Going through a redundancy? Want something different from your career in marketing? Interested in becoming a business owner? Read on to find out how to start a digital marketing agency in 2023, to be motivated and kickstart something new.
Thinking of starting a Digital Marketing Agency in 2023…?
Follow these steps.
- Digital marketing industry size.
- How many marketing companies are there?
- What does a digital marketing agency do?
- What skills do I need to build a digital marketing business?
- Developing marketing skills.
- Developing business skills.
- Why would I start a digital marketing agency?
- How to start a digital design agency.
- Develop a plan and business model
- Work out your costs.
- Define your digital marketing profile/niche
- Team structure.
- What should you charge?
- Growing your clients.
A digital marketing company has an extremely important role to play in helping businesses to grow. It can be very rewarding but hard to know where to begin if you’re thinking of getting into this industry.
We’ll show you the pros and cons, what the opportunities are like, why you would consider this path and how to go about it.
The next discussion focuses on the general size of the market. Here, we explore the profile of the digital marketing industry. This also includes the level of potential opportunities.
Digital Marketing Agency Industry Size
Digital marketing is a popular career choice for sure and has been for a while.
Is there still a demand from companies looking for digital marketing services though? Here are a few statistics to help answer this.
Research by Statistica notes that advertising spend has been increasing globally since 2010. This is with the exception of 2020 when it decreased.
The chart below shows that this figure was $521.02 billion in 2021. Furthermore, it is forecast to increase year on year. In 2022, it is anticipated to be $602.25 and reaching $876.1 billion in 2026.
Likewise, digital marketing software is predicted to increase in value as well. In 2021, it was worth USD 56.62 billion.
This is expected to expand at a compound annual growth rate (CAGR) of 19.1% from 2022 to 2030.Grand View Research
Furthermore, Oberlo has specified the value of the digital advertising market to be $602.25 billion in 2022. This represents 66.4% of spend overall on media ads.
Media ads refers to promotions that take place on any internet-related device. This includes a computer, smartphone or mobile device. In addition, implies content like videos and the results on search engine pages.
As well as this, advertising growth rates are forecast to be as follows:
But what’s the case in other regions? In 2021, digital advertising spend was €830m in Ireland, representing a growth rate of 27% year-on-year. (Source: ThinkBusiness)
We can conclude from the evidence above that digital marketing continues to be in high demand. The next question is what kind of competition is out there?
How many competitors are there in digital marketing?
Interest in digital marketing services has increased and so too has the number of agencies, consistent with this.
Between 2017 and 2022 in the US, for example, there has been a 17.4% rise in the number of organisations within the digital advertising agency industry.
In 2022, there are around 7, 761 companies in the US. The state of California has the largest volume, consisting of 2,323. This is followed by New York with 1,548 while Florida has approx. 1,183.
This trend is being experienced in other parts of the world too. The UK has seen a growth of 5.6% in 2022. Currently, the number of agencies stands at around 7,227 (ibis world).
The primary locations are London with 35. South-East has 17 companies whereas the North-West has 10.
Moreover, there are around 881 advertising/marketing agencies in Ireland. The market here is estimated to be worth around €776m. And 5,051 individuals are employed within the industry (ibis world).
We can see from the information that, despite economic changes, the number of marketing agencies has accelerated in line with demand.
This will obviously vary from one region to another. These understandably tend to be centred around where the largest concentration of potential traffic is.
It is important therefore to factor in where you are going to based, your local market and how you are going to capture a slice of the larger market.
In order to capitalise on the opportunities, you will need to be very clear about what a client’s expectations are. This brings us nicely to our next topic which discusses the role a digital marketing performs.
What is a Digital Marketing Agency expected to do?
Digital marketing refers to any promotion, activity or campaigns that are performed online. These tasks are often carried out on behalf on businesses and individuals by professional marketing service agencies.
One part of this equation is to fulfil an individual SME’s marketing needs. This can mean different things depending on what the objectives are.
In general, it involves building strategies that are designed to produce results and quantifiable marketing outcomes.
This can include the development of a promotional campaign on social media with the goal of increasing brand awareness. This can be measured by the number of new followers or fans that you attract.
Another will require a constant pipeline of prospects where the implementation of a lead generation programme can provide a solution. The metric for this can be seen through the conversion rates.
What skills do I need?
There are fundamentally two answers to this question. Typically, people will start by becoming qualified. More importantly though, you have to have the expertise to prove that you are capable of delivering projects successfully.
Developing Your Marketing Skills
From an academic perspective, you can earn your third level qualification from a relevant institution. This will provide a lot of the theory behind the subject matter.
In Ireland, there are plenty of options to become accredited. You can find a list of universities and colleges for undergraduates on the Central Applications Office website.
In addition, there are specialist providers like the Digital Marketing Institute. We have personally used this avenue and highly recommend it.
They are the leading global standard in Digital Marketing Certification. Their timeline states that they have certified more than 30,000 people. They also have in excess of 160,000 members globally.
They offer a variety of course and study options including full-time, part-time and distance learning. These will provide you with either a general introduction to the subject or help you to specialize in certain fields.
Learning the theory and completing coursework is different to carrying out actual projects. You will therefore need to build up your practical experience.
There are a number of ways to do this. An internship will give you an opportunity to start your training. This will expose you to a real-life work environment while developing your experience.
Volunteering to carry out projects for friends and family is another way that you can learn the ropes.
Developing Your Business Skills
Running and managing a business is very different to being an employee and requires a specific set of skills.
You need to have an understanding of finances and accounts, accessing resources and being responsible for the company strategy. Marketing only forms a small part of this.
Some other skills you need for this role include:
- People management.
- Project planning and management.
- Delegation and time management.
In short, there is a lot more pressure that you need to be ready and prepared for. Usually, the best way to polish those skills is to start out within that type of environment.
We have determined the two main skillsets that are specific to marketing but also required to run a business.
Let’s see what exactly a digital marketing business is expected to deliver.
There is a lot involved in building a business from nothing. So, why would anyone do it?
Why would I start a digital marketing agency?
There are a number of reasons why you would consider starting a digital marketing company in the first instance. Sometimes it’s because of a redundancy or a change to financial circumstances.
Others motivated by:
- Helping companies to fulfil their ambitions
- Digital marketing is a supportive role where you can see your results making a difference to a company’s bottom line.
- Problem solving.
- Again, digital marketing requires you to identify what the difficulties and hurdles are for a company. This also means putting a plan in place that is designed to resolve those issues.
- Enjoying a challenge.
- Marketing can be a challenge, but in a good way. It involves analyzing the activity that SMEs either need to be or are doing and coming up with a series of fixes that will help them. All of this can be extremely rewarding.
- Broadening your knowledge.
- Working within the digital marketing industry provides access to a range of different sectors. This, in turn, helps to widen your own experience and expertise.
How to start a Digital Design Agency.
Follow these steps below to guide you along this process.
1. Develop a business plan and strategy
Start with a plan. Like any other business idea, you need to have clear direction.
This will force you to properly think through what you want to achieve and what’s required to get you there.
Performing a thorough analysis will get your mind and head right for what’s ahead. It is also good practice to define goals and how you are going to measure them.
2. Work out your costs.
In terms of set up costs, one of the largest expenses is generally employees and your own time. This is because digital marketing and advertising agencies are typically labour intensive.
Figures presented by ibis world indicate that the largest percentage of revenue for business in the digital advertising agencies industry goes towards purchases (33.3%). Then wages (20.1%) and lastly rent and utilities (3.3%).
Renting office space is obviously a big consideration. However, you can shop around to get the best rates.
Digital marketing doesn’t have to be fixed. It lends itself well to working remotely so that’s another option.
This has been made much easier now with workplace apps such as Google workspace. These are designed to improve productivity and helping teams to collaborate better.
Your expenses will be defined by the type of agency you are. We will explore this further in the next section.
3. Define your digital marketing agency profile/niche
While there are opportunities, there is competition as well. You need to find a way to differentiate from other agencies.
The most natural place to start is by reflecting on the expertise that you already. Companies value experience. They want to know that the contractor they choose knows their industry.
In today’s economic climate, there are also many sectors who are struggling. Therefore, marketing budgets will be affected. You need to identify those who are demonstrating growth.
Emerging sectors in Ireland, for example, include:
- Information and Communication Technology (ICT),
- Financial Technology (FinTech)
- Financial Services
- Biomedical Sciences. (Source: TC Global)
Whereas emerging sectors in Germany primarily consists of manufacturing Industries and includes-
- Automotive (Mercedes-Benz)
- Research and Energy
- Environmental Technology Industry. (Source: TC Global)
Having researched and confirmed what your niche is going to be, the next logical step is to put a framework in place.
4. Digital Marketing Team Structure
When you’ve decided your niche, you are ready to put your team structure in place. Are you going to be freelance or do you need additional resources to deliver projects?
It is likely that you will be doing everything yourself in the beginning. When you want to scale your business, you’ll want the right professionals.
You have two main choices for staff. Either freelancers or employees. The advantage of the former is that you can keep your costs to a minimum. Secondly, you can hire them on a per-project basis.
In each case, make sure they have the proper credentials by:
- Starting with delegating easy tasks to them.
- Conducting a trial with a pilot project.
Your team profile depends on the services you expect to provide as well. If it’s websites that you offer, then you want to have a designer or developer on board.
Play to your strengths. Do what you are good at. Also look at where you can capitalize on opportunities or trends.
Build your team around these qualities. You can also expand these skills as your own business needs grow.
5. What should you charge?
Your pricing structure will depend a lot on three primary considerations i.e:
- The services you offer.
- Your level of expertise.
- Your business model.
For smaller projects, it’s easier to charge by the hour. But you need to work out what this rate is going to be. Take into account your overheads and any other expenses. Then apply a margin on top of this.
Lots of companies specify a minimum project fee, usually starting from around €1,000. On average, the hourly rate tends to vary from approx. €25-199.
Alternatively, you can charge a retainer fee for ongoing services. Just make sure that you are clear about how much time this covers, on a monthly basis.
Again, it depends on the number of staff that is required, or level of experience needed.
It’s good practice to develop a suite of packages based on what you intend to offer. This can be communicated easily to customers and provides transparency.
Build a selection of basic, intermediate and advanced packages. Different customers will have individual needs, after all. This will allow you to cater for a range of groups as well as giving them choice.
Each of the services that you promote can come with a list of specifications. Customers can also see what is included.
Check out this example of what a basic website design package might look like.
Example Website Design Packages
6. Grow your client base
Growing your list of potential clients can be thought of in a similar way to a job application. You need to build your CV. Or, in other words, your portfolio.
To begin your programme of lead generation, start by asking family and friends. There are usually plenty of people who are happy to help.
In the beginning, you’ll probably be doing a lot of this work for free or at a reduced rate. But you’ll benefit from it in the long run.
Another option is to check job postings. Set up alerts on professional platforms such as Linkedin. And receive notifications for relevant vacancies that you can pitch for.
Lead generation is an art in itself. It’s based on knowing what your ideal customer is in the first place. Create buyer personas to define who they are. This also concentrates your marketing efforts on the individuals you want as your client.
Use social media and your website blog to get the word out. Create content that resonates with your audience.
Carry out research to understand what their issues or objections are. Then respond with practical solutions that addresses these.
Ultimately people need to feel reassured. And you need to give them reasons to do so.
Advertising on social media and developing pay per click ppc campaigns will also help you to build brand awareness.
Starting a new marketing business isn’t easy. But it’s not impossible either. And with the right planning and research, anything can be achieved.
Lastly, the best piece of advice we can share is never stop learning! There will be failures and it won’t always go your way. However, these lessons help you to get better.
Also, seek out small business support agencies in your area. They are there to guide you along your journey.
In Ireland, there are 31 local enterprise offices (LEO), for example. They are there to help you manage your business effectively through resources, grants and advice.
If you need any further information, please contact us directly firstname.lastname@example.org. Alternatively, submit your question(s) in the comments below.
The best of luck with your new venture!
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