How to Start a Digital Marketing Agency in 2023 + Best Guide

According to statistical projections, in 2023, about 570 billion dollars will be spent on digital advertising, which is 16% more than in 2021. These impressive numbers didn’t just arise for a reason: today, companies in all industries, be it apparel or construction, are deciding to start a digital marketing agency to promote their services and capture consumers’ attention.

A digital marketing agency brings together professionals from different fields, from copywriting (SEO writer, editor, or paper writer) to programming (Frontend/Fullstack Developer, etc.), who work in one team for a common goal – to create a quality advertising product. 

If you’ve been developing in the creative sphere for a long time, you might want to think about entering a new stage. In this piece, we cover the basic intricacies of how to start a digital marketing agency.

Digital Agency – What Is It?

Digital marketing agencies offer brands a full cycle of promoting their products or services online. Companies can deal with individual tasks or offer a range of services. 

With the rise of e-commerce, now is a great time to start a digital marketing agency and help businesses establish their online presence. Here are the most popular services of modern digital agencies: 

• Web development: creating and maintaining websites, including design, programming, and optimization.
• Digital marketing: planning and implementing online marketing campaigns, including search engine optimization (SEO), contextual advertising (PPC), content marketing, etc.
• SMM: managing clients’ social media accounts, creating and publishing content, interacting with audiences, and analyzing results.
• Branding: developing brand strategy, creating logos, corporate identity, and its components.
• Promotion: development and launch of online advertising campaigns, including search engine and mobile advertising, banner advertising, social media targeting, etc.
• Analytics: Collecting data and analyzing the results of marketing campaigns to assess their effectiveness.
• Reputation management: monitoring and managing clients’ online reputation, including PR, social media, and search engine outreach.

To start a digital marketing agency, one must possess a deep understanding of various online platforms and marketing techniques. Remember, Services may vary depending on the specific digital agency and its focus. The list above includes basic client requests – tasks for which there is active demand.

How to Start a Digital Marketing Agency: Types of Agencies

A digital agency can be categorized according to various criteria:

• Size. Companies can be small (a small team of specialists providing services in a narrow niche), medium, or large (wide range of services, large team). 
• Specialization. For example, some agencies focus exclusively on SEO optimization, while others focus on social media, content marketing, e-commerce, etc. 
• Business model. While one company offers clients a full range of services, another may specialize in additional tasks: consulting, training, reputation management, paper writing services, and so on.
• Industry. Sometimes agencies prefer to go into narrow and complex niches, such as medicine, finance, technology, or retail, to understand the industry’s characteristics and requirements better.
• Type of engagement. B2B (“business-to-business”) agencies work with businesses, while a B2C (“business-to-consumer”) approach focuses on the individual – the end client. 

It is necessary to think about your positioning at the first stages before you start a digital marketing agency: it will allow you to decide more quickly on your team, target audience, and budget. 

3 Steps Before You Start: What Is Important to Consider?

Starting your own business is always a very time-consuming and complex process. In order not to be atomized by all the tasks and spend your energy only on the necessary, you need to be able to separate the key things from the secondary ones from the very beginning. 

Here are the three steps you need to take at the beginning of your journey to owning your marketing agency:

#1 Essential Soft-Skills

Who should start a digital marketing agency? Experienced colleagues agree that this person should possess at least three skills:

• The ability to adapt quickly to changing circumstances. Digital marketing never stands still, and trends change at cosmic speed. You must be open to change and willing to take risks.
• Willingness to learn. You need to absorb large amounts of information quickly, especially if you plan to focus on SEO or digital marketing. These are the most fickle niches where the ability to grasp information on the fly is an essential skill.
• Strong communication skills. The owner of a digital agency needs to constantly communicate with people: team, clients, contractors, and future employees.

In turn, the most important hard skill you need to start your business is professionalism in your business, backed up by years of experience. You should start your digital agency if you’re getting crowded in a freelance or for-hire environment: there’s no shortage of clients, and there’s not enough time in the day to work alone.

#2 Pricing and Budget

Detailed analytics and many calculations are behind the screen of any business. For an agency to break even and make a profit, you need to carefully calculate the pricing of your services and determine a budget for the startup. 

There is no single amount to start a digital agency, but there are universal expenses that should be budgeted at the business planning stage:

• Company registration and paperwork;
• salaries of employees and contractors;
• payment of taxes;
• office rent or subscription to the necessary services for remote work;
• advertising costs;
• website creation.

#3 Correct Positioning

A common mistake of startup agencies is trying to provide a full range of services from the beginning. Entrepreneurs mistakenly believe that this way they will cover a wider market and insure themselves against a drop in demand for their services.

The problem is that, at the very beginning, companies don’t yet have the capital to hire business professionals in each area they offer (SEO, PPC, etc.). As a result, the quality of the agency’s services becomes quite mediocre, directly affecting profits.

To avoid miscalculating, you need to think carefully about your positioning: who you will work with and what you will do. Owners of successful agencies often advise newcomers to limit themselves to one or more areas in which they specialize best. As you develop and demand increases, you can hire experts who are pros in other areas, thus covering related fields.

Pro Tip: Here are 5 best practices before choosing a digital marketing career.

5 Questions to Ask Yourself Before You Start

Before we talk directly about how to start a digital agency, you need to consider your decision carefully. Ask yourself these five questions to check how ready you are to start your own business.

#1 Is There a Demand for Your Services?

Consider whether consumers need the services you provide enough. Do you have a lot of clients now (if you’re freelancing), and how do you plan to increase that number?

#2 Can You Deliver Results?

Soberly and honestly evaluate your journey to determine how well you achieve your goals. Growing your digital agency is much more difficult than advancing on your own, so you should have no doubts about your determination.

#3 Are You Capable of Building a Team?

Running your own business is always a continuous communication with people. Many businessmen say that selection of people and distribution of responsibilities in a team is as important as hard skills. How good are you at managing your employees?

#4 Are You Committed Enough?

When you start a digital marketing agency, too much is at stake. Running any business is a long-term commitment to your clients and employees. You need to be able to take responsibility and allocate resources wisely to justify people’s trust.

#5 What Do You Expect From Your Agency?

Any journey starts with setting goals. Think about what results you expect from yourself in a month, six months, a year, and five years. Having a clear understanding of what you are aiming for clarifies many things.

Conclusion

Starting a digital marketing agency involves defining your focus and size, acquiring essential skills, and careful financial planning. Strategic positioning is key to delivering quality services and avoiding early overextension. 

Aspiring founders should introspect about service demand, capability, team management, commitment, and goals. In a rapidly evolving digital landscape, these considerations are vital for success.