Team strategizing in digital marketing agency office. Team strategizing in digital marketing agency office.

How to Start a Digital Marketing Agency? All You Need to Know

Running your digital marketing agency can be likened to a call into a whole new world of exhilarating professional adventure that comes with a wide vista of creativity and personal economic growth. 

Let’s ask a few questions that will set the stage for you. Do you like to work for yourself yet want to have choices for freelancing and a team? Does a fast-paced, project-oriented, client-facing work environment make you love Mondays? Do you ‘ride the waves’ when using social media and would like to explore its business side, too? Did we hear a “Yes”?

And at the crux of it all, would you mind having fun and earning at the same time from an industry that is highly likely to grow over the years?! We know that is a “yes” for you! 

How could it not be? Let’s look at how starting your digital marketing agency can fulfill many of your callings how you like and how you like!

1. Your Digital Marketing Agency, Your Call

When it comes to all the things you can do with a digital marketing agency, it’s more than meets the eye. So, it is worth looking closely at all the perks of having one of your own. 

1.1. How Big Do You Want to Make It?

Digital marketing business is versatile in terms of scalability and divergence. You may choose if you want to run the agency as a freelancer by providing a few hand-picked, specialized services. Conversely, you could hire people who specialize in providing services to different types of businesses, such as B2B or B2C.

What’s more? There is a solid divergent side to digital marketing business through collaborations, either on an ad hoc basis or under a regional or even global conglomerate. 

how to start a digital marketing agency
Pexels by Mikael Blomkvist

1.2. Grow as You Learn

Are you interested in venturing into the digital marketing business but have minimal experience and are not ready to set up a full-fledged agency yet? 

Depending on your comfort level, you can break up the journey into actionable steps, like taking digital marketing courses and setting up your agency. And, while you are at it, you can test-launch your digital marketing career through freelancing.

Most importantly, do not forget that the digital marketing business is a burgeoning sector in its formative years. It is a profitable business with global spending predicted to reach $4.7 trillion by 2025. We already have an impactful demo of what artificial intelligence (AI) can do, especially in the digital arena (more on this later). So, be prepared to keep learning and applying what you learned!

1.3. Ditch the 9-to-5

Apart from having the freedom and thrill of working for your own company, you can adopt working hours that suit your team.

This allows flexible scheduling and helps you coordinate the workload and varied client demands. This flexibility is handy in a performance-based work structure such as digital marketing.

2. At the Core of Digital Marketing Agencies

A digital marketing agency calls for, well, all things digital! Digital marketing, or online marketing, involves multiple methods and tools applied strategically per the client’s business goals. What are they?

2.1. Digital Marketing Strategy

Digital marketing strategies are goal-oriented conceptual and technical planning used to design campaigns that fit your client’s goals. Most of these are inbound online marketing strategies, meaning they are niche-based, personalized, involve 2-way interaction between businesses and their clients, and are measurable.

Unsplash by Austin Chan

Effective digital marketing campaigns strategically use both inbound and outbound methods. For example, hospitality businesses benefit from a mix of inbound digital marketing like SMM and event- and package-based outbound marketing.

2.2. Digital Marketing Methods

The primary methods used by digital marketing agencies are:

Content marketing: This is the base of digital marketing and covers the premise of written, audio and visual content that is meant to be strategically created and disseminated to clients. A few examples are blogs, podcasts, videos and social media content. 

Search Engine Optimization (SEO): This brings a website to the top of search results, technically called the Search Engine Result Pages (SERPs), and what business doesn’t want that? This is tough but gets the prized organic traffic to a website.

Pay-Per-Click (PPC): Online advertising where the advertisers pay a fee when their ads get clicked.

Search Engine Marketing (SEM): A paid search engine advertising method where businesses pay a fee to secure a designated space for ads at the top of search results pages to attract website traffic.

Social Media Marketing (SMM): This is precisely what it says and is executed with many strategies to use carefully chosen social media platforms, content, and influencers. 

Email marketing: This is an ever-popular outbound marketing strategy where businesses send curated content and relevant promotional materials to prospective customers.

Affiliate marketing: An advertising model where a business compensates third-party hosts or affiliate marketers to generate client traffic or leads for the business’s products and services. This also pays off in terms of brand identity and credibility. 

Native advertising: Also called sponsor content or partner content, it is a form of paid advertising. But unlike the traditional ones, the content, look and format blend with that of the site hosting the ad. Remember those Instagram ads that appear as posts? They make the promotion feel more of an informative and natural addition without risking coming across as pushing sales.

The Icy Canada team interviewed Joe Amaral, Founder and COO of Anthem Software, about the marketing strategies in the digital marketing business. Here is what he said:

Joe Amaral - Featured
Joe Amaral

“From my journey into digital marketing, beginning with a leap into an unfamiliar industry and learning through both founding and scaling businesses, I’ve discovered that certain marketing collateral types notably outperform others in today’s digital landscape.

Storytelling, woven into customer testimonials, and the use of visual mediums like infographics and videos, are paramount. For instance, at my second startup focused on software and marketing, we utilized customer success stories in our video marketing campaigns, leading to a noticeable surge in engagement and conversions.

This success underlines the potent combination of relatability and visual appeal in crafting compelling narratives.

Infographics have been another crucial element in our marketing toolkit, particularly when breaking down complex topics or data into easily digestible content.

These visual tools, bolstered by concise, compelling storytelling, have helped us distill complex marketing analytics into understandable insights that attract and retain audience attention.

This strategy not only facilitated a smoother communication channel with our audience but also significantly boosted our content’s shareability, amplifying our brand’s reach in the digital space.

Maintaining engagement in a dynamic online environment, especially through channels like automated email campaigns, taught me the importance of personalized, relevant content.

Leveraging data to segment our audience and crafting messages that resonate with their specific needs led to a marked improvement in our campaigns’ effectiveness.

For example, by employing behavior-triggered emails that cater to the user’s past interactions with our brand, we saw a significant uplift in open and engagement rates.

This approach of tailoring content to fit the audience’s context ensures that our messaging cuts through the noise, maintaining a strong connection with our audience in a digital world.”

2.3. Digital Marketing Tools

Are you wondering how you are going to use these online marketing methods? There are a bunch of software and applications that you can use to deliver these services. These tools are integrated into other tools for seamless and customizable marketing campaigns. Having the right tool stack will let you deploy intelligent campaigns.

From designing quality campaigns to measuring performances, Hubspot Marketing Hub is a great platform that turns data from multiple tools into implement-worthy insights and actions. 

For covering a host of strategies and campaigns, choose HubSpot, which provides powerful tools. Of all the tools, HubSpot CRM has made a following of its own. Why? It is free, besides being equipped with features such as lead generation tools! A few other tools here are email and prospect tracking.

how to start a digital marketing agency
Pixabay by geralt

2.3.1. SEO Tools and Content Marketing

Ahrefs sets the stage when it comes to SEO strategies. With this tool, you can analyze competitor traffic, keywords and backlinks and optimize your search ranking.

  • Another sought-after industry standard in SEO is Semrush. It measures the position of your keywords, explores new ones, and can do search intent analysis. 
  • For email marketing, it is HubSpot CRM, MailChimp, and ConvertKit. Create personalized video content with Loom and host live events with Demio.
  • Canva is a popular tool for web designing and infographics.

2.3.2. Social Media Marketing

Manage your clients’ multiple social media business accounts with Sprout Social, which has a dashboard for monitoring activities across multiple social media platforms. 

Tools like Audiense take social listening to another level. It is excellent for B2B businesses looking to prospect for targeted and personalized marketing. For that purpose, the tool categorizes users based on relevant metrics.

2.3.3. Artificial Intelligence

Make the best use of AI for digital marketing with Salesforce Marketing Cloud Intelligence. It will help dig for hidden insights from data, allow customizable analysis and create action recommendations. 

2.3.4. Analytics

For analyzing organizational data to determine the quality of campaigns of your competitors, your website(s), and SEO auditing, the best tools are Afrefs, Google Analytics, and Moz Pro.

For measuring user experience, e.g., how customers perceive your website, and to analyze their buying choices and behaviour, choose Hotjar, Mixpanel, or Google Search Console.

3. How to Start a Digital Marketing Agency

With its many opportunities and immense growth potential, the digital marketing sector also brings significant competition. Here are a few key steps to jumpstart your digital marketing agency:

3.1. Must-Have Skills

To stay ahead, we strongly suggest having practical digital marketing and business management experiences under your belt. 

As you start your business small, which is recommended, being skilled to handle a spectrum of jobs would drastically reduce setup and running costs before you scale up and start hiring professionals to do these for you. You would essentially need:

  • Digital marketing experience: Have a complete overview of digital marketing from practical hands-on experience. This will help you design suitable campaigns for your clients to increase your clients’ potential buyer traffic and sales and plan low-cost yet effective ways to provide services. 
  • Business management skills: As you are planning to run a business, basic skills like people and project management, budgeting and billing, and analytical thinking and decision-making are a must.
how to start a digital marketing agency
Pexels by fauxels

3.2. Make it Official 

You need to cover a few basic requirements to put your agency on paper and make it functionally official. While some of them should be a priority on your timeline as other tasks depend on it, you will build upon others as your agency grows.

3.2.1. Register Your Agency

To operate a business, you must register your agency with local authorities. However, since you would be starting small, you could preferably get registered as an LLP (Limited Liability Partnership) or as a sole proprietor instead. 

For that, you have to get registered with the taxation authority of your country and obtain an establishment license. This will enable you to open and maintain a current account under the name of your agency and will allow you to receive payments legally. 

3.2.2. Operational Setup

As the backbone, the operational setup provides the crucial structure for running your agency.

  • SOPs: This is a mandatory set of documents that delineate procedures to be followed to conduct a specific task, including preparatory processes for client onboarding, services and closing contracts, as well as other operational details. 
  • Mode of running: Decide whether you would run the agency remotely like many SaaS companies, with local employees in a physical office or hybrid. This aspect has room to evolve as you scale your business later.
  • Logistics: Obtain a toll-free number, register your domain, design creative logos, business cards and appropriate mascots, and set up technical logistics like laptops and internet connectivity. 

2.2.3 Financial Setup

Open your business checking account and decide on your auditor for tax purposes and accountant for financial record-keeping. This will lead you to prepare a financial plan, complete with budgeting and forecasting, cash flow avenues like loans or credit lines, and insuring your business.

Magee Clegg, the CEO of Cleartail Marketing, talked to the Icy Canada team about enhancing digital marketing effectiveness. Here is what he had to say:

Magee Clegg - Featured
Magee Clegg

“In my experience at Cleartail Marketing, integrating storytelling with customer testimonials and leveraging visual mediums has been key to enhancing digital marketing effectiveness.

One success story that stands out is when we increased a B2B client’s revenue by 278% in 12 months through a combination of strategic email marketing and the use of compelling visual content, including brand story videos and infographics.

These mediums allowed us to convey complex messages in an engaging and digestible format, significantly improving audience understanding and response rates.

We’ve also leaned heavily on personalized, automated email campaigns to maintain engagement in this digital era.

By segmenting our email lists based on specific indicators such as industry, engagement history, or expressed interests, we were able to tailor our content to better meet our audience’s needs.

This approach led to dramatic increases in engagement, including adding over 400 emails per month to a client’s list using LinkedIn outreach and scheduling 40+ qualified sales calls per month from LinkedIn and cold email.

The key was always to deliver relevant, personalized content that resonated with the recipient’s current needs and interests.

Moreover, by leveraging media asset tracking and marketing automation platforms like SharpSpring, we were able to gain insights into which types of content performed best and iterate on our strategy in real-time.

For example, we discovered that video emails delivered a much higher engagement than standard emails, leading to more sales opportunities.

Trial and error, guided by solid data analytics, allowed us to optimize our strategies continually and ensure maximum engagement through our digital marketing efforts.”

3.3. Business Model

Decide on the structure based on which your agency will provide marketing services.

3.3.1. Types of Digital Marketing Agencies

Depending on your team’s expertise, digital marketing agencies come in all sizes and scopes to offer the right services and attract clients. Following are a few common types of digital marketing agencies:

how to start a digital marketing agency
Pixabay by Buffik
  • Full-service agencies: These agencies provide most inbound marketing services through a full in-house team or a mix of freelancers. Often, these agencies attract a range of clients by providing cutting solutions, from core marketing services like branding and driving traffic to sophisticated tactics like secret shopping and NLP. They are almost sure to have a good base of retainer clients with whom they work closely and are also likely to be capable of mentoring. 
  • Multi-channel agencies: They provide digital marketing solutions by offering different services over multiple complementary channels. For example, a multi-channel agency may offer paid advertising services through PPC services, SEM, and affiliate marketing. These agencies tend to specialize in these niche services and are most likely to be hired by client businesses for a span of a project needing a specialized marketing boost.
  • Single-channel agencies: These agencies work on a single digital marketing channel. They could be an SEO agency driving organic traffic through keyword research, backlink audits, and content marketing. Likewise, it could be a digital ads/PPC agency boosting paid traffic through PPC, SEM and ad placements.

In an interview with the Icy Canada team, Timothy J Williams, Principal Consultant at Thinksia, explained the key factors when choosing a business model for your digital marketing agency. Here is what he said:

Timothy J Williams - Featured
Timothy J Williams

“Selecting the most suitable business model for a digital marketing agency, like Thinksia, involves a meticulous blend of understanding the client’s unique requirements, the value our services add, and the overarching goal of creating a win-win scenario.

From my extensive experience at Thinksia, I’ve piloted various approaches to billing and client engagement that align closely with specific project needs and expected outcomes.

For instance, considering a retainer model, our focus was on long-term partnerships where we could continuously add value through strategic insights, market analysis, and performance optimization.

This model suited clients looking for sustainable growth, as it allowed us to deeply embed with their teams, understand their business intricately, and act as an extension of their marketing department.

On the project-based or flat-fee end, we leveraged this approach for clearly defined projects where objectives were set from the outset.

This was particularly effective in scenarios like brand launches or targeted campaigns where the scope was fixed, allowing us to forecast resources and timelines accurately, ensuring transparency and alignment on deliverables.

Navigating between these models, communication has been the cornerstone of our strategy. By engaging in in-depth dialogs with our clients about their expectations and explaining the pros and cons of each model, we foster a mutual understanding that guides the choice of the business model.

This approach ensures that we not only prioritize client satisfaction and profitability but also adaptability, enabling us to align our services dynamically with client goals and market changes. The choice always comes down to which model best serves the client’s needs while ensuring our ability to deliver unparalleled value and drive impactful results.”

3.3.2. Service Offerings

At this stage, choose your service specialization based on target audience profiles. Do in-depth research to identify service delivery gaps and study underserved target markets and services offered by other agencies. Leverage your team’s expertise and digital marketing methods proven to yield higher RoI. You can continuously diversify your offerings later. 

You may get started with PPC/Google Ads and Social Media Marketing. These show quicker results but do not promise long-term success like lead conversion. Conversely, SEO-enabled content and email marketing could result in actual sales but may take much longer to show the results. 

When deciding what services to offer, there is always give and take, but the central theme is ‘the client is always right.’ So, decide on the services according to the profile of your target business clients. Other specialized services your agency could offer are web designing, lead conversion and nurturing brand positioning.

3.3.3. Pricing Structure

Finding the sweet spot between attractive offers and pricing structures that your clients cannot resist and those that generate sizable revenue for profit and paying your employees could be tough. But it doesn’t have to be so.

Have a tiered approach when it comes to pricing, and do not forget to offer brownies (i.e. free complementary services) to clients who keep coming back. The most common types of pricing structures are:

how to start a digital marketing agency
Unsplash by Bundo Kim
  • Retainers: This is popular with new and seasoned businesses, especially over time as retainers turn into long-term clients, as it allows the agencies to plan operations and finances. Keep the option open, but don’t beat yourself up if clients do not sign up for this right away.
  • Flat fee: A simple pricing structure when you are just starting and are yet to secure retainer clients. It is excellent for one-off services like SEO auditing. Make a precise estimate and charge for the whole project. 
  • Hourly billing: The best option is to divert your team’s resources when you are just starting. Fix hourly rates for each service you intend to offer, and multiply by the number of employees working on it for billing. This is great for services a la carte but can create issues if quotes do not factor in non-billable hours.
  • Performance-based billing: If you can attribute your work with measurable outcomes for clients like lead conversion, then this is your thing. Seasoned agencies or genius marketers can both reap lucrative rewards with this model. One potential setback is when clients withdraw, your income can reach a standstill. Top marketers hedge by asking for a flat fee upfront, a sign of confidence! Another option is to charge for a percentage of spending on the PPC campaigns and ads.

3.4. Built Brand Identity and Online Presence

Creating a name that speaks for itself takes expertise, focus services, and responding to client demand. Reach customers online and start creating a sales funnel for your target audience. Although it takes time and experience for any new business, investing your resources in this direction is worthwhile. 

3.4.1. Brand Identity

Start building an impactful brand by crafting mission and vision statements reflecting your agency’s unique offerings and overarching goals for serving clients.

Next, focus on humanizing your brand. If your brand were a natural person, who would they be? Do so by letting your clients feel you’re not here to sell your stuff but to solve their marketing needs.

  • Be client-facing and solution-oriented, which is the crux of inbound marketing.
  • Create brand authenticity and credibility by encouraging your employees to be engaging and proudly represent their work on their social media handles.
  • As your customer base expands, build a step-by-step portfolio by featuring your clients’ marketing success stories on your website, documenting one success at a time. This speaks volumes for your brand.
  • Offer free or discounted services, especially for charitable organizations or community projects. This would put a heart on your brand’s image.
how to start a digital marketing agency
Pexels by RDNE Stock project

3.4.2. Building Online Presence

Create an online presence by designing your agency’s website. This would be your essential marketing tool to showcase your brand’s identity by reflecting its values and services. 

Not comfortable with web development? No worries! With zero coding and a reasonable moolah, you may build your website with WordPress, complete with a highly customizable web design. 

What should you include in your website? Ideally, have these:

  • Short informative videos on services and creative solutions by your team (psst: these are outstanding achievements to showcase!). As the head of your agency, position yourself to publish your unique and expert perspective on crucial topics, for example, increasing the Lifetime Value (LTV) and reducing Customer Acquisition Costs (CAC) that are relevant for SaaS companies.
  • More on giving the credit where it belongs to your clients. As your business grows and accolades roll in, shift some of your website’s spotlight towards your clients at the bottom of the main webpage or your guest postings in reputable websites in the blog section of your agency’s website.
  • Pages for blogs and portfolios that would give your clients a broader view of where your brand stands in terms of the latest industry trends, future innovations and solutions, and best practices.

Leverage social media pages to build interactive and engaging connections with your clients, right where they are! Post what your customers might be curious about, take opinion polls to listen to your clients’ voices, and share behind-the-scenes photos and videos. 

3.5. Get it Rolling

Sooner than later, it will be time to draw back the curtains and let the show begin! 

3.5.1. Build Your Team

Initially, especially if you are starting small and do not have clients, keep your team to a minimum primary number or, ideally, just yourself. You would still need professionals to design your brand presence over websites and social media platforms. 

Afterwards, as you acquire clients, start hiring freelancers rather than full-time employees immediately. That would keep your overhead personnel costs to a minimum and give you flexibility in hiring as the type of projects roll in. This would warm you up for that dreaded transition when you delegate tasks to your employees later. 

3.5.2. Get Your First Client

The key to getting your first client is having an appropriate strategy to identify and find them, generate leads from social networks and online databases, and categorize newfound leads based on their preferences and relevant scoring parameters. For starters, reach out to your professional contact list.

how to start a digital marketing agency
Pexels by Ketut Subiyanto

4. More for the Go-Getters

Hungry for more? Check out these additional pointers that will feed the fire in you. 

What are some actionable steps for a beginner to work as a digital marketer?

For starters, get curious! You are already using some aspects of it through online buying and socializing. Get certified by business leaders like Google on SEO and social media marketing. Go on to intern, get an entry-level job with a digital marketing agency, and do a freelancing side hustle that would allow you to design real-time solutions for clients. Once you start seeing actual results, you could be ready to start your agency.

Could you suggest some hacks for growing my digital marketing agency?

Some of the sure ways to do this are by: 

  • Networking smart with other marketing professionals and companies by registering with associations like the Canadian Marketing Association, American Marketing Association and Digital Marketing Association.
  • Continually improve your marketing machine by strategically using new channels like AI. Tweak existing channels to achieve desirable solutions, e.g. by raising revenue through enriching the sales funnel, solutions for converting leads, and promoting product-led growth.
  • Continue building on the brand image by evolving your marketing strategy and unique selling propositions (USPs).
  • Emerge as an industry leader by continuing to promote yourself through impactful platforms and hosting strategic events. 
  • Nurture your clients- provide valuable information for business growth, add value to existing contracts through complimentary services, and enter into mentoring roles with companies by making their teams DIY-ready. 

Businesses prefer reaching clients and buyers through digital marketing because of its cost-effectiveness, especially for small businesses, and measurable ROI across outreach platforms and marketing strategies. 

Digital marketing is diverse regarding multi-channel outreach methods, resourcefulness in automation, personalization, and account-based marketing, and engagement in closely communicating with target customers through social media. 

How can I measure my agency’s performance and efficacy of our campaigns?

You may use the analytics tools mentioned above. Further, choose the Key Performance Indicators (KPIs) that are most relevant to the services you will provide. 

What’s Next?

It goes only as far as your imagination and execution, vision, and how you would want to execute it. As you start and throughout the journey, there are many resources to learn from the digital marketing industry. Use this article to plan your next big adventure to set up your digital marketing agency. 

Guest Author: Saket Kumar

Last Updated on by Saket Kumar


  • Lucy

    Payel is an avid writer. She hails from the community and public health fields. She has an insatiable knack for traveling, meeting people, and knowing their cultures and customs. Her writing reflects her passion in the lifestyle and health genre. Through her writings, Payel weaves words to bring out the nuances and angles of our lives and things that matter to us. Education MPH, MSc Specialization in Public Health and Biology Certifications/Qualifications MPH MSc in Biology

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