How Much To Start A Digital Marketing Agency

A few months ago, I started a digital marketing agency. It’s been super fun, but also very challenging. I get asked all the time how much money it cost to start my business and how much money I make as a result of starting the business. Today, I want to share with you some of that information!

How To Start A Digital Marketing Agency in 2023 (Step by Step)
Takeaways from “How Much to Start a Digital Marketing Agency”
1. Starting a digital marketing agency requires careful financial planning.
2. Consider the essential startup costs, such as office space, equipment, and software.
3. Budget for marketing expenses to promote your agency’s services.
4. Invest in building a strong online presence to attract potential clients.
5. Prioritize continuous learning and staying updated with digital marketing trends.

How Much To Start A Digital Marketing Agency

The cost of starting a digital marketing agency depends on many factors. One of the most important factors is location. For example, if you live in Los Angeles, rent can be pretty high. 

So, when choosing your location for your new business, make sure that it’s near where you want to live and not just because it’s cheap or convenient for clients who might not be willing to travel far from their home base.

Other things that will affect your startup costs include:

  • Software licenses (for instance, Adobe Creative Cloud)
  • Marketing expenses like Facebook ads or Google AdWords campaigns

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1. Location

Location is a very important factor in the digital marketing world. While it may not seem like it, location plays an important role in how your business will succeed.

You should first consider where your target market is located and if that area can support you as an entrepreneur. If you are targeting people who are online and use mobile devices, then it will be best to set up shop in a place with an internet connection that has good cell service. 

The last thing you want is for clients to have trouble contacting you! You also want to take into account what competition exists within your industry in each city or town by looking at what other agencies are doing there. 

This will help determine whether or not there’s room for another agency of similar size in the same vicinity as well as give insight on what kind of services they offer so that yours can be differentiated enough to stand out from them (or not compete directly). 

After all this research has been done, consider whether or not expenses would still remain low enough even after rent/fees/utilities, etc…

2. Market Research

Now that you have a business plan, you can start to market your company. But before you spend money on marketing, it’s important to do some market research. This will help you understand your target market and what they want from a digital marketing agency.

You should also research the kind of services your clients need so that you can position yourself as an expert in those areas. Researching competitors will give you an idea of what price points are popular and how much other agencies charge for similar services.

The more information about the industry that is available to you, the better prepared and confident your business will be when it launches its products into the marketplace.

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3. Target Market

As a digital marketing agency, you will be targeting a specific audience through your various marketing strategies. Understanding the characteristics of this target market and how they behave will help you define your business goals better.

  • Who is your target market? What are their demographics, psychographics, attitudes, and behaviors?
  • How can you find this group of people?
  • What do they like and dislike about current services/products in the market?
  • How can you identify the right group of people to place your focus on?
  • How many potential clients are there within each segment (or subsegments) that fit into these characteristics?

The next step is to prioritize segments by order of importance for your overall business plan. 

For example: if one segment makes up 80% of all potential customers but only has 10% share compared with another segment which makes up 20% but has 90% share then we would choose this latter segment as our priority because it will generate more revenue for us overall based on sales volume alone.

4. Digital Marketing Services Offered

Digital marketing services are divided into two categories: inbound and outbound marketing. Inbound refers to strategies that attract people to your website, while outbound methods bring prospects to you.

There are many types of digital marketing services available, including website design and development; content marketing; social media marketing; pay-per-click (PPC); email marketing; digital strategy planning; 

Data analytics reporting; training programs for employees or clients on how to use new platforms like Facebook Live or Twitter video effectively in their businesses’ communications strategies; consulting on how your agency should go about building a customized program for each client based on their current goals and resources available within the company structure.

Outsourcing some tasks (such as maintaining social media accounts) that can be done more efficiently by an external source instead of doing them internally yourself at a higher cost than hiring someone else who specializes only in these kinds of activities rather than being able to offer other types within their portfolio too (ease of access), etcetera!

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5. Business Model Design

As you prepare to launch your agency, you must develop a business model. A business model is like a map that helps guide your success as an agency and ensures that you are headed toward the right destination.

When designing your business model, here are some key things to consider:

  • How much should we charge our clients?
  • How should we structure our agency?
  • What type of client acquisition strategy do we want to use?
  • What kind of retention strategy will we use with existing clients?

What kind of growth strategy do we want for existing clients or those who refer new ones through word-of-mouth marketing efforts (like networking) vs paid advertising/social media campaigns?

Are there other strategies for growing our business through referrals from current customers such as sending out invoices every three months instead of monthly ones so people remember us more often during their billing cycles (and thus feel more inclined to refer us), etc.?

6. Website Design & Development For Your Digital Agency

It’s really important to have a sleek, clean and professional design for your digital agency website. Your website is a reflection of you and your business so it must look good. If you don’t have the skills or knowledge to create your website then it would be best to outsource this work to someone who does have those skills.

You also need to make sure that your digital marketing agency site is mobile-friendly as most potential clients will access it on their smartphones or tablets so they can search for information on their way home from work or when they are out with friends on the weekend. 

A responsive design will allow them to see exactly what they want while they are out and about which means that they won’t need to try going through all the hassle involved in downloading an app just so they can access what they’re after!

Your website should also be easy for potential clients/customers/clients or whatever label we give them these days (I’m not quite sure) but basically, anyone reading this article right now should know who I’m talking about). 

They shouldn’t struggle too much when navigating through different pages because if there’s one thing people hate more than anything else on earth (other than spiders), it’s having trouble finding something online! 

For example: if someone needs help finding something specific then having an easy-to-navigate structure will ensure that person finds what he wants quickly without wasting any time searching around aimlessly like some sort of clueless idiot…which brings me back around full circle back into my main point: keeping things simple makes things easier for everyone involved!

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7. Hiring The Right Team Members To Start Your Agency With

Hiring the right team members to start your agency is crucial. You want to hire people who are passionate about the industry, because only then will they be able to keep their eyes on the prize and not get distracted by other things that may come up.

If you have someone who works for you and they’re not good at what they do, it’s going to reflect on you as an employer. It doesn’t matter if they love what they do or not—if they can’t do it well enough, then it needs to be fixed before hiring again.

8. Selecting The Right Project Management System For Your Agency

The PMS you select should be able to track time and costs, as well as provide a means for communicating with your team. It should also allow for communication with clients, vendors, and investors.

You’ll want a system that allows for efficient project tracking throughout the entire lifecycle of projects (ideally from start to finish). This involves assigning tasks and deadlines as well as keeping track of who’s doing what when it comes to managing client relations or running ads.

9. Agreements & Contracts For Your Clients And Vendors

When you start a business, the first thing you think about is the product or service that you will be providing to your clients. 

However, another important aspect of any business is the contracts and agreements that govern your relationship with other parties involved in the operation of your business. 

Contracts are essential for many reasons but most importantly because they help ensure everyone knows what each party’s responsibilities are and what happens if there is an issue or dispute between them.

Contracts protect both parties from financial losses due to nonperformance by either party in addition to ensuring that all parties understand their rights and obligations under the agreement at hand. 

While contracts can vary based on several factors (such as industry type), all businesses need to have standard contracts in place for certain areas so everyone knows what their responsibilities are when working together even if only one person signs on behalf of another entity such as an LLC or corporation (which are entities themselves).

10. Client Retention And Growth Strategies For Your Agency

Client retention is an important part of growing your digital marketing agency. You want to keep your clients, so you can continue to work with them on future campaigns, and because it’s good for business.

Client retention strategies include:

Providing great service to clients. This means delivering on the services you promise, communicating well with clients about their campaigns, and being responsive to any requests or issues they might have along the way.

Setting clear expectations for how long a project will take from start to finish (including how long it takes for invoices to be paid) so that there’s no confusion about deadlines or when new features will be added to a campaign (or not). 

It also helps if you have some kind of formal system in place where clients can leave feedback at any time during or after working with you this way other potential customers who are thinking about hiring an agency like yours can see what past customers thought of their experience working together!

Make sure everyone at your company is trained on customer service best practices including how often they should respond once they’ve been contacted by someone else within their organization (such as sales reps) versus responding directly themselves 

If possible based off what type of issue needs resolving right away versus those which can wait until later without causing delay problems overall.”

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11. Onboarding Systems For Your Agency’s New Clients

Onboarding systems are tools that help you to streamline the onboarding process for your clients. This means they can help you get a new client up and running with your agency quickly, while also guiding them through the onboarding process in a way that makes sense for their business.

There are many different types of onboarding systems out there, but what they all have in common is that they make it easy for you to learn about each new client’s needs, understand those needs, and keep track of them over time.

12. Automation Tools & Systems You Need To Scale Up Fast

Automation Tools & Systems You Need To Scale Up Fast

If you want to scale up fast, automation tools and systems are the way to go. There are many types of automation tools that can help you save time and money while still making the most out of your efforts. Some examples include:

Time-tracking software that records how much time you spend on tasks in a day and helps keep track of who’s doing what in real-time, as well as when they’re doing it

CRM (Customer Relationship Management) software for creating customer profiles with all their relevant details such as contact information, buying history, preferences, etc., so that each person can be treated individually based on their specific needs instead of being treated like any other random customer who walks through the door

Project management software like Trello or Asana for managing projects between different teams members or departments


As you can see, there’s a lot to think about when starting up a new digital marketing agency. There are many different aspects, from picking the right location for your business and hiring the right team members to get the best tools for automation and client retention. 

However, if you’re serious about starting up an agency in 2019, then this blog post should be enough information for you to get started on planning and implementing your ideas!

Further Reading

Step-by-Step Guide to Start a Digital Marketing Agency: A comprehensive guide that takes you through the process of starting your own digital marketing agency.

Digital Marketing Agency Startup Costs: Learn about the essential costs and financial considerations when launching a digital marketing agency.

Digital Marketing Startup Costs: Tips and Insights: Valuable tips and insights from successful entrepreneurs to help you plan your digital marketing agency’s startup costs.


What are the key steps to start a digital marketing agency?

Starting a digital marketing agency involves several key steps, such as market research, defining services, setting up a business entity, building a portfolio, and marketing your agency’s services.

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

The startup costs for a digital marketing agency can vary based on factors like office space, equipment, software, marketing efforts, and hiring team members. It is advisable to create a detailed budget to estimate the initial investment accurately.

What services should a digital marketing agency offer?

A digital marketing agency can offer a wide range of services, including social media marketing, SEO, content creation, email marketing, web design, PPC advertising, and analytics.

How can I attract clients to my digital marketing agency?

To attract clients, focus on building a strong online presence, showcasing your expertise through content marketing, offering value-added services, networking with potential clients, and leveraging referrals.

Is prior experience in digital marketing necessary to start an agency?

While prior experience in digital marketing can be beneficial, it is not an absolute requirement. With dedication, continuous learning, and partnering with experts, you can still establish a successful digital marketing agency.