The 2019 survey study by IBISWorld claims that the digital advertising agencies industry has grown by 16.8% since 2014. The industry boasts 21,034 companies and is expected to reach the revenue of $17bn by the end of this year.
In today’s overcrowded digital marketing landscape, competition is fierce. So, if you’re planning to build a recognizable digital agency from the ground up, you’ll need more than creativity, motivation, and knowledge. You need to have a solid plan that will support your startup’s growth over time.
Improve your Digital Marketing Skills
Many articles you’ll find online will tell you that having a good business idea and securing funds is enough to launch a startup.
I wouldn’t agree with that statement.
Just because you’ve taken a marketing diploma or you’ve landed an internship at a digital marketing agency doesn’t mean you’re competent enough to run your own digital agency.
You don’t have enough experience.
Before you even start thinking about starting your own digital agency, you should get a real job in the industry.
This way, you will gain a better understanding of the digital marketing industry in overall and understand how its different aspects intertwine.
This is also an opportunity to gain invaluable project management skills and learn how to run a campaign from beginning to end. What people to include? How to determine their roles and responsibilities? How to measure employee performance? What tools to choose to simplify your creative processes or measure your campaign performance?
Answering these questions is the only way to keep your clients happy and deliver the desired results.
Choose your Niche
One of the most common mistakes digital agencies make is casting their net as wide as possible instead of choosing a narrower niche. Some of the major disadvantages of such an approach are:
- Not getting the most out of the onboarding process. When a potential client reaches out to you, you need to consider a wide range of factors before deciding whether to work with them or not. When your niche is clearly defined, this process gets easier. First, you will turn down all businesses outside of your target market. Second, you will be able to separate quality clients from those you don’t want to do business with.
- Failing to improve your skills, as you won’t know what skills to focus on. By working with clients within the same niche, you will know what tactics work for them and be able to boost a specific skillset.
- Failing to gain a competitive edge. When building a digital agency, your goal is to grow your brand reputation within a particular niche. This way, you will be perceived as a credible resource, gain positive client reviews, and acquire new clients.
Develop the Right Business Model
By choosing the right business model, you will know what services you will provide, how you will manage your clients over time and, above all, how you will bill for your services.
Now, here are the most frequent ways to bill for your services:
- Hourly rates – You’re charging for your services hourly.
- The flat fee – Based on a client’s goals, you determine how much time, effort, and resources you will invest in their campaigns and determine a flat monthly fee.
- The percentage of spend – Your billing efforts change, based on a client’s needs and scalability. In other words, as you gain new connections and larger clients, you will start turning down those prospects with little marketing resources.
- Commission-based businesses– You get paid once you complete the job.
Determine how your Agency will Grow
when starting a business, we all dream big. You’re now probably thinking about renting out large offices and equipping them with fancy equipment.
Remember that, no matter how great it all plays out in your head, in reality, surviving the first months of operation is extremely difficult. There will be lots of bills you will need to pay for and your profits will still be low. That’s why you need to scale down your ideas.
Instead of hiring 50+ workers right away, recruit a few skilled people at the positions critical to your agency. Sure, as your company grows and your client base expands, your team will grow, too.
First, estimate the costs of launching and running a digital agency. How many people will you hire? How will you attract top talent and acquire clients? What tools and equipment will you need?
Based on these estimations, secure funds on time. What financing methods will you use? Will you rely solely on bootstrapping and your friends and family’s help? If you believe your agency is different than the rest, why not consider crowdfunding? Maybe you want to take out a bank loan or apply for a government grant for startups and small businesses – the options are multiple and you just need to choose the right one.
You need to prepare for unexpected situations, too. What if you’ve just entered a slow season or you’re struggling with lots of unpaid invoices? What if an essential piece of equipment breaks or your staff needs an additional tool to get their jobs done? For example, in such situations, taking out personal loans is probably the fastest way to get your money injection.
Promote your Digital Agency
Would you ever hire a tattoo artist without tattoos? I don’t know about you, but I wouldn’t. The same goes for hiring digital agencies without a strong online presence. For your digital agency, your website, content, ads, and social media strategy are the strongest letter of recommendation. Without them, your prospects would have no reason to hire you.
Here is how to stand out in the crowd:
- Create high-quality content and promote it strategically to increase your industry authority.
- Establish a solid social media strategy in order to humanize your brand and build a vibrant online community.
- Listen to your target audience and provide relevant and actionable answers to their questions.
- Share case studies and client testimonials to build trust with your audiences.
- Register on all relevant business review sites to generate customer reviews.
- Speak at all industry-specific events that will position you as a credible resource.
Over to You
Before even starting off, you should know that launching a thriving digital agency won’t be easy. You’ll need to pour your heart into it. Still, with a detailed plan and the right skills, you will be able to weather the storm and finally reap the benefits of running your own business.
So, choose the right business model, pick your narrow niche, and have a business growth strategy. Don’t forget to market your agency and start building a solid brand around its name from the very beginning.