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If you're looking to start a digital marketing agency, you’ve come to the right place.
There are over 5 million new businesses started every year, and the need for digital marketing grows with each one.
While the demand for these services is soaring, success in digital marketing still requires a thorough understanding of both internal and external operations.
That’s why our experts at Slam Media Lab (Slam) are breaking down the steps and strategies you’ll need to build, operate, and scale your agency.
Founded during the pandemic and based in San Francisco, Slam has scaled to a $2M agency focused on Webflow, SEO, branding, and content marketing.
This growth wasn’t magic; it was the product of consistent and effective strategies, which we’ll share in this guide.
While this article provides a comprehensive foundation for your agency, we’ve assembled an entire course dedicated to those looking to go the full nine yards.
In our How to Start an Agency course, you’ll find everything from how we got our first clients to ways to crush your sales process, arming you with the knowledge and resources needed to build a successful digital marketing agency.
Understanding the Types of Digital Marketing Agencies
Before you can offer your digital marketing services, it’s important to determine which types of digital marketing you’ll provide.
While it’s possible to start a full-service digital marketing agency, building knowledge and authority across all types of digital marketing services will require a significant amount of time and resources.
By selecting a specific service, you can diminish this learning curve, obtain better results, and establish credibility for your services.
These services might include:
- PPC Advertising
- Social Media Marketing
- Search Engine Optimization
- Content Marketing
- Influencer Marketing
- Email Marketing
To determine which service you’ll offer, consider your skill set and interests, as well as any relevant work experience. In our How to Start an Agency course, we break down the various service types to help you make this distinction.
Using this resource, take some time to identify a service that you find interesting and start learning everything you can about your specific field. To further expedite your growth, you should also focus on and pick a niche, which we’ll dive into later in the article.
Once you've determined your service, you can move onto the next step: the legal foundation.
Starting a Digital Marketing Agency Legally
Before you can onboard clients and send invoices, you’ll need to consider your agency's structure and legal structure. In the U.S., some of the most common business structures for new agencies include:
- Sole Proprietorship
- Limited Liability Company (LLC)
- S-Corporation
A sole proprietorship requires no legal registration, but also provides no legal distinction between the owner and business, often causing issues with record keeping and liability due to the lack of separation between personal and business liability.
To open a business bank account and keep accurate records, you’ll need to establish a formal business entity like an LLC or S-Corporation. For new digital marketing agencies, an LLC is often the go-to structure due to the low cost and separation of business and personal liability.
As you scale, you might consider transitioning to an S-Corporation, which could help you save on taxes by paying yourself as an employee.
Once your formation documents have been approved, you’ll need to apply for an employer identification number (EIN). This number is essentially your agency’s social security number, allowing you to open a business account at nearly any credit union.
Business bank accounts allow you to separate personal and business transactions, aiding in tax reporting and liability distinction. By setting up your account before providing services, you can establish a secure foundation of record keeping with your personal and business assets separated.
With your legal and financial foundation in place, you can then move on to building, operating, and scaling your digital marketing agency.
7 Steps to Start a Digital Marketing Agency
Once your agency is recognized legally, you can begin getting recognized by clients. In this section, we’ll break down how to do this in 7 steps:
- Identifying Your Target Client
- Determining Your Services & Pricing
- Establishing Your Operational Processes
- Acquiring Clients for Your Agency
- Establishing a Strong Online Presence
- Getting Recognized with SEO
- Expanding Your Network and Audience
Identifying Your Target Client
Just like when selecting a specific service, identifying a target client will make it much easier to build knowledge and authority in your niche.
Through targeting a specific type of business, you can develop an understanding of their unique challenges and goals, which would be nearly impossible when serving all industries.
By identifying these challenges and goals, you can craft marketing material and sales strategies that resonate with your target client.
For example, an HVAC company and an athleisure brand face completely different struggles on a day-to-day basis. By crafting each message to speak directly to your desired client, you can ensure your content resonates with their experiences.
Beyond the benefits of targeted copywriting, serving a specific client makes it much easier to get involved with groups in the industry.
Instead of joining groups like “US Business Owners,” which are crowded by competing marketing agencies, you can join specific groups, such as “Gym Owners in Arizona.” While targeted groups have far fewer members, it’s much easier to establish yourself as an expert and become the go-to agency for that group’s members.
Whether it’s through valuable posts or insightful messages, understanding and connecting with your target client allows you to expedite your growth and boost your niche authority.
In the How to Start an Agency masterclass, we’ll share everything you need to know to identify the optimal target persona for your digital marketing agency.
Determining Your Pricing Structure
With your service and target client in mind, the next step is to determine your pricing structure. In most cases, pricing structures fall under one or more of the following:
- Project: The price is calculated using a predetermined formula. To determine the price, estimate the total project costs, including labor, and add a margin to protect profits.
- Performance: The payment is determined by your results. This method can be unpredictable, but it is often effective for high-performing agencies.
- Time: The total price is based on an agreed-upon hourly amount. This structure ensures the project covers your labor cost, but it is often unfavorable for large-scale projects.
By using the same pricing structure for each client, you can simplify your quotation process, improve your financial analytics, and ensure a consistent profit margin.
However, there’s a lot more to consider than just the structure when pricing your services. Knowing this, we’ve dedicated an entire module of the How to Start an Agency course to breaking down how to find the perfect price for your services.
Acquiring Clients for Your Agency
With your target client and service pricing in place, you can begin onboarding your first clients. To do this, you can employ a wide variety of strategies, which you’ll also find in the How to Start an Agency course.
However, the foundation of client acquisition is quite simple. To get your first clients, you’ll need to do the following:
- Establishing a strong online presence
- Getting Recognized with SEO
- Developing a valuable content strategy
- Expanding your network and audience.
Establishing a Strong Online Presence
When clients are searching for a digital marketing agency, first impressions are everything. Because of this, it’s important to build a website and establish social profiles, providing relevant value to attract and engage your target client.
To build your website, some of the best website design tools include:
- Webflow (Our favorite at Slam!)
- Wordpress
- Wix
- Squarespace
It’s also helpful to establish a presence on other platforms to maximize your reach, whether it’s your Google Business profile, Clutch listing, or a local directory.
Getting Recognized with SEO
Once you’ve established your agency online, you’ll need to provide relevant value to rank, engage, and convert.
To do this, you’ll need to understand and employ SEO strategies while designing and managing your website. This includes everything from researching and implementing specific keywords to building authority within search engines.
In Slam’s How to Start and Grow an Agency course, we break down our exact processes to design an SEO content strategy for your marketing agency.
In our resources section, you’ll also find a wealth of additional tools and templates to help you with everything from organization to optimization.
Developing a Valuable Content Strategy
To develop this strong online presence, you’ll need to employ a comprehensive content strategy.
These strategies might include sharing informative blog articles, social media guides, and eventually, testimonials from clients who’ve found success with your services.
Through sharing this content, you’ll establish credibility at the first touch point, saving you the hassle of proving your worth during the sales process.
To define your agency’s content strategy, implement the following 5-step process:
- Establish your brand strategy and identity
- Determine which platforms you’ll focus on
- List your target audience’s questions and challenges
- Create content for each of these queries
- Schedule and share content consistently
By implementing these steps, you’ll develop a targeted audience and position yourself as the marketing expert in their industry. A comprehensive content writing strategy also helps you expand your reach.
When Google, or your social media platform, recognizes that you consistently provide valuable content that your target audience engages with, you’ll gain authority among both your audience and your marketing platform.
This means your content will be shown to more users, providing targeted and organic leads for your digital marketing agency.
Expanding Your Network and Audience
While inbound strategies will help you develop a consistent flow of targeted leads, proactively expanding your network will often be the quickest way to find your first clients.
By providing value to your target client and connecting with them on platforms like LinkedIn, you’ll be able to rapidly expand your network and audience.
Networking may also include attending local events, engaging in relevant groups, or connecting directly with business owners.
A comprehensive network will continue to provide value, often serving as the lead source of referrals for agencies. In the How to Start an Agency Masterclass, we’ll uncover Slam’s cold outreach and content strategies, allowing you to turn your LinkedIn profile into a lead-generating machine.
Establishing Your Operational Processes
A scalable agency is founded on clear operations. By establishing these processes early on, you'll mitigate the growing pains that often come with a rapidly expanding client base.
As your client base grows and you begin to hire employees, these processes will serve as a benchmark to ensure your agency retains quality at scale.
While these processes can outline any aspect of your agency’s conduct, some of the most critical include client onboarding, communication, and project management.
Client Onboarding
From your first client interaction to establishing service terms, a consistent agency onboarding process allows you to easily identify what works and what doesn’t.
In your client onboarding operations, the basic framework includes:
- Identify client needs and goals
- Tailor an effective solution
- Agree on pricing and deliverables
Each of these operational processes should contain specific information detailing how you interact with the client at this stage. As more and more clients go through your set processes, you’ll be able to effectively collect data on where sales are lost, allowing you to continuously optimize your operations.
Communication
After the sale, communication is still a key factor in retaining clients and optimizing internal operations. An effective communication process will outline the means of communication, as well as the necessary client touch points.
For example, you might mandate that your team reach out to each client on a weekly basis to discuss challenges and opportunities. By doing so, you’ll establish a stronger relationship with your client, increasing the customer lifetime value.
These communications can go through a number of channels, such as:
- Slack
- Discord
While email is often sufficient for new agencies, software like Slack and Discord provide a plethora of tools, designed to streamline communication both internally and externally.
Project Management
Once you’ve onboarded your clients and established clear communication guidelines, the next key consideration is how you’ll manage your projects.
As your client base grows, you’ll need to integrate clear guidelines detailing the organization and management of each project. This ensures that your services are scalable and that your service quality is not hindered by a surplus of clients.
For project management, you’ll likely seek one of the following tools:
- Google Sheets
- Notion
- Monday.com
By managing your projects with these tools, you can track your deliverables and deadlines, ensuring each project is on-schedule. At Slam, we use Notion to organize client accounts, project timelines, meeting notes, and any important information for a project.
To help you format your Notion account, we’ve also developed a Notion document template to help ensure your agency remains on-task and on-time.
Financial Accounting
The final key operation is accounting. To start and scale a digital marketing agency, you must have a clear understanding of your finances, including monetary key performance indicators (KPIs) and accounting processes.
By monitoring your marketing agency KPIs, such as cost per acquisition, profit margins, and average lifetime value, you can optimize your finances and ensure your agency’s pricing is profitable and scalable.
To track and optimize your finances, the following tools are often used:
- Google Sheets
- Stripe
- QuickBooks
- Xero
Starting off, Stripe is often the go-to solution for transactions and analysis, which can be supplemented with additional data through customized spreadsheets on Google Sheets.
As you scale, you’ll likely seek a more comprehensive solution, like QuickBooks or Xero, to effectively monitor and analyze higher volumes of transactions.
Ready to Start a Digital Marketing Agency with Slam?
With this article, you’re well equipped to begin your journey into reaching these clients. However, this is just the foundation.
If you’re serious about building a 7-figure digital marketing agency like Slam, you’ll need to invest time and resources into understanding each aspect of your business and services.
Fortunately, you don’t have to look too far. We’ve compiled everything we’ve learned from scaling Slam Media Lab in our How to Start an Agency Masterclass.
Each module breaks down a critical step in building a successful marketing agency, sharing over 20 agency tools, templates, and 10 hours of guides throughout the course.
- Blueprint to creating your agency
- My Journey (Slam’s Origin Story)
- The role of an agency CEO
- The company setup
- Finding your niche
- How to get your first clients
- Setting up services & pricing
- Crafting a winning proposal
Through hard work, consistency, and the implementation of these strategies, you can build, operate, and scale a digital marketing agency with confidence.
Liked this? Check out our specific guides for your agency type!
- How to Start a Content Marketing Agency
- How to Start a Creative Agency
- How to Start a Facebook Ad Industry
- How to Start a PR Agency
- How to Start a Google Ads Agency
- How to Start an SEO Agency
- How to Start a Social Media Marketing Agency
- How to start an Email Marketing Agency
- How to grow a Digital Marketing Agency
- How to market your digital marketing agency
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