How To Start A Digital Marketing Agency PLUS 5 Tips To Start With No Experience

How to start a digital marketing agency: 

1. Select an agency type
2. Decide which services to offer
3. Choose a niche to target
4. Create a business website
5. Set pricing for your services
6. Hire the right support
7. Employ digital marketing tools 
8. Launch a digital marketing campaign to attract clients
9. Close clients
10. Showcase how your marketing efforts impact client revenue
11. Build a portfolio of work
12. Collect testimonials

Data from Promethean Research shows that there are currently over 45,000 digital marketing agencies operating in the US and Canada. Digital marketing agencies, like Ignite Visibility and Disruptive Advertising, help clients to carry out digital marketing initiatives that expand their business and revenue potential. Considering that the global digital marketing industry is expected to reach upwards of $786.2 billion by 2026, according to Global News Wire, now could be a great time to start a digital marketing agency and capitalize on the growing trend of businesses investing in online marketing channels like social media marketing and search engine marketing. 

1. Select an agency type

You can select from 3 types of digital marketing agency structures, including:

1. Single channel digital marketing agency
2. Multi-channel digital marketing agency
3. Full-service digital marketing agency

Single-channel digital marketing agency

A single-channel digital marketing agency focuses on serving just one area of digital marketing. For example, LinkDoctor.io is a single-service digital marketing agency that only serves clients through link building, which is an aspect of off-page SEO. Although focusing on only one service limits your ability to serve clients, it allows you to achieve a high level of expertise in your area of focus. This can allow you to establish your agency as the go-to agency for your specific service and charge a premium price for your services. 

Multi-channel digital marketing agency

A multi-channel digital marketing agency offers a range of complimentary digital marketing services. For example, eLink Design is a multi-channel digital marketing agency that does SEO and web design. SEO and web design are highly related digital marketing services because you can’t do SEO without first having a website and technical SEO relies on solid web design foundations. A multi-channel digital marketing agency allows you to serve a greater area of client needs while still remaining focused enough to establish a high level of expertise over your focus areas.

Full-service digital marketing agency

A full-service digital marketing agency offers the full spectrum of digital marketing services. For example, WebFX is a full-service digital marketing agency that offers everything from SEO and social media marketing to conversion rate optimization and marketing automation services. A full-service digital marketing agency enables you to serve the majority of clients' digital marketing needs. However, it requires extensive knowledge across the digital marketing industry and an adept team of digital marketing professionals to be successful. 

2. Decide which services to offer

Once you decide how to structure your agency, you need to decide which services to offer your clients. Digital marketing is a broad field with many potential service opportunities. The most common services include:

SEO 

Search engine optimization (SEO) is an online marketing approach that seeks to improve a website's position on search engines like Google, Bing, and Yahoo. Considering that 68% of online experiences start with the search engine, according to BrightEdge, SEO is a powerful digital channel. SEO services can be broken down into 4 categories, including:

1. On-page SEO services (Ex: keyword research, interlinking, Schema markup)
2. Off-page SEO services(Ex: link building, social mentions, guest posts)
3. Technical SEO services (Ex: site speed, security, indexation)
4. Local SEO services (Ex: Google My Business profile, citations, NAP consistency)

There is huge demand for SEO, with 63% of small businesses choosing to invest in the digital channel, according to PR Newswire. 

Social media marketing 

Social media marketing (SMM) leverages social media channels like Facebook, Instagram, TikTok, and Pinterest to reach online audiences and establish a brand’s online identity. With the average internet user spending over 2.5 hours per day on social media, according to DataReportal, social media platforms are one of the best digital marketing channels. Social media marketing can entail both organic and paid traffic.

For example, a social media marketing campaign can incorporate a content marketing component where social media posts are published consistently to generate organic traffic, and running paid advertisements, like a Facebook Ad, to push social media content in front of a target audience. These days, 77% of small businesses use social media to connect with their customers, according to Forbes. 

Mobile marketing

Mobile marketing is any advertising activity that targets audiences through mobile devices, like smartphones and tablets. Mobile marketing consists of digital marketing channels like text message, mobile apps, mobile search ads, and social media. According to the latest data from Statista, over half of all internet traffic is mobile, and has been for the last few years. With the average internet user spending 3 hours and 15 minutes per day on their smartphone, mobile marketing channels can offer an effective solution for reaching people where they spend a major portion of their day. 

Email marketing

Email marketing is using the digital channel of email to reach a target audience. Email marketing can entail sending promotional emails to a list of predefined customers to make them aware of new products, discount opportunities, or other brand news. Email marketing can also be used for cold outreach to new prospects, called cold email outreach. According to a report by OptinMonster, the majority 58% of internet users check their email before partaking in any other internet activities, like checking social media or using a search engine like Google. Email marketing provides an incredible ROI of 4,400%, according to data from Campaign Monitor. 

Content marketing

Content marketing is a digital marketing strategy that leverages creating and publishing relevant content to showcase a brand’s online authority and attract the right audience to the brand’s offer. Content marketing can entail creating written content like blog posts, white papers, or case studies, video content like video sales letters (VSL), long-form YouTube videos, or short-form TikTok videos, and social media content like infographics, digital artwork, and real photos. According to data from the Content Marketing Institute, the majority 73% of B2B marketers and 70% of B2C marketers use content marketing in their overall digital marketing strategy. As such, there is high demand for content marketing and the agencies that can provide high quality content to businesses. 

Video marketing

Video marketing is a major aspect of content marketing that uses video content to promote and inform audiences about a brand. Spending on video marketing is expected to reach $92 billion by the end of 2024, according to Social Pilot. As of the latest data from 2022, US adults are averaging a whopping 3 hours and 2 minutes per day consuming video content, according to Insider Intelligence. Video marketing can incorporate various video formats, like explainer videos, testimonials, interviews, product videos, social media videos, or commercials. 

PPC advertising

PPC advertising is using paid advertising channels like Google Ads, TikTok Ads, or Facebook Ads to target audience segments and push relevant advertisements in front of them on the internet. Pay-per-click advertising entails bidding for advertising space and paying a fee each time the advertisement is clicked on by a potential customer. The majority 65% of small to medium-sized businesses leverage PPC advertising, according to data from WebFX. Statista estimates that companies will spend over $190 billion on PPC advertising globally by the end of 2024. 

3. Choose a niche to target

Choosing a specific niche to target offers your digital marketing agency numerous benefits, including: 

4. Create a business website

A digital marketing agency operates in the digital landscape and so should have a website to carry out marketing initiatives. Creating a digital marketing website enables you to establish your brand identity and showcase your services to potential clients. It also allows you to expand your marketing capabilities with SEO and PPC advertising campaigns to reach more potential customers. 

Creating a business website for your digital marketing agency can cost as little as $50 for the first year, if using a cheap shared website hosting plan like Bluehost, securing your website domain from a low-cost domain registrar like Namecheap, and using free tools to build out your website, like using WordPress with the free Astra theme.

5. Set pricing for your services

Setting pricing for your digital marketing services enables you to better manage your profit margins and provide potential customers with the information they need to determine if they can afford your digital marketing services. When setting your pricing, you should take into consideration your cost to offer your services. For reference, the average high performing digital marketing agency commands a 50% to 60% profit margin, while a low-performing agency can expect 20% to 30% margins. The average digital marketing agency package costs between $2,500 and $12,000/month, according to global digital marketing agency WebFX. 

6. Hire the right support

Before you can start offering your agency services to potential clients, you need to hire people with the right skills to help you deliver your services. Although you certainly can start a digital marketing agency by yourself in the beginning, hiring support early can allow you to offer better service in the beginning if your own skills are lacking. Hiring early also allows more time for your employees to operate within your systems and niche, which can make it easier to scale your business. Most digital marketing agencies in the US and Canada still function on the smaller side, with the majority 64% of agencies operating with 1-10 employees, according to data from Promethean Research. 

There are many places you can find digital marketing talent online. For example, you can post your job opportunities on LinkedIn if you want to hire permanent workers. Platforms like Upwork and Fiverr are great for finding freelancers for both short and long-term employment engagements. Offshore employment sites like OnlineJobs.ph are great for hiring more affordable support from overseas for trainable positions like virtual assistant. 

7. Employ digital marketing tools 

To carry out digital marketing campaigns for your clients successfully, you’ll need to employ digital marketing tools to support your efforts. Digital marketing tools can help you research, implement, and track digital marketing initiatives. 

What are the most popular digital marketing agency tools?

8. Launch a digital marketing campaign to attract clients

Launching a digital marketing campaign allows your business to start attracting potential clients. Marketing budgets should typically comprise 5% - 30% of your total revenue, according to SEMRush. It’s often best to focus your marketing efforts on the services that your agency offers. For example, an SEO agency could create SEO-optimized blog content to attract their target niche to their SEO services. This enables you to practice the digital marketing services you offer and show potential customers that you can implement those services effectively. 

You can also branch out your digital marketing beyond your primary services. For example, NP Digital founder Neil Patel has been able to secure lucrative contracts with Fortune 500 companies like Amazon, Microsoft, and Google by going beyond just a website blog. He creates informative YouTube videos, co-hosts the Marketing School Podcast, and speaks at major marketing conferences like Affiliate World to attract premiere clients to his agency. 

9. Close clients

Closing clients entails converting potential clients into customers so your agency makes money. A successful digital marketing campaign should enable you to book meetings with interested potential clients, that you must then sell on the idea of paying your agency for its services. However, closing clients, especially your first clients, can be difficult. 

Derek DeMike from the YouTube channel 2GuysBuildaBiz offers the following tips for closing clients that he has accumulated through the trials of his own social media marketing agency. 

10. Showcase how your marketing efforts impact client revenue

Instead of simply focusing on vanity metrics, like the number of website clicks or social media interactions that your marketing efforts resulted in, you should show your clients how your digital marketing efforts actually affect their revenue. If your digital marketing agency is actually providing value to the business, then helping the business to understand this value can help with long-term client retention.  

11. Build a portfolio of work 

Building a portfolio of successful client work helps to establish your agency’s authority by showcasing who you have performed work for and the results your digital marketing efforts resulted in for them. It serves to convince potential customers that working with your agency can benefit their business. Besides listing the client and the results you generated for them, you can create comprehensive case studies to dive deep into your marketing efforts and their results to really showcase the impact of your services. This information can go directly on your website for potential clients to see when browsing your service offerings. 

12. Collect reviews and testimonials

Reviews and testimonials from past clients are another major selling point you can use to secure more clients for your business. In fact, data from Big Commerce shows that 92% of online customers consider reviews before making a purchase decision. Therefore, it’s essential to establish a process to collect reviews and testimonials from your customers to incorporate into your website and other marketing channels.

How much does it cost to start a digital marketing agency?

It costs between $62 and $41,111 to start a digital marketing agency, according to data by Starter Story, with an average cost of approximately $23,698. The cost to start a digital marketing agency depends on a variety of factors, like the founder’s digital marketing skill set, which digital marketing tools are needed, and the specifics of the agency’s digital marketing campaign. The primary costs to consider when starting a digital marketing agency are:

• Website development and hosting: $50 - $10,000+
• Digital marketing tools: $0 - $5,000+/year
• Digital marketing campaign: $0 - $5,000+/month
• Human resources: $0 - $5,000+/month

Is it profitable to start a digital marketing agency? 

It is profitable to start a digital marketing agency, with most agencies generating between 20% to 60% profit margin, according to online business acceleration platform The OMG Center. Profit margins can depend on a variety of factors, including the business acumen of the agency founder, the scale of the agency, whether or not the agency operates remotely, and the services that the agency offers. 

Different digital marketing agency profit margins explained

• PPC digital marketing agency: 10% - 30%
• SEO digital marketing agency: 11% - 20%
• Social media marketing agency: 11% - 20%

These are some of the different digital marketing agency profit margins explained. 

How much does a digital marketing agency owner make?

A digital marketing agency owner makes $98K/year on average, according to the most recent data from Glassdoor. The typical range is between $75K to $130K.

Can you start a digital marketing agency with no experience? 

Yes, you can start a digital marketing agency with no experience. In fact, Reddit user goingApeShit_ claims to have started their own digital marketing business with no experience and grown their business into an award-winning digital marketing agency in the US over 12 years of operation. Their background in sales and project management provided a strong base to start and grow their digital marketing agency.

5 Tips for starting a digital marketing agency with no experience

1. Start by learning what a digital marketing agency does

You can't start a digital marketing agency without knowing the ins and outs of what a digital marketing agency does. If you have no experience, you may have the wrong expectations around starting an agency. 

2. Handle client management and outsource marketing implementation

If you don't have any digital marekting skills yet, you can focus on the client management and other administrative aspects of your business, while outsourcing the actual marketing implementation to freelancers. 

3. Focus on just a few digital marketing agency services

Focusing on just a few digital marketing agency services in the beginning is much more manageable than implementing processes for many services.

4. Package and sell digital marketing agency services to ensure profitability

90% on online businesses fail within the first four months, according to Entrpreneur magazine. If you want to avoid your digital marketing agency failling, make sure to package and sell your digital marketing agency services so that you can ensure profitability. 

5. Learn from one of the best digital marketing courses

If you have no experience, you shoud probably at least learn the basics by taking one of the best digital marketing courses, such as 6-Figure Agency by Billy Willson. 

What are some ways to grow and scale your digital marketing agency? 

These are just a few of the ways to grow and scale your digital marketing agency. 

Is it worth starting a digital marketing agency? 

Yes, it is worth starting a digital marketing agency. The digital marketing industry is expected to grow at a strong 13.9% cumulative annual growth rate through 2030, according to Yahoo Finance. 58% of small businesses currently use digital marketing, according to Colorlib. That means the majority of businesses already believe in the power of digital marketing, and there are still a substantial number of businesses out there that have yet to adopt a strategy for it. Starting a digital marketing agency enables extensive freedom and flexibility compared to many other business models, so it can definitely be worth starting for those who value more freedom in their lifestyle. 

Conclusion: Is offering services the best way to make money in digital marketing? 

Offering services is not the best way to make money in digital marketing. There are other opportunities in digital marketing, like local lead generation and affiliate marketing, that enable you to make passive income. When offering agency services, you are essentially just trading your time for money. Although offering agency services can be the easiest way to start making money with digital marketing, there are other opportunities better in the long-term if you want more time freedom and scalability potential in your buisiness.

For example, you can create local lead generation websites that can generate $500 to $3,000/month without you needing to do any active work. Local lead generation entails creating a website that attracts customers for a local service business in a specific geographic location. Using local SEO, you can create websites that show up on Google when people search for local services in their area, such as plumbing in Dallas. When a potential customers lands on your site, you can send the link over to a real service business in the location to earn money for your digital marketing efforts. 

Local lead generation partnerships typically last for the long term because a lead generation website provides a reliable and consistent stream of customers for a local business. Local lead generation websites typically require little maintenance or overhead, and most of the aspects that require some attention can be automated with tools and freelancers. This enables local lead generation website owners to generate passive income online. Learn more about starting your own local lead generation digital marketing business with this local lead gen training program.