Starting a digital marketing agency with no prior experience might seem like trying to catch lightning in a bottle, but in 2024, it’s not as daunting as it sounds.

As the digital advertising world continues to expand, there’s a golden opportunity for newcomers to make their mark. A report by Statista predicts the global digital advertising market to reach $1.2 trillion by 2027, so it is safe to say that the digital marketing business will grow in the coming years.

Table of Contents

1. Key Reasons Why You Should Start a Digital Marketing Agency
2. Why Do Businesses Need a Digital Marketing Agency?
3. Pros and Cons of Starting a Digital Marketing Agency in 2024
4. How Much Does It Cost to Start a Digital Marketing Agency?
5. What Makes a Digital Marketing Agency Profitable?
6. 9 Key Steps to Start Your Digital Marketing Agency
7. How Do You Get Your First Digital Marketing Client?

Key Reasons Why You Should Start a Digital Marketing Agency

Growing Demand for Digital Marketing Services

Businesses of all sizes, from small startups to large corporations, are investing more in their online presence. Why? Because that’s where their customers are. Whether it’s social media, search engines, or email marketing, digital platforms are where businesses connect with their audiences.

• Businesses realize they can’t afford to miss out on the vast online market.
• You’ll be stepping into a growing industry with plenty of opportunities to capture clients who need your expertise.
• The global digital ad spend is projected to reach a staggering $870.85 billion by 2027, there’s a chance to ride the wave of this industry’s growth.

Low Startup Costs and High ROI Potential

One of the most appealing aspects of starting a digital marketing agency is the relatively low cost of entry. Unlike other businesses that require significant upfront investments in inventory, real estate, or equipment, a digital marketing agency can be launched with just a computer and internet connection. This makes it an accessible business idea, even for those with limited capital.

What’s more, the return on investment (ROI) can be impressive. With the right strategies, even a small agency can see substantial profits. With selling expertise and results, you can command high fees. This means that with minimal overhead, your earnings potential is significant. Remember: as your client base grows, so does your revenue, making it possible to scale your business and increase profitability.

Flexibility and Remote Work Opportunities

One of the biggest perks of running a digital marketing agency is the flexibility it offers:

• You can work from anywhere – your home office, a coffee shop or a beach in the Mediterranean are just a few of your options. 
• You’re not limited to local clients – you can attract and work with clients from all over the world.

Diverse Service Offerings and Niches

Let’s not forget the diversity of services you can offer with your agency.

• There is a wide range of services that businesses need: SEO, Content Marketing, Social Media Management, or PPC advertising just to name a few.

You can also specialize in a niche or focus on a specific industry, like healthcare or eCommerce, or offering specialized services like influencer marketing or email automation. Niching down can make your agency stand out. It can also make you an expert in that particular area, attracting clients who are specifically looking for your type of expertise.

The Ability to Scale

Starting a digital marketing business is both about achieving short term and long term success. As you bring in more clients and revenue, you can expand your team and services, and perhaps enter new markets. Many successful digital marketing agencies started small and gradually scaled their operations.

Why Do Businesses Need a Digital Marketing Agency?

Expertise in Navigating Complex Digital Landscapes

Digital marketing isn’t as simple as posting on social media or sending out a few emails. It’s a complex field with multiple channels – each with its own rules, algorithms, and best practices. This is where digital marketing agencies come in: they bring knowledge and experience to the table to help businesses navigate these complexities.

Cost-Effective Marketing Solutions

Hiring a digital marketing agency can be a cost-effective solution for many businesses. Building an in-house team requires significant investment—not just in salaries but also in training, tools, and ongoing education to keep up with the latest trends. On the other hand, outsourcing to an agency provides access to a whole team of experts without the overhead costs.

• Agencies ensure that every dollar spent is optimized for maximum impact.
• They can deliver results that are often more cost-efficient than trying to manage everything internally.

How do Digital Marketing Agencies Help Businesses?

Boosting Online Presence

Agencies know how to get your business noticed. They use SEO, social media, and content marketing to make sure your brand pops up where it matters—right in front of potential customers. With their help, your business doesn’t just exist online; it thrives.

Turning Visitors into Customers

Getting people to your website is just the start. Agencies work their magic with targeted ads, landing pages, and email campaigns that don’t just attract visitors—they convert them into paying customers. More leads, more sales—it’s that simple.

Building a Brand People Love

Agencies shine when creating a strong, consistent brand identity that sticks with people. They help build a customer base that not only recognizes your brand but also keeps coming back.

Managing Business Reputation

A business’s reputation is everything and someone has to monitor online reviews and social media. Agencies step in when things go south to turn potential crises into opportunities. A solid reputation builds trust, and trust drives success.

Pros and Cons of Starting a Digital Marketing Agency in 2024

Obviously, starting a digital marketing agency in 2024 comes with its share of advantages and challenges. To help you weigh the decision, here’s a breakdown of the key pros and cons.

Pros of Starting a Digital Marketing Agency Business

• High Demand: The demand for digital marketing services is stronger than ever. Businesses across all industries know that to stay competitive, they need a solid online presence. Thus, they look for experts who can help them achieve just that either through SEO, social media, Web design or PPC. This growing need means there’s plenty of opportunity for new agencies to secure clients.
• Low Startup Costs: Low barrier to entry is one of the biggest advantages if you’re looking to establish an agency. You don’t need upfront investment. 
• Flexibility: You can work from anywhere, yes. But this flexibility extends to your schedule as well, allowing you to balance work with personal commitments. 
• Scalability: As you gain more clients and experience, you can expand your services, hire additional staff, and increase your revenue. 
• Diverse Niches: You can specialize in a particular area and become an expert.

Cons of Starting a Digital Marketing Agency Business with No Experience

• High Competition: While there’s high demand, there’s also high competition. Thus, to stand out, you need a strong value proposition, effective marketing, and often a niche focus to differentiate your agency from the others in the field.
• Constant Learning Curve: New tools, platforms, and algorithms are constantly emerging, which means you need to stay updated to remain competitive. This ongoing learning curve can be overwhelming, especially if you’re trying to juggle multiple roles within your agency.
• Client Retention: Attracting clients is one thing; keeping them is another. Client retention can be tough, particularly in an industry where results aren’t always immediate. Without a solid client retention strategy, you might find yourself constantly chasing new businesses, which can be exhausting and unsustainable.
• Cash Flow Management: Like any business, managing cash flow can be a challenge, especially in the early stages. Clients may pay late, projects might take longer than expected, and unexpected expenses can arise. It’s essential to have a good handle on your finances to avoid cash flow issues. This means careful budgeting, maintaining a financial cushion, and possibly seeking out additional funding if necessary.
• Pressure to Deliver Results: Clients hire digital marketing professionals because they want results. This places a lot of pressure on you to deliver measurable outcomes, whether it’s increased traffic, leads, or sales. The stakes are high, and failing to meet expectations can lead to unhappy clients and lost business. You must be able to manage this pressure.

How Much Does It Cost to Start a Digital Marketing Agency

Indeed, money certainly talks when starting your own digital marketing agency.

Let’s analyze how much to start a digital marketing agency by breaking it down into three key areas:

• Fundamental costs: Basic startup costs include the primary elements necessary to get your agency off the ground. You will need to register your business, develop a professional website, purchase essential equipment and software, and invest in marketing and branding materials, all of which require an initial cost. 
•  Ongoing operational costs: Operating a digital marketing agency is an ongoing venture that entails recurring expenses. Salaries and benefits, office space (no need for remote working agencies), utilities, digital marketing tools, marketing and advertising budgets, and insurance coverage are a few of them. These recurring efforts support your agency’s daily operations and client service.
• Client acquisition costs:  Sales and marketing expenses – attending networking events, advertising, and lead generation efforts – are critical components of client acquisition. Education and training for yourself and your team are also vital, keeping you updated with the digital landscape. Lastly, holding a reserve fund or working capital is a prudent strategy to handle unexpected expenses and sustain financial stability.

What Makes a Digital Marketing Agency Profitable?

Running a profitable digital marketing agency requires more than just getting clients.You need to set up the right strategies to maximize revenue while keeping costs under control.

Effective Pricing Strategies

Setting the right price for your services is crucial. Price too low, and you might struggle to cover your costs; price too high, and you risk losing potential clients. The key is to find a balance that reflects the value you provide while being competitive in the market. There are different digital marketing agency pricing models you can consider for your agency. 

Diversification of Service Offerings

A smart way to attract a diverse client base is to offer a range of services. As you can guess, some clients might need full-service digital marketing, while others might just be looking for specific services like SEO or email marketing. Diversification also opens up cross- selling and upselling opportunities for digital marketing agencies.

Client Retention and Long-Term Contracts

While getting new clients is important, retaining them is where the real profitability lies. Long-term clients provide steady income and reduce the need to constantly chase new business. If you want to achieve long-term success for your agency, this stability is what you need. 

High-Value Client Acquisition

Not all clients are created equal. Some clients will provide a higher return on investment (ROI) than others, so it’s important to focus on acquiring those that can bring the most value to your agency.

9 Key Steps You Should Take to Start Your Digital Marketing Agency

Conduct Market Research

Before you start, it’s important to understand the field you want to establish a firm in. Begin by identifying your target market—who are your ideal clients? Think about the industries they’re in, the size of their businesses, and the specific challenges they face.

Next, take a close look at your competitors. What services do they offer, and how do they price them? Understanding what’s already out there will help you spot opportunities. Is there a particular service that’s in high demand but not well-covered?

Identifying these gaps in the market can reveal where your agency has the best chance to succeed.

Determine The Need For Your Service

As you set out to start your own digital agency business, your first and foremost priority must be ensuring the demand for your services.

In other words, failing to pinpoint a demand for your services can lead you to compete with a limited number of potential clients & target audience, restricting your agency’s growth potential.

At that point, conducting market research like we’ve mentioned above, including compliance and regulatory services like AML verification becomes even more of an important step. Other tips to determine whether there is a need for your service? Here they are:

• Conduct online surveys and polls to gather feedback from potential clients & target audiences. These insights can guide you in framing custom services that cater to specific needs and preferences. 
• Explore & follow industry publications penned by authorities in the field of digital marketing.
• Attend industry events and conferences (online or in-person) to network with other digital marketing professionals.

Specialize in a Particular Niche 

According to B2B Marketing Zone, agencies specialized in a particular niche have a 68% higher win rate for their proposals compared to those with a general focus. That result is not surprising when considering specialization allows marketers to tailor marketing efforts, content, and services to a specific audience, making it easier to resonate with the audience.

Let’s dive into another fact: Many new-age digital marketing agencies will provide similar services in 2024. By carving out a niche, you reduce direct competition, making it more likely that your agency will be the go-to choice for businesses seeking expertise in that area & industry.

Additionally, specialization undoubtedly supports building a bold brand identity and allows your digital agency to become synonymous with expertise in your chosen niche, which can further attract clients seeking those specialized services.

Decide Your Agency Type

Choosing a niche also refers to what kind of agency you will be building up. According to your niche, you can focus exclusively on content marketing, SEO optimization, and creating and distributing high-quality content. Or, if you have the potential and source for social media marketing, you can choose to help your clients build and engage their audiences on social media through organic and paid ads. 

On the other hand, deciding on your agency type ripples throughout your business, shaping your specialization, client base, service offerings, and the entire strategy. The options are diverse, ranging from content marketing agencies, SEO agencies, and social media marketing agencies to more comprehensive full-service digital agencies. It is best to remember your choice should adjust to your expertise, market demand, available resources, and long-term growth opportunities.

Register Your Agency as an Official Business

Let’s jump into a more “serious” phase: Registering your agency as an official business! 

Actually, it is a  foundational step that provides legal and financial structure to your endeavor. It instills trust with clients, offers liability protection, and ensures compliance with legal and regulatory requirements. 

Allow us to be more specific: What are the benefits and responsibilities of being a registered digital agency?

•  Business name: Pick a unique business name for your digital agency that corresponds with the registration regulations in your jurisdiction. At this point, do not hesitate to check for domain name availability. 
• Legal structure: Determine the legal structure that best suits your digital agency type – sole proprietorship, partnership, limited liability company (LLC), corporation, or another form. Each legal structure holds different taxation, liability protections, and administrative requirements.
• Taxation: Registering your agency can have tax advantages, allowing you to take advantage of markdowns and tax breaks open to businesses. To track the tax implications specific to your business structure, consider consulting with a tax expert. 
• Business banking: As a part of taxation and overall financial operations, open a separate business bank account to manage your agency. This simplifies accounting and financial tracking.
• Permits and regulations: Ensure your business is in compliance with local, state, and federal regulations, including any industry-specific requirements like permits, licenses, and adherence to advertising or marketing regulations.

Create Your Official Website and Build Social Media Accounts

An undeniable fact: Setting up an official website plus creating a robust social media strategy is the bread and butter of launching a digital marketing agency. 

In the simplest terms, a website for a startup serves as a digital storefront; the place where potential clients, partners, and customers will stop by first – the brand’s first impression. 

Here are a few great examples of by successful digital agencies’ websites like War Room Inc., and VRRB:

Although both have very different styles, each agency’s website homepage is a creative masterpiece that truly reflects the agency.

And let’s not underestimate the power of social media; building a bold social media presence entitles you to engage with your audience & potential clients, showcase your expertise, and create a community around your brand (you already know all of that.) In other words, having a social media presence like Hootsuite, Buffer, We Are Social and Hubspot means expressing your unique brand personality. 

Pick Your Digital Marketing Tools 

Picking the right tools and putting together a top-notch team is like nailing the one-two punch for any digital agency. 

In the initial stages, it is critical to pinpoint the precise digital marketing skills your agency will have. When you have a total grasp of your service portfolio, you can undertake the process of researching & acquiring the most suitable tools for each task. Since the digital landscape offers a great number of tools for various needs, it is paramount to cherry-pick the ones that align with your requirements and financial limitations. However, we can list some of the best tool choices for your future agency:

• Communication: Slack, Trello, Notion.so, Infinity, Skype, Zoom

• Content & SEO: Grammarly, Semrush, Zutrix, WordPress, Canva
• Social media: Buffer, SocialPilot, Planly, Intellifluence, Instajet, Semrush

• Automation: Channable, Adzooma, GetResponse, Justuno, BigMailer.io, Bugherd, Ziflow, Copper, Advisr, ConnectorEngine
• Workflow & operation management: Productive, Screendragon, Height, Runn.io, Synergist, Teamwork

Build Your Agency Team

It’s time to talk about your future crew! Even though finding the perfect team in the first place is like searching for a needle in a haystack, time and patience will give you what you need. 

The size and composition of your crew depend on the scope of your agency. However, there are main roles (such as CMO, digital marketer, content writer, social media manager, and SEO specialist) to be filled to ensure your agency’s success. 

At that point, we recommend you remember building a team is not a matter of checking off roles from a list. It’s actually bringing together individuals who genuinely thrive on digital marketing. These team players are expected to bring the necessary skills, ambition & experience to the table and excel in communication and collaboration.

Your team is the foundation of your agency, so you need to assemble it carefully. Once your team is in place, we recommend you create a Meet the Team page on your website. This page will humanize your brand and let potential clients connect with the people behind the work. It is also the best way to highlight your team’s talent and diversity. These features build trust and credibility with clients even before they reach out to your agency.

Seed Agency’s team page is a great example to inspire your own. What stands out is how Seed shows they truly value their team with a heartwarming statement: ‘People are everything.’

Continuously Optimize and Scale Your Operations

Starting your own digital marketing agency is a big achievement, but it’s just the beginning of the journey. Think of it like planting a seed—it needs care, attention, and the right conditions to grow. Your agency works the same way. Regularly reviewing how things are running helps you spot what’s working and what’s not. This is your chance to tweak and improve, whether it’s how you manage projects, the tools you use, or the services you offer.

Why is this continuous optimization so important?

Simple: digital marketing is a dynamic field and changes almost every day; what worked yesterday might not work tomorrow.

As your agency grows, scaling becomes the next natural step. Maybe that means adding new services, bringing on more team members, or reaching out to a broader client base. Scaling isn’t about getting bigger for the sake of it—it’s about growing in a way that’s sustainable and aligned with your goals.

How Do You Get Your First Digital Marketing Client?

We need to accept that getting your first client just after starting your digital agency is often the most challenging step in the process. As you gain experience and build a portfolio of successful cases, your agency’s reputation will grow, making it easier to attract new clients. But until then, persistence is key. 

While doing so, you can follow these steps and ‘tick’ them off as you go:

• Take advantage of online ads: Create targeted Google Ads & social media campaigns for keywords like “digital marketing services” or “online marketing agency.” Ensure your ads include a compelling call-to-action and a link to a dedicated landing page on your website.
• Optimize your existing network: If you have experience in the realm of digital marketing, reach out to your former colleagues or acquaintances who own businesses. Offer to check their current digital marketing strategy or deliver a free consultation. The relationship you already have can lead to trust and potentially a client.
• Try cold outreach: In case your team is experienced in websites, identify local businesses with outdated websites & poor online presence. Send personalized emails offering a free website audit or suggesting improvements. Explain how your expertise can boost their business. 
• Offer introductory discounts: In your initial client meetings, provide a particular introductory rate for the first three months of service. This can incentivize businesses to take a chance on your agency.
• Leverage local SEO: It’s quite important! Optimize your official website for local SEO to attract nearby businesses even though you’re working remotely. This can be particularly effective if you’re targeting a local client base.
• Be active on online marketplaces: Register your agency on freelance and job marketplaces like Upwork, Freelancer, or Fiverr. These platforms can be a source of initial clients.

Conclusion

Starting a digital marketing agency in 2024 might seem challenging, especially if you’re new to the field. But with the right digital marketing business plan, a dedicated team, and a focus on delivering value to clients, success is within reach.

Remember, every expert started as a beginner. Now that you’ve got the knowledge and tools, it’s time to take the first step and build your agency.