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How to Start a Marketing Agency Business from Scratch in 17 Steps

Do you want to start a marketing agency from scratch? If YES, here is a complete guide to starting a marketing agency business with NO money and no experience. Starting a marketing agency can be a very lucrative business no matter how stiff the competition may be. There are many kinds of marketing agencies in existence especially with the evolution of the internet.

If you therefore intend to start your own marketing agency, you must first know which area would best suit you, because while some marketing agencies concentrate in creating adverts for newspapers, magazines, radio, television and billboards, others concentrate in creating adverts for their clients who have websites.

Since you intend starting and running your own marketing agency, you will need to take some courses that will be very helpful to you during the course of running your own business. The courses do not have to be formal but could be certifications that will help improve your experience as an entrepreneur.

For instance, taking courses in management will help you handle the management structure in your company, and taking some courses in accounting will help you understand your financial records to an extent. Asides from taking these courses, you will need to keep up with the trends in the advertising industry by reading relevant periodicals and attending conferences and seminars in order to know more about your competition as well as further use what you have learnt to improve your business.

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Drawing up a business plan for your marketing agency business is very important as it will allow you to draw up some short term and long term plans regarding your business.

Finally, the way to get the attention of potential clients is to advertise your business using several channels. Another thing that must not be neglected in the course of advertising your business is your website. Your website will make your business more visible to your clients, so it is essential that you put great effort into making it a great website.

17 Steps to Starting a Marketing Agency Business from Scratch

Table of Content

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1. Understand the Industry

According to IBISWorld, the advertising agency industry is worth $44 billion annually and has been predicted to have nearly 4 percent growth between the periods of 2011 and 2016. There are more than 67,000 advertising agencies in the united states of America employing more than 255,000 people. Even though the industry is experiencing growth, there have been lots of losses as regards traditional services as marketing agencies are now focusing on digital media.

The growth experienced by the advertising agency industry over the five year period (2011 to 2016) has been due to corporate profit and the evolution caused by the digital media, which has allowed more operators to be able to reach their target audience.

This however does not mean that the industry hasn’t had its own share of troubles as digitization has caused the industry to become more fragmented, thereby forcing existing operators to get more creative in trying to remain with the trend.

The fact that some companies have moved to embrace digital services has created an avenue for these companies to start specializing in online advertising in order to adapt to changing times. This act has helped the advertising agency industry to grow tremendously with revenue rising to nearly 4 percent between a five year period (2011 to 2016). In 2016 alone, revenue in the industry increased by 1 percent to surpass $44 billion as companies started spending more on marketing campaigns with demand from the downstream sector improving as well.

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According to IBISWorld, the digital advertising agency market is worth $14 billion annually with a projected 13 percent growth between the years 2011 to 2016. There are more than 7,800 advertising agencies in the United States of America employing more than 78,000 people.

The rapid growth in the industry is due in large parts to the quick switch from the print media to the digital advertising mode. Companies in this sector of the industry have used digital media outlets to create and place advertising campaigns. Most of the companies have also provided cross-device advertisements.

The reason why there has been such tremendous growth in this sector is due to the fact that majority of those in the target market have increased traffic for websites by using their smart phones, tablets and other gadgets. This has allowed businesses to use more of digital advertising in order to be able to build awareness for its brand by using multiple platforms.

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Most of the advertising agencies are located in regions that have the greatest business activities. This therefore means that most of the digital advertising agencies in the United States of America can be found in the Southeast, Mid-Atlantic and Western regions. Revenue generated in the industry follows where most of the multinationals and large corporations are located which are primarily in regions such as Mid-Atlantic, Great Lake as well as West regions.

The southeast for instance accounts for more than 21 percent of the industry’s establishments, even though businesses that are located in this region are smaller than that of their counterparts in the Mid-Atlantic which accounts for more than 20 percent of the industry’s establishments. City wise, New York has a significant number (11 percent) of the industry’s establishments which is due to the large number of advertising agencies that have their headquarters there.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who require the services of a marketing agency cannot be relegated to just a group of people and organizations as those who require the services cut across people all over the world especially due to the internet. This is so because more people and organizations are beginning to see the effect of marketing their products or services via the internet.

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Therefore, if you are looking to define the demographics of your marketing agency, you should strive to make it all encompassing. It should include profit oriented and nonprofit oriented businesses and personalities across different fields and endeavors.

3. Decide Which Niche to Concentrate On

The advertising industry is a huge industry that uses several means of campaigning to help clients achieve their intended goals and objectives. Profit and nonprofit making businesses have used marketing agencies to achieve their desired objectives with large sized companies often having to employ advertising agencies that will work with their own in-house marketing department in ensuring that the goals and objectives of the business is achieved.

However due to the fact that the advertising industry is a huge one, more marketing agencies have started adopting niche areas so that they will be able to stand out and attract the clients they need for their business. Therefore, some of the niche areas where you can offer your services to clients in the advertising industry are;

  • Integrated Advertising Services
  • Public Relations Services
  • Creative Services
  • Media Planning, Buying and Representation
The Level of Competition in the Industry

The level of competition in the marketing agency business has a little dependence on the location of the business especially if you are offering your clients certain kind of services.

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If you are offering a niche service that is based entirely on the internet, then you will be able to offer your clients services from anywhere as what most clients are after especially with online marketing agencies is that their marketing campaigns get to their intended target market. This means that no matter what part of the world you are in, as long as you are able to give clients what they want, you will be able to compete.

The advertising industry is so huge with new marketing agencies cropping up every now and then, which makes companies to struggle to stand out and get noticed by their clients. This has therefore led to companies choosing niches that will allow them to stand out from their competitors easily.

4. Know Your Major Competitors in the Industry

The advertising industry is a huge one and as such there are many marketing agencies that are quite popular not only in the United States of America but also globally as well. However, since not all of them can be listed here, only a few will be. The criterion for choosing which marketing agencies are well known depends on the quality of their services, their length of time in the industry as well as their strategies and marketing campaigns.

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Below therefore are some of the well-known marketing agencies in the United States of America as well as globally;

  • Omnicom Group
  • The Interpublic Group of Companies Inc
  • Showroom Logic
  • PMG Worldwide
  • The Brandon Agency
  • JJR Marketing Inc
Economic Analysis

The marketing agency in the United States has undergone several changes between the periods of 1982 to 2007. Some of the changes it has undergone has to do with unbundling of certain segments in the industry and carving out new services such as copywriting and media placement, which is a change from the traditional all inclusive services that most agencies in the industry engage in. During this period as well, agencies also began to charge their clients per service rather than collecting commissions on media placements.

The internet and technology has made it easy for agencies to re-organize internally so that they can be able to position themselves in such a way as to offer their clients more solutions that is beyond the traditional media placement. This has therefore caused the price of advertising to drop, especially as advertising via the internet is not as expensive as the traditional methods.

The demographic environment such as age, population, geographic distribution and an increase in education and income level has always had a huge bearing on how advertising agencies are able to get clients and help them achieve their intended goals and objectives.

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This is because these varied factors affect how the target market will perceive the clients and so strategies that take these factors into consideration are necessary so that the effect of what the client intends for its target market will have the right impact.

Social issues have also turned to a trend in this industry as this has made marketing agencies to change the way they use advertisement to reach their clients. This has made more marketing agencies to connect with the society so as to ensure that the advertisement not only reaches their clients but changes the perception of the client positively towards the products or services.

5. Decide Whether to Buy a Franchise or Start from Scratch

Starting your marketing agency business from scratch or buying a franchise is one decision that you might have to make as an entrepreneur. Each option has its pros and cons and you might need to weigh each pros and cons seriously. In starting your marketing agency business from scratch, you will be in charge of all the major aspects concerning your business such as making decisions that will have an impact on your business in the short and long run.

This is advantageous because you can gauge how your business is doing and effect changes where you feel necessary. Starting from scratch can however be very overwhelming especially if you haven’t run a business before or if you have no experience in the advertising industry. Buying a franchise for your business on the other hand might be beneficial to your business especially if you do not have the needed experience and want to run your business while learning about it as well.

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Before however, choosing a franchise for your business, you should ensure that you have conducted a thorough investigation as regards the franchise, so that you do not end up wasting money in getting a franchise that would not favor your business. You can also compare several franchises and find out what their different capabilities are before choosing one that would best suit your business.

6. Know the Possible Threats and Challenges You Will Face

Threats and challenges in a business are nothing new, which is why as an entrepreneur, you must be ready by having laid down strategies that will help you combat any threats and challenges that would arise in the process of starting and running your marketing agency business. It should be noted that there isn’t much you can do about any challenges and threats; therefore you shouldn’t bother with plans on how to stop them but on how you can manage them.

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Some of the threats and challenges that you might face when starting your own marketing agency are; not having enough clients for your business, as clients have to see what you are capable of before allowing you to handle their campaigns. Other threats and challenges include intense competition from already existing marketing agencies as well as competition from new entrants into the industry.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

Any of the legal entities that you intend to choose for your business should come with the awareness of the following factors such as the ease at which you can set up your business, ownership of the business, how you will be taxed and also the liability that you will face during the course of running your business. Other factors that you will also need to consider are your start-up capital, the risk involved and how it will impact on your business.

There are four different kinds of legal entities; sole proprietorship, partnership, corporation and Limited Liability Company (LLC).  Some of the legal entities when chosen cannot allow you to source for funds from external factors or allow you to have primary control over your business or its activities.

The sole proprietorship is one of the easiest and simplest business entities and is often used by majority of entrepreneurs in the United States of America.

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An LLC is a company that has a hybrid structure where the owners are regarded as separate entities from the company. Here the owners enjoy tax and flexibility benefits from a partnership structure. In a corporation, the legal entity is also regarded as separate from the owners. There are several types of corporations and they are C Corporation, S Corporation and B Corporation.

8. Choose a Catchy Business Name

Choose a catchy name for your marketing agency business because the name you choose has to inspire your clients to work with you and also give them the needed confidence in your ability to help them achieve their goals and objectives. Because your business is in the advertising industry, it is necessary that you choose a name that is reflective of the industry you are in, whilst also being memorable and unique.

If you are therefore looking to start your own marketing agency business in the United States of America and are looking for names that you might use, below are some;

  • Swordfish Media Agency
  • Talbot and Talbot Group
  • Revenant Media
  • Lulu Media Agency
  • Gugu Media Group
  • Triple C Media Agency

9. Discuss with an Agent to Know the Best Insurance Policies for You

As a marketing agency, it is important that you acquire insurance policies that will protect you from having to spend from your pocket should any incident occur – either to your employees or clients – during the process of discharging your duties.

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Insurance policies are therefore very important for your business and you should consider getting the basic ones for your marketing agency business. If you aren’t sure of what insurance policies to get for your marketing agency, then you need to consult an insurance agent or broker to help you choose the best insurance policies for your marketing agency.

Below therefore are some of the basic insurance policies that you should consider purchasing if you intend starting your own marketing agency in the United States of America;

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

Intellectual property protection for marketing agencies is a growing concern that firms don’t fully understand. This is because marketing agencies are tasked with helping clients stand out in their respective industries by creating logos, slogans or marketing campaigns that will help their clients achieve their desired goals. However, it is very important that marketing agencies protect their creativity so that it does not run afoul of or infringe on the creative property of others.

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In order to intellectually protect your creativity as a marketing agency, you should first get your client to sign an agreement that will not allow them lay claim to any work that has been protected as a copyright, unless they sign a document that transfers the rights to them. Also, you will need to obtain a trademark clearance that will ensure that your intended slogan, logo and concept has not been used by another firm. All these must be established before you can register your trademark and copyright.

11. Get the Necessary Professional Certification

Even though clients are on the lookout for results when they use your marketing agency, having certifications are one way your business can stand out from its competitors. If you therefore are looking to not only boost your profile, but to also make an impact in the advertising industry, then you should look towards acquiring the necessary certifications in your area of specialization.

Some of the certifications that you should look towards acquiring when starting your own marketing agency are;

  • Certified Marketing Consultants and Ad Agencies
  • Professional Certified Marketer
  • Certified Marketing Management Professional
  • Google Adwords Certified Professional
  • IAB Certification Program

It should be noted that while these certifications are not compulsory, they, in addition to your experience and portfolio give your marketing agency the boost it requires.

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12. Get the Necessary Legal Documents You Need to Operate

In running any business in the United States of America, the regulatory authorities expect you to have the necessary documentations in place. Not having the necessary documents in place will mean you are running your business illegally, and you will run into serious trouble if the law catches up with you. If you aren’t sure of what legal documents you should have, then you need to consult an attorney with experience in your industry to help you out.

Some of the basic legal documents that you should have in place if you expect to run your own marketing agency in the United States of America include;

  • Certificate of Incorporation
  • Operating Agreement
  • Business License and Permit
  • Business Plan
  • Employment Agreement
  • Contract Documents
  • Non-Disclosure Agreement
  • Insurance Policy
  • Employer Identification Number (EIN)
  • Federal Tax Identification Number

13. Raise the Needed Startup Capital

Financing your marketing agency business can be very overwhelming as what you will need to get in order to run your business competitively will have to be in line with what is current. Sourcing for start-up capital is always very tasking for an entrepreneur, which is why it is important that you have a well detailed business plan at hand as this will help convince potential investors of your commitment towards running your business.

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Some of the options you have to consider when sourcing for start-up capital for your marketing agency are;

  • Raising money from your personal savings and sale of personal properties
  • Sourcing for soft loans from friends and family members
  • Apply for loan from banks
  • Source for loans from private investors

14. Choose a Suitable Location for your Business

If you are starting off your business on a strained budget, you should be able to run your business from home especially if the business is one that is on a small scale and you are the one that will be running most of the aspects. All you would need to do is create a space separating your office from the rest of your home, especially if you do not have a garage or a den.

Another reason why you can run your marketing agency business from home is if you are offering your clients online means of marketing as this means that you would be able to run the services for your client from any location and would not necessarily have to physically meet with them.

If on the other hand, you intend to run a business that will employ others, then you might need to lease or hire a facility that will allow your clients to meet with you. You should ensure that where your marketing agency is located is close to or within your target market. When choosing a facility for your marketing agency, ensure that it is in an area that is easily accessible to your clients as well as employees and make sure that it is within your budget.

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15. Hire Employees for your Technical and Manpower Needs

Starting a marketing agency is a business that can be very lucrative but also demanding, because the industry is one that is fast paced. Therefore as an entrepreneur starting this business, you need to be ready to absorb all that the industry will bring. Owners of marketing agencies always need to remain relevant by keeping up with the trends in the industry as this will not only be to their benefit but to their clients as well.

You do not need much equipment to help your clients achieve their goals and objectives. Some of the equipment you will use are those that can be bought for new or fairly used or even rented as the occasion demands. Therefore, the equipment that you will need to work effectively in your marketing agency are; computer, multi-color printer, scanner, phone, digital camera, office stationery, and software.

The employees that you would employ for your marketing agency should be dependent on the size of your firm. If you intend to start a business that is on a small scale and offering only one kind of service, probably due to your budget, then you might need to run most of the crucial services alone and then outsource some of your tasks to others. If however, you intend to offer a variety of services, then you would need to consider getting more employees to work for you and help you attain all your intended goals and objectives.

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The kind of people that you would require to run your marketing agency efficiently are; a Chief Executive Officer (CEO), an admin and human resources manager, a copy editor, a graphic designer, a marketing and business development executive, an IT specialist, an accountant, a customer service executive, a cleaner and a driver.  From the above break down, you will require at least 10 key people to run your marketing agency business successfully.

The Service Delivery Process of the Business

The process involved in carrying out a client’s task in a marketing agency varies depending on what it is the client wants. However, there are basic steps that a marketing agency has to go through to deliver what the client wants.

Once the marketing agency has secured a client, the client will state in clear terms what it is they want. The marketing agency will then create a theoretical plan on what the client wants and show this to the client who might then make some changes or agree with what the agency has created.

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Once there has been an agreement, an agreement will be signed as regards the intellectual property and who has what rights before the marketing agency uses whatever channels have been agreed upon to execute the ideas of the client in such a way as to make the client attractive to its target market.

16. Write a Marketing Plan Packed with ideas & Strategies

Marketing is a very vital aspect of any business because it is via marketing that a company generates the needed revenue that will sustain and grow the business to its intended state. Asides from helping to generate revenue for the business, marketing also helps to create awareness for a business by bringing it to the attention of the intended target market.

In crafting effective marketing strategies, a company must first conduct a thorough market survey of the industry it intends to operate in. The market survey involves checking out the other operators in the industry, knowing their weaknesses and strengths, knowing who the target market is, what is expected from them and what they expect from the company.

There are different marketing channels available in helping businesses reach their intended market and therefore achieving their goals and objectives, with the internet being one of the most used and effective channels for any business. Below therefore are some of the platforms that you can use in advertising your marketing agency to your intended target market;

  • Introduce your marketing agency formally to clients by sending a letter and attaching your portfolio and also a brochure that contains your contact information, services and rates
  • Attend conferences and seminars in advertising and other related fields so that you can network and market your business
  • Offer potential clients lucrative deals and use the opportunity to market your advertising agency
  • Participate in or sponsor advertisements for community events or charity causes as a means to market your advertising agency
  • Ensure that you distribute handbills and business cards and also paste fliers in strategic locations
  • Place adverts for your marketing agency in newspapers and relevant magazines as well as on radio and television stations
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17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Being in the advertising industry means striving always to boost awareness for your brand as well as create a corporate identity for your business amongst all the existing marketing agencies in the same industry.

The aim of starting your marketing agency business shouldn’t be to only generate revenue and maximize profit, but also to ensure that your business is recognized beyond your area of operation and known by stakeholders within the industry as well as those outside the industry.

There are several ways by which you can promote your marketing agency and you should strive to know which will best suit your business depending on the niche that you intend to operate your business in. While promoting your marketing agency might require money, there are also other inexpensive and yet effective ways that you can promote your business.

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Below therefore are some of the platforms you can use to promote and create a corporate identity for your marketing agency business;

  • Ask your contacts who work in areas where you want to source for clients to help refer your marketing agency
  • Become a keynote speaker at some of the conferences you attend in order to create more publicity for your business
  • Make use of specialized websites in promoting your marketing agency
  • Make use of social media platforms such as Facebook, Twitter, Snapchat, Google Plus, and Linkedin to promote your marketing agency
  • Apply Search Engine Optimization (SEO) for your website in order to boost the rank especially when clients use the search engine to search for marketing agencies
  • Install billboards and banners in strategic locations all around the city where you will be operating from