies that capture customers’ attention and drive engagement, such as video and interactive content
• Use analytics to track how its campaigns are performing.
• Focus on creating long-term relationships with clients
• And continually explore new opportunities, such as establishing partnerships with other businesses or expanding into different industries.
• Always keep an eye on the bottom line.

By working with innovative tools and methods, such as A/B testing or influencer campaigns, your digital marketing business has the capacity for great success for yourself and your clients.

Digital Marketing Agency Pros and Cons

Starting a digital marketing business has the potential to earn you significant profits, but that doesn’t mean it’s right for everyone.

Consider the pros and cons when researching how to start a digital marketing agency to determine if this is the career for you. 

Pros

Very Little (If Any) Start-up Costs

One of the biggest pros of starting a digital agency is that you can avoid debt and operate completely from your own resources. 

Provided you already own basic equipment such as a computer, phone, and internet connection, you can build your business without many major investments like leasing an office.

There are some (mostly optional) start-up costs associated with starting a digital marketing agency, such as:

• securing a domain name
• obtaining professional logo design services
• investing in training courses to stay ahead of new industry trends

That being said, plenty of low-cost and even free platforms help you create websites, blog posts, social media pages, and other essential components of your new digital marketing business.

In the end, the financial burden is negligible compared to how beneficial it could be for your growth and success – that’s why starting a digital marketing agency can be so appealing if you have little (if any) upfront capital!

High Margins

Starting a digital marketing agency is an excellent way to capitalize on the growth of the digital realm. 

With how quickly technology, trends, and audiences are always changing and growing, businesses need help staying up-to-date and connected to their target market.

• This enables companies to grow a successful business while investing little in the right tools and resources to help them stand apart from their competitors.
• As a result, digital marketing agencies are increasingly in demand, creating high margins for agencies to capitalize on.

Overall, the high margins of running a digital marketing agency help illustrate why those who understand how to tap into today’s rapidly-changing digital world could reap great rewards for their efforts.

Time Vs. Capital Intensive

Starting a digital marketing agency is the perfect opportunity for those with little capital to invest but plenty of time.

In fact, many of the steps it takes to start a digital marketing agency require no financial investment at all. All you need to spend is a little bit of time.

For example:

• Building your brand story and determining how you distinguish yourself from competitors requires research and strategy development.
• Building relationships with potential clients requires networking and maintaining interest.
• Understanding how to use an array of tools designed to help you reach your target customers requires study and practice.

The bottom line is that if you’re a go-getter and have the time and resources to learn how to start a digital marketing agency, you can become successful without investing much capital. 

Cons

When starting a digital marketing agency, there are only two main cons to consider before deciding if this is the right business for you.

Clients Can be Tough

Starting a digital marketing agency is challenging, especially when dealing with clients.

Managing a client-business relationship can sometimes be frustrating, from unrealistic expectations to conflicting communication methods.

It’s important to remember that clients will likely have big ideas and little knowledge of what it takes to run a successful digital marketing campaign.

It’s essential for you as an agency to develop a strategy for managing their expectations to prevent any difficulties.

For example:

• Before starting your campaign, let clients know what they should expect concerning time, budget, and limitations. This way, you can decide if you are a good fit for each other. Remember, it’s better to underpromise and overdeliver than the other way around.
• Establish ground rules for communication early on- ask questions about how they want their project handled, their goals, and how often they need reports or updates.
• Remember the power of positive customer service – actively listen to feedback and be patient when communicating with clients. Remember, you are the expert, and clients look to you for advice and guidance.

Clients can be challenging, but if you adhere to these tips, your digital marketing agency will thrive!

It’s Hard to Scale

Scaling a digital marketing agency is incredibly challenging because you must always be up to date on the latest trends and strategies for different industries.

To scale successfully, one must identify how to retain previous customers and consistently acquire new ones.

Here are some tips for how to start a digital marketing agency that might help you be prepared to tackle scaling challenges: 

• Research industries: Take the time to research how different industries use digital marketing and how that changes over time.
• Invest in quality content creation: Quality content creation is the core of any digital marketing agency’s success, so make sure you invest in creating content that’s engaging and relevant to your target audience.
• Establish a presence on social media: Social media is how many digital marketing agencies find success, so make sure you take advantage of all the platforms available to you by establishing a presence on Twitter, Facebook, LinkedIn, Instagram, and other popular networks.
• Focus on customer satisfaction and retention: You will acquire most of your business from existing customers, so prioritize customer feedback and focus on providing the best customer service possible.
• If possible, try and niche down. Niching your agency will help automatically differentiate you from the sea of competitors.

With the right strategy, businesses can effectively scale a digital marketing agency for long-term success.

Steps to Starting A Digital Marketing Agency

So, you’ve equipped yourself with the knowledge and are sure that starting a digital marketing agency is the right business opportunity for you. 

The next step is taking action! Follow these seven steps to learn how to start a digital marketing agency!

Step 1: Pick a Service Offering

The first step is to pick a service offering for your digital marketing agency.

There are many digital marketing services you can offer, such as:

• search engine optimization (SEO)
• pay-per-click (PPC) advertising
• website design
• social media marketing
• content creation

To ensure you can serve all clients, consider offering multiple service packages and designing custom packages tailored to meet their needs.

Additionally, ensure that you are up-to-date with the latest trends and digital marketing strategies to provide quality services to your customers. 

You can create your own innovative digital marketing agency with hard work, clarity of vision, and effective strategizing.

Step 2: Pick a Niche

Picking a niche to focus your digital marketing agency on can be one of the most important decisions you make as you start a digital marketing agency.

Identifying a specialty you can be an expert in and then leveraging that knowledge to market other businesses with similar needs successfully is how digital marketing agencies are born.

Having a niche allows you to target a specific audience and provide more value to potential customers.

Your expertise in this field can allow you to apply successful search engine optimization strategies for plastic surgery doctors.

This will help you stand out from other digital marketing agencies who may not have specific knowledge in this niche and capitalize on this particular market corner. 

Some tips to consider when identifying your niche are:

• Think of an area you have experience in or a service that your competitors are not offering
• Research underrepresented industries and how you can market to them
• Research into what kind of services infrastructure are already in place for your niche and how you could expand upon them
• Consider how competitive your niche is and how quickly your target market will adopt new marketing trends.

Considering these points can help you create a competitively profitable offering while still providing customers with quality services that only you can offer.

Horizontal Vs. Vertical Niching

Horizontal Niching is a strategy where you offer multiple services to one niche of a client. This is how many successful digital marketing agencies start, and it can be a great way to gain experience in multiple fields while still being able to focus on a core service or specialty.

Example: You offer SEO, Social Media Marketing, Web Design, Adwords, etc. to attorneys.

Vertical Niching, on the other hand, is when you one service offering and you offer it to everyone. This helps you become a specialized expert in one field and build a reputation for providing excellent results within that niche.

Example: You offer SEO to everyone.

Vertical & Horizontal Niching is when you offer one service to one particular type of client.

Example: You offer SEO to attorneys.

I’m a huge fan of starting horizontally and vertically niched because it differentiates you from your competition with little to no experience.

Step 3: Build a Website

In the digital world, having a well-designed website is essential for product promotion and reaching potential customers. 

Having a well-designed, professional website helps you establish yourself as a credible digital marketing agency and serves as an online portfolio for your work.

Creating an inviting website that reflects your brand and conveys trust is essential.

The right website can:

• highlight the high quality and success of your services
• demonstrate how you can provide customers with solutions to their problems
• exhibit how reliable and knowledgeable you are about the industry.

Here are some tips to keep in mind when building the perfect website for your digital marketing business:

• Ensure your content is tailored for SEO optimization so potential clients can easily find you online.
• Make sure you design your website with the user in mind. Create a site that is intuitive to navigate and understand so that visitors can easily access all of your information.
• Include a section for testimonials so potential customers can feel confident in your services.
• Create a blog with articles that educate readers on how you create value for clients and how to utilize digital marketing strategies

From optimizing the design for multiple devices to crafting eye-catching content that captures user attention, all the way through planning how you will measure success and track results from analytics insights – these are essential steps toward ensuring your website is successful.

Creating a well-designed website will help ensure it’s effective in driving new business for your digital marketing agency.

Step 4: Start Cold Calling Your Niche

Starting a digital marketing agency requires strategic marketing techniques and finesse. 

To kick off your journey, consider cold calling your niche.

Cold calling is contacting potential customers, often by telephone (though text and email are increasingly standard), to solicit business potential.

It can be intimidating because it requires taking risks and putting yourself out there.

However, once it becomes comfortable, it can mean significant strides in how quickly you can grow your digital agency.

Here are some tips: 

• Start small by researching small businesses in your area that you believe could benefit from your services
• Create an inviting pitch to make sure potential customers understand how you can help them
• Get straight to the point and offer a brief explanation of how your services can benefit their business
• Offer incentives like a discount on the first month of service or additional services in exchange for referrals
• Tailor each call to each business and how your services will benefit them in their unique situation

Cold calling is an effective way to grow your digital marketing agency quickly, and it will help you get the word out about how you can help businesses succeed. 

Step 5: Focus Heavily On Your First Customers to get Case Studies

Once you’ve established your business and started taking clients, focus heavily on your first few clients. 

Everything that happens with your first clients will determine your digital marketing agency’s success.

Not only do you want to ensure your clients are happy with your services, but it is also important to document how well your strategies worked for them.

 That way, you can revisit these studies and identify your strengths and where you can improve for your next campaign.

These case studies should be detailed and include the following: 

• how you identified the problem
• how you solved it
• how long it took
• how much did it cost
• if your client had any unique challenges
• how you measured success
• what the results were
• how you followed up with the client

Not only will these case studies provide you with the information you need to grow your business, but you can also use them to show clients how effective your strategies have been in the past and how they can benefit from working with you. 

Step 6: Create SOPs Around Your Processes

Once you have identified how to start a digital marketing agency and the steps required to set it up, it is time to create standard operating procedures (SOPs) for each process.

SOPs will provide structure and guidelines for how your business should run and how you should accomplish each task.

These are essential to ensure you and your team complete tasks consistently and accurately, streamline operations, and maintain quality performance.

Some tips for creating successful and effective SOPs include:

• Breaking tasks into smaller steps,
• Developing checklists for each task
• Assigning clear roles and responsibilities

Remember that SOPS help your business run as smoothly as possible, so it’s important to be flexible. 

Regularly review your SOPs and make changes if anything isn’t working.

Having the right SOPs in place will make a difference regarding how efficiently your digital marketing agency runs and how successful it becomes.

Step 7: Hire an Assistant (When You’re Ready)

Once you’ve established how to start a digital marketing agency and how to manage the different aspects of your business on your own, it is time to start thinking about hiring an assistant. 

You will know it’s time when you are having difficulty keeping up with the number of tasks and deadlines or when anxiety about not having enough hours in the day becomes too frequent.

Having an extra pair of hands can save you a ton of stress and significantly improve how efficiently everything gets done. 

The right assistant can:

• take on administrative tasks like managing your emails and calendar
• handle
• customer service inquiries
• manage your blog or social media accounts
• help with research
• schedule appointments
• track progress on tasks and projects

And much more.

Ideally, your assistant will be with you long-term, so you want to ensure you hire the right person. 

Some qualities to consider when hiring an assistant for your digital marketing agency are:

• similar goals and values as you
• good understanding of the digital marketing industry
• strong organizational skills
• great communication
• detail-oriented
• ability to take initiative
• technical know-how
• creativity

Having a great assistant on board can make your digital marketing agency more productive and successful, so be sure to invest in the right person when you’re ready. 

Final Thoughts

Starting a digital marketing agency is an exciting career choice for those interested in creating innovative solutions and growing new businesses.

With the growing need for digital marketing services, there is excellent potential to succeed in this field.

Although much of the process can be daunting, it’s essential to take one step at a time and learn from successes and mistakes.

We’d love to hear what steps you plan to take when setting up your digital marketing agency – let us know in the comments!

Frequently Asked Questions