How to start an advertising agency


Every business needs to get their name out there and spread the word to new customers if they want to continue to grow. Many businesses, including small businesses, rely on the expertise of advertising agencies to help them create and execute effective marketing strategies.

In the era of digital marketing, advertising agencies conduct their business and provide services primarily online, making them both inexpensive and COVID-friendly.

If you’re a budding entrepreneur with a background in marketing and communications, here’s what you need to know about starting an advertising agency.

Benefits of starting an advertising agency

There are nearly 14,000 established advertising agencies in the United States, and they are expected to generate more than $45 billion in revenue by the end of 2020, according to a report by Statista. It’s not hard to see why this startup path is so appealing: it’s relatively easy to launch and has the potential to be very profitable.

Here are some benefits of starting an advertising agency:

  • Low overhead and start-up costs. Many agencies operate remotely, so they don’t need to invest in physical office space. In most cases, your only start-up costs will be technology equipment (hardware and software), Internet service, and any applicable business registration. You don’t need a big team to get started either; you can manage the business and execute many of the early deliverables yourself to save money on wages and salaries.
  • Large potential clientele. Thanks to digital tools, advertising agencies can serve clients all over the world, if they wish. Although the marketing industry is crowded, there are plenty of opportunities to carve out a niche by targeting specific types of businesses, such as restaurants, salons, medical offices, or law firms.
  • Low barrier to entry. You don’t need years of marketing experience to start a digital ad agency because the industry is constantly changing. With a basic knowledge of content marketing and social media, along with a willingness to learn new emerging platforms, you can make a name for yourself as a professional advertiser.
  • Scalability. With a strong team of affordable freelancers and contractors, your agency can scale quickly and deliver full-service marketing campaigns with copywriting, social media, email marketing, graphic design, SEO, and more.

How to start an advertising agency

Once you’ve decided to start your own ad agency, follow these steps:

1. Create a business plan for your advertising agency.

Before you can get started, you’ll need to create a detailed business plan to guide your growth and internal strategy.

The three main purposes of a business plan are to establish your business objective, secure funding (if you plan to seek capital from investors as your agency grows), and attract leaders to help you run your business. Therefore, you will want to include the following in your plan:

  • Summary: What does your advertising agency do?
  • Company Description: What defines your business?
  • Presentation of the product/service: What services do you offer your customers?
  • Market analysis: What types of clients does your agency target?
  • Financial plan: What are your planned expenses and how will you earn money to support operations?

2. Choose your pricing model.

Most ad agencies make money by brainstorming and developing creative assets for their clients, including traditional ad campaigns and content marketing elements, like blogs and social media posts. There are several pricing models you can use to bill your clients, and which one is right for you depends on the type of work you do and how you work with your clients. You’ll need to decide whether you’re going to bill by the hour, by project, or on a fixed retainer model, in which a client pays a pre-agreed amount for a certain number of hours of service. A flexible or hybrid approach with different payment structures can help you meet customer needs while keeping them on budget.

3. Stay on top of the advertising game.

By subscribing to trade publications, blogs and podcasts aimed at advertising agencies, you can keep up with industry events, trends, vendors and technology. Here are some reputable advertising industry sources:

4. Join professional associations in the advertising industry.

Joining a professional association allows you to further your education, keep up to date with trends and technology, meet your peers at trade shows and conventions, and participate in awards competitions to add to your credentials.

Although there are many niche organizations for specific types of advertisers, you might consider joining one of the following organizations for advertising and marketing professionals:

5. Find clients for your ad agency.

Every advertising agency needs clients. Before you start publicizing your marketing services, decide what types of businesses you want to work with (industries, company size, location, services needed, etc.). Once you’ve defined your ideal customer, start researching businesses that fit your description and study their current advertising efforts.

By targeting businesses with a small or lackluster marketing presence, you can offer yourself as a solution for busy entrepreneurs and business owners who need help taking their advertising to the next level. Be sure to highlight the benefits of advertising and demonstrate how good marketing can help your prospects win new business and increase their revenue.

Once you have a few repeat customers, you can politely and professionally ask for a testimonial or referral so you can continue to grow your customer base through word of mouth referrals.

Point: Narrow down your target customer base and research businesses that fit that description. Focus your outreach efforts on potential customers where your services can greatly improve their marketing presence.

6. Build your contacts.

If you plan to help your clients with TV ad placements, radio shows, podcasts, blogs, and news publications, you’ll need to start building a stable of media contacts. From these outlets, collect media kits that list ad rates, demographics, and specs so you know what types of campaigns might be appropriate for your clients. Prepare to introduce yourself to sales reps in the media you plan to use regularly. Create a portfolio of past work, if you’ve been in the industry, to highlight ad campaigns you’ve worked on in the past and help your ad sales meetings run smoothly.

7. Create an amazing website to sell your services.

Like all modern businesses, your advertising agency needs a robust and informative website that engages potential clients and clearly explains how you can help them with their marketing campaigns. You can go the DIY route and choose one of the many website builder tools available or hire a professional web designer to create a more personalized web presence.

Either way, you’ll want your small business website to have a proper domain name, pages that define who you are and what you offer, a contact form, a payment portal (if you plan to accept payment from customers through your website), and original, high-quality images to visually communicate your brand.

8. Develop your own marketing plan to promote your business.

Advertising agencies have a unique advantage over other types of service businesses: their own marketing and advertising efforts serve as a sample of work and allow potential clients to see in advance what the agency might be. able to do for them.

That’s why you should go all out for your own digital presence and show off your strengths to prospects. For example, if you offer graphic design services for your clients’ advertising campaigns, make sure that all of your website and social media graphics are spotless. If you offer writing services, maintain a well-written, SEO-optimized blog on your website so they can see your expertise and writing style.

In other words, let your marketing strategy speak for itself so your agency can continue to grow and attract new clients.

Jenni Simcoe contributed reporting and writing for this article.


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