8 Types of Marketing Agencies: How Does Each Business Model Work? - Ippei Best Online Business
The 8 types of marketing agencies are:
- Digital marketing agency
- Advertising agency
- Social media marketing agency
- PR agency
- Content marketing agency
- Influencer marketing agency
- Creative marketing agency
- SEO agency
Marketing service agencies are companies that:
- provide product promotions.
- provide service promotions.
- analyze audience segments.
- maps customer journeys.
- generate high-potential leads.
A marketing agency works by identifying target markets and developing omnichannel marketing strategies. It performs competitor analysis and market research to help businesses drive sales through branding and content creation.
Marketing agencies are profitable online businesses. BusinessDojo reveals that marketing agencies make $5,000 to $50,000 monthly on average. This can go as high as $5 million yearly for mid-sized agencies. As per StarterStory, marketing agencies earn an average profit margin of 23%.
Jason Swenk, a marketing agency coach, states that the average profit margin for a marketing business is 20% to 30%. To increase revenue, he suggests targeting better clients and expanding marketing specializations. Agency owners can raise their rates while offering high-value services.
Marketing agencies are in demand because businesses need promotional campaigns that drive results. These targeted advertisements create brand awareness, promote consumer engagement, and generate revenue. I know the challenges of finding customers because I’m a business owner. I generate leads through local organic marketing. This strategy has helped me earn passive monthly income for over 10 years now.
This article dives into the different types of marketing agencies you can start or hire. We feature top services like PPC advertising and content management. We also provide examples of popular marketing tools, such as Google Analytics and Semrush. Finally, we reveal how agency owners and businesses can generate leads successfully.
1. Digital Marketing Agency
A digital marketing agency is also called a full-scale marketing agency. It has a diverse service coverage, such as social media, SEO, and paid ad management. It uses customized marketing strategies across different digital channels. Digital marketing agencies are in demand because of high internet penetration rates. This has pushed 63% of businesses to increase their digital marketing budgets (HubSpot). Some well-known digital marketing agencies are SmartSites and Thrive.
| Advantages | Challenges |
|---|---|
| Handles multiple marketing services and channels | More competitors because of diverse niche markets |
| Diverse income opportunities because of many marketing specializations | Difficulty keeping up with modern marketing platforms |
| Open to using more tools and technologies | Requires more resources (Ex: workforce, tools, etc.) |
| Wider consumer and market reach | Involves customized data and analysis strategies for each client |
| Top Services | Search engine optimization, content marketing, and paid ads |
|---|---|
| Average Cost | $2,500 to $10,000 (WebFX and On The Map Marketing) |
| Income Potential | StarterStory reveals that digital marketing agencies make $184,100 monthly on average. |
One Redditor suggests building a social media presence first. He says that some digital marketing agencies pitch services they can’t even apply. Another Reddit user says that building a digital marketing agency takes time. This process has a lot of trial and error.
2. Advertising Agency
Advertising agencies handle the planning, creation, and implementation of advertising campaigns. These include mediums like online platforms, radio, and television. They research the latest ad trends to develop engaging advertisements that drive interest. An advertising agency secures strategic ad space to target specific customer segments. They also negotiate the fees associated with these spaces. This agency type is popular because most businesses use paid ads to widen their reach. In fact, 75% of consumers say that “paid ads make it easier to find” the products they need (GrowthScribe). TRAFFIK and Ogilvy are some of the top advertising agencies globally.
| Advantages | Challenges |
|---|---|
| Offers fresh and engaging advertising ideas | Requires bigger budgets over other agency types |
| Has broader advertising knowledge and skill set | Entails extensive knowledge of paid ad platforms like Google Ads and YouTube Ads |
| Strong focus on the cost of ads and clicks to gain significant ROI | Increased pressure from generating higher click-through rates |
| Maximizes in-depth data to launch high-converting ads | Balancing creative ideas and client budgets and expectations |
| Top Services | Ad campaign management, ad performance monitoring, and PPC advertising |
|---|---|
| Average Cost | $900 to $20,000 (WebFX) |
| Income Potential | Karl Sakas states that independent ad agency owners make around $8,300 to $41,600 monthly. |
3. Social Media Marketing Agency
A social media marketing agency focuses on promotions on different social media platforms. Some famous ones are Instagram, TikTok, and Facebook. They use the client’s goals and needs to develop a personalized social media strategy. This type of agency manages online communities, content creation, customer communications, and ads. Social media marketing agencies (SMMAs) also track clicks, comments, and engagement. Brands need SMMAs because 62.3% of the world’s population actively use social media (Kepios). Some famous SMMAs are LYFE Marketing and Sociallyin.
| Advantages | Challenges |
|---|---|
| Offers deeper audience interaction with more personalized campaigns | The need to continually update content because of algorithm changes |
| Knowledge of various social media platforms (Ex: Facebook, Instagram, and X) | Requires a diverse skill set because social media platform features are distinct |
| Tailors social media posts and engagement that meets business goals better | Handling negative engagement should be quick and professional |
| Requires a lower budget because social media platforms are free | Requires keeping track of the latest social media trends |
| Top Services | Social media content management, community management, and paid social advertising |
|---|---|
| Average Cost | $500 to $10,000 per month (Sprout Social) |
| Income Potential | According to AgencyAnalytics, SMMAs earn around $1,500 to $25,000 monthly per client. |
This Reddit user recommends learning the basics of marketing before starting an SMMA. He highlights the importance of understanding customer behavior and triggers. Plus, he also suggests watching YouTube videos to learn common SMM services.
4. PR Agency
Public relations (PR) agencies help businesses develop a positive public image. They use engaging marketing strategies to shape public opinion. Some examples include press releases, online competitions, and product-based games. They work with journalists, media organizations, influencers, nonprofits, and large corporations. PR agencies are in demand because they generate content that increases positive exposure. According to most journalists, only 25% of PR pitches are relevant (Cision). So, it’s crucial to choose reputable PR agencies. Some top ones in the industry are Edelman and Ketchum.
| Advantages | Challenges |
|---|---|
| Has proven strategies for reputation and exposure management | PR services can be expensive because they require experts and ongoing industry relationships |
| Negative publicity and crisis management expertise | The need for consistent messaging across different channels |
| Has good relationships with media outlets, journalists, influencers, etc. | Difficulty with ROI tracking due to intangible performance metrics |
| Has an in-depth understanding of industry needs and demands because of extensive connections | Requires adapting to evolving media trends and technologies |
| Top Services | Digital PR (news sites, online forums, etc.), online reputation management, and crisis management |
|---|---|
| Average Cost | $150 to $250 per hour (R Public Relations) |
| Income Potential | Gould+Partners’ report states that PR professionals at an agency earn $22,750 on average per month. |
5. Content Marketing Agency
A content marketing agency creates, customizes, and optimizes any promotional content. This includes written, audio, and visual content on various marketing channels. Some in-demand examples are podcasts, case studies, videos, blog posts, and ebooks. Content marketing agencies create raw files or license existing media. They tailor content to meet their clients’ customer profiles. They also handle content calendars, publishing schedules, and KPI monitoring. This agency type is popular because 90% of businesses use content for their marketing projects (Demand Metric). Some known global agencies are Siege Media and Animalz.
| Advantages | Challenges |
|---|---|
| Predictable income because of the increased demand for high-quality content | The need to adapt to changing content writing trends |
| Expertise in different content types (Ex: website copy, videos, podcasts, etc.) | Possibility of plagiarism and copyright issues for unchecked content |
| Reliable experience with content planning and publishing | Measuring results from content marketing campaigns takes time |
| Access to more content generation specializations (Ex: writing, graphic editing, etc.) | High competition because of the availability of freelancers |
| Top Services | Content strategy, calendar management, blog management, and content creation (infographics, articles, case studies, etc.) |
|---|---|
| Average Cost | $5,000 to $20,000 per month (Jordon Barnett's LinkedIn article) |
| Income Potential | Impact Networking reveals that content marketing agencies earn $2.77 per $1 spend. This leads to around $83,000 in revenue monthly (StarterStory). |
This Redditor concurs with the rise of AI in generating content. But, he says that content marketing agencies will continue to be in demand in 2025. AI can’t replicate the “creative spark and storytelling finesse” that agencies have.
6. Influencer Marketing Agency
Influencer marketing agencies connect influencers with businesses to promote products and services. They manage rate negotiations, content planning and implementation, and campaign optimization. Influencer marketing agencies are experts in tools like Upfluence, CreatorIQ, and Traackr. They also know the ins and outs of platforms like TikTok, YouTube, and Twitch. This type of marketing agency is popular because 84.8% of brands experience growing returns (Influencer Marketing Hub). Moburst and Influential are some of the top influencer marketing agencies worldwide.
| Advantages | Challenges |
|---|---|
| The popularity of influencer-based platforms like TikTok | The risk of over-promoting products and services raises trust issues |
| Increased demand for video content | Monitoring FTC policies and influencer disclosures |
| Can maximize famous people for broader reach and higher engagement | The possibility of negative publicity because of influencer mishaps |
| Requires less workforce that leads to operational savings | Requires maintaining a good relationship with influencers |
| Top Services | Influencer outreach and management, creative content generation (live streams, stories, etc.), and influencer campaign monitoring and optimization |
|---|---|
| Average Cost | * $2 to $1,250 per post for nano and micro-influencers * $12,500 per post for mid-tier influencers * $25,000 to $1 million per post for macro and mega-influencers (Shopify) |
| Income Potential | Influencer marketing agencies earn $5.78 per $1 spend (Digital Marketing Institute). This can go as high as a $20 return. As per FinModelsLab, medium-sized agencies make $8,300 to $20,800 monthly. |
7. Creative Marketing Agency
A creative marketing agency specializes in branding and creative design services. These include logo and content creation, website development, and graphic editing. Creative marketing agencies develop marketing campaigns that resonate with a brand’s identity. They are valuable, specifically for startups and growing companies. Their services are in demand because creative brand presentation boosts sales by 33%, as per FunnelAmplified. Some popular creative marketing agencies are Wieden+Kennedy and BBDO.
| Advantages | Challenges |
|---|---|
| Flexibility to adapt to the changing creative needs of different businesses | Increased pressure to fulfill clients' creative brand demands |
| Offers trendy and engaging ideas for creative marketing campaigns | Requires content and branding that stands out from common ones in the market |
| Ensures brand consistency across different marketing channels | High resource consumption leads to more expensive pricing |
| Knowledge of the most appropriate visual aspects of your brand, products, and services | Finding skilled creative staff is challenging |
| Top Services | Branding, visual design services (logo, product package design, etc.), and website development |
|---|---|
| Average Cost | $26 to $72 per hour, depending on the task (ZipRecruiter) |
| Income Potential | FinModelsLab states that small creative marketing agencies make $4,100 to $8,300 per month. This can grow to over $80,000 monthly. |
This Redditor says that the creative marketing industry has tons of competition. But, it offers diverse opportunities because of startups and new brands. They need expert creatives with profound experience. He suggests niching down and starting locally to secure more clients faster.
8. SEO Agency
Search Engine Optimization (SEO) agencies help businesses improve their website visibility. They do this by creating keyword-rich content to rank on search engines like Google and Yahoo. SEO agencies also use other strategies, such as technical SEO and backlinking. They optimize website elements. Some common ones are headings, title tags, meta descriptions, and URL structure. This improves a client site’s user experience and authority. The demand for SEO agencies has increased, with 44% of businesses using SEO (Clutch). Many agencies are also using local SEO strategies due to their improved targeting capabilities.
| Advantages | Challenges |
|---|---|
| Requires a lower budget in the long run because of free marketing methods | Constantly changing search engine algorithms and trends |
| Expertise in search engine optimization and marketing strategies | Takes time to see significant marketing campaign results and ROI |
| Better business visibility online (Ex: ranking on search engines) | Intense keyword competition |
| Utilizes performance data and insights to develop more successful campaigns | Requires continuous learning of the latest SEO tools and technologies |
| Top Services | On-page and off-page SEO, technical SEO, and [backlink](https://ippei.com/backlinks/) building |
|---|---|
| Average Cost | * $75 to $300 per hour * $500 to $5,000 monthly |
| Income Potential | StarterStory's data reveals that SEO agencies earn $113,300 per month on average. |
How Local Lead Generation Strategies Help Marketing Agencies
Local lead generation strategies help marketing agencies and businesses through:
- Niche and location-specific customer and client targeting
- Local SEO techniques that enhance brand awareness initiatives
- High-value lead qualification process for better conversions
- Search engine utilization for long-term marketing campaign sustainability
- Content optimization for better local authority
The primary challenge for marketers and business owners is acquiring leads that convert. Traditional marketing strategies lack technological and technical impact. This leads to wasted marketing efforts, budgets, and resources. I experienced this drawback when I started my online business in 2014. But, I discovered the power of local SEO and maximized its targeting potential. I build niche websites to generate leads for local businesses. This strategy has helped me generate over $50,000 in passive income monthly for 10 years now.
Marketing is pivotal in 2025 and beyond because it drives brand awareness and sales. That’s why you need reliable guidance to improve your digital campaigns and initiatives. I created my local lead gen course to help marketers and business owners build a predictable client pipeline. My course teaches the skills you need to launch successful lead generation campaigns.
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Ippei Kanehara
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$52K per month providing lead generation services to small businesses
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