An advertising agency is a business that sells services of planning, creating, and organizing marketing campaigns. This includes, but is not limited to, research across various media outlets, crafting promotional materials, and buying media space.

With the rise of digital marketing, the global advertising market’s growth rate is projected to reach 4.8% in 2022 — making ad agencies a profitable business worth considering.

If you want to start an advertising agency but don’t know how to start, you’ve come to the right place. Here, we’ll be covering nine essential steps to create an advertising agency. we’ll throw in some characteristics that make a great advertising agency as well.

Let’s get started.

9 Key Steps To Starting an Advertising Agency

Like any other business, establishing an ad agency requires careful planning and proper execution. The following steps will show you how to start a successful advertising agency. Take a look.

1. Conduct Market Research

Since you have plenty of advertising agencies across the world to compete with, it’s important that you conduct market research and learn more about the business first.

Market research is essentially the process of acquiring information about your business’ target audience, competitors, the latest trends. The goal is to understand how your small business can thrive in the market.

There are two main types of market research — primary and secondary research. The former focuses on getting firsthand information about your niche and customers. Meanwhile, the latter concentrates on publicly available information, like market statistics, sales data, and trend reports.

Here are several market research methods you can perform to gain better insight into the advertising industry:

  • Interview ‒ have a face-to-face discussion with someone involved in the advertising business sector. Make sure to get trusted sources of information with a broad knowledge of the advertising industry.
  • Focus group discussion ‒ select a bunch of people from similar backgrounds and discuss specific topics in a group. The intention is to identify your target audience’s perceptions, ideas, and opinions.
  • Competitive analysis ‒ analyze the strengths and weaknesses of your competitors. Doing so will help you understand the current competition and your business’ unique selling points (USP).
  • Market segmentation ‒ divide your target audience into different groups based on specific characteristics. This is an effective way to learn their expectations, allowing you to craft customer-centered services.
  • Observation ‒ observe how your target audience responds to today’s advertising campaigns.

2. Define Your Target Niche

The next step is to find a niche you want your business to focus on. Doing so allows you to narrow down your advertising agency’s activities and potential clients, making it easier to cater to their needs.

For example, you can focus on the medical and health care niche if your target audience works in that sector. Alternatively, target the local consumer retail business niche if you want to help local businesses gain a broader market.

Remember to identify your USP when choosing a target niche. You can’t compete in a saturated market without offering something new to the table.

3. Write a Business Plan

After gathering all the necessary information, it’s time to put it into writing.

Having a business plan is essential because it establishes your business focus, helps you secure funding, and attracts professionals to help manage your small business. In short, it’s a guide to get your business up and running.

You’ll need to include these sections in your business plan:

  • Executive summary ‒ briefly outline the content of your business plan.
  • Company description ‒ provide detailed information about your company. Be specific on what problems your advertising agency tries to solve, the clients you’re aiming to serve, and the competitive advantages your business can bring to the competition.
  • Organization and management ‒ elaborate on your company’s structure, including whether you want it to be a limited partnership or a sole proprietorship.
  • Service description ‒ list all the services your advertising agency plans to offer and how they can benefit the customers.
  • Market analysis ‒ present your findings when conducting market research.
  • Financial plan ‒ explain the advertising agency’s financial situation. This includes, but isn’t limited to, financial goals, cash flows, and financial projections for the next five years. The goal is to convince investors that your business is worth investing in.

4. Register Your Business Legally

A company needs to have a legal structure. The most common types are sole proprietorship, limited partnership, limited liability company, and corporation. Your business type will determine how it operates and manages its assets, so make sure to do your research carefully.

After taking care of your advertising agency’s legal structure, you have to register it for taxes. The tax registration differs between countries and business types. Check with the local state to see how the procedure goes and how much you need to pay.

Finally, get all the necessary permits and licenses required by your state to run the business. Similar to the tax registration, the process and requirements differ per country. Therefore, check with the local government where your company operates beforehand.

We recommend getting business insurance to protect your company’s financial well-being from legal claims and property damage. As a small business, you can opt for General Liability Insurance, which covers claims during daily business operations.

5. Setup a Website

Having a business website is vital if you want to broaden your reach. Not only does a website enhance the agency’s online presence, but it also helps build its credibility as a reputable business.

There are several ways to build a website. If you don’t know how to code, you can hire a web developer to do the work for you. This method gives you plenty of freedom to design your desired website, but it costs the most.

Consider using a website builder or a CMS like WordPress to save money. Most website builders sell their tools on a subscription basis, so you only need to purchase the one that suits your needs. Meanwhile, CMS tends to be free but requires web hosting to operate.

Regardless of your preference, the website must showcase the company’s general information and your portfolio. As your advertising agency representative, the site should convey all the information your potential clients may need to influence their buying decisions.

Creating a Business Website

Here are some tips on how to create a good business website:

  • Keep the homepage minimalistic. Being the first page that your clients will see, it should be clutter-free and contains useful information about your business. Make it easy to navigate. Your clients should be able to find what they’re looking for easily. If you offer a wide range of services, consider adding a search bar next to the navigation menu.
  • Include calls-to-action on every web page. Use them to guide visitors when browsing the site and encourage interactions that may lead to conversions.
  • Optimize it for SEO. There are many things you can do to make it happen. However, it’s best to prioritize optimizing the page load speed as users tend to abandon web pages that take longer than three seconds to load.
  • Update the website content periodically. Besides affecting SEO positively, having an up-to-date website keeps your audience engaged and in the loop regarding your services and activities.
  • Display your contact information. The Contact Us page should be easily accessible and contains multiple channels to reach out to you with.

6. Create and Share Valuable Content

Content gives people the drive to continuously scroll through their news feed and subscribe to specific media streaming channels. It’s also one of the ways for your agency to be discovered. You can write content about digital marketing and other advertising related topics.

Writing content is also an excellent way to prove your expertise. Thus, ensure that the content you make is of high quality, original, and benefits the readers.

Creating content doesn’t always mean writing social media posts and articles. You can produce visual content like a video or an infographic to obtain the same goal.

Here are a few tips for producing engaging content:

  • Create content regularly. Whether you want to publish content daily or weekly, establish a fixed schedule to maintain consistency and credibility.
  • Establish a style. Like your brand, your content should have a unique style that represents the advertising agency.
  • Make it actionable. Use your content as a medium to promote the advertising agency and its services. Doing so will help drive engagement and leads.
  • Incorporate eye-catching visuals. This can be done by adding a video or an image to your post.

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7. Promote Your Business

Selling great services and publishing great content won’t do you any good unless you promote your business.

Here are a few ways to market your business:

  • Optimize your content for SEO. Ensure that you have the right keywords in your content. Doing so will help your site rank higher on the search engine results pages (SERP), resulting in more traffic and exposure.
  • Do a press release. The best moment to do it is every time you create something buzzworthy. Many free tools online sites like 24/7 Press Release can help you generate publicity easily.
  • Practice social media marketing. Share your content on various social media channels. Better yet, encourage your followers to do the same. Don’t forget to maintain regular engagement with your audience through those channels.
  • Create a Google My Business account. Doing so can boost the business’ local SEO, making it easier to compete with other similar businesses in the same area.
  • Purchase pay-per-click (PPC) ads. While this method requires a monetary investment, it’s highly effective for boosting your brand awareness. That’s because paid ads have an 11.3% clickthrough-rate (CTR) on Google.
  • Hold webinars. Similar to running a blog, launching a webinar may improve your credibility and visibility. It also helps build strong relationships with your audience.
  • Create a newsletter. After building your email list, send regular newsletters containing news about your agency and the industry in general. Email marketing encourages communication between the company and clients as well as generates leads.

8. Join Industry Trade Associations

Joining advertising trade associations allows you to continue learning about the industry, keeping up with the latest trends, and expanding your network.

Of course, there are different associations based on the country that you’re in. The best way to find the right association is by getting to know its interests and values first. Most of them usually have an online forum where users can connect and share their ideas.

If you still have doubts, here are the benefits of joining a trade association:

  • Get fresh ideas. Exchanging information with other businesses on different matters can give a new, insightful idea you couldn’t come up with on your own. This keeps you stay innovative and up-to-date.
  • Build confidence. By meeting new people and stepping out of your comfort zone, you get to develop your social skills and self-confidence, which you can use to communicate with new clients better.
  • Create long-lasting relationships. The more active you are in the association, the more new clients will trust and work with you. You can even create long-lasting partnerships with them.
  • Find answers. As a new business, you must have plenty of questions to ask regarding various advertising business aspects. You can do so if you network with other people within the industry.

9. Stay on Top of Your Game

Every industry, including advertising, is always fast-paced. If you’re not updated with the latest trends, you’ll be left behind by the competition and become irrelevant to the market. That said, you should always be ready to keep up with the industry’s pace.

Here are some ways you can stay on top of your game:

  • Subscribe to trade journals and magazines. Many professionals share their knowledge through these mediums. The more you read, the easier it will be to avoid making their past mistakes.
  • Follow blogs that cover the latest trends in digital media marketing and advertising. They can be a good source to keep track of the market if you’re not into formal journals.
  • Keep an eye on your competitors. Sometimes, other businesses can get ahead of the curve. Observe how they adapt and respond to new demands and trends.
  • Never stop networking. Besides keeping you in the loop, doing so allows you to open more doors of opportunities.

Characteristics of a Great Advertising Agency

As an advertising agency, your ultimate role is to raise clients’ brand awareness and solve their marketing problems. That said, there are certain characteristics that your ad agency needs to have to deliver optimal service.

Some of those characteristics are:

  • Passionate staff ‒ as your new business will need to have a lot of creative talents to succeed, ensure that you hire someone who has a passion for what the firm is trying to achieve.
  • Digital marketing expertise ‒ since most advertising these days is done online, it’s vital that the team strives to be an expert at digital marketing. It’s also worth learning graphic design skills and tools to enhance your services’ quality.
  • Data-driven marketers ‒ a good advertising agency should know its clients’ digital assets to craft an effective marketing campaign. Thus, you should be able to make data-driven decisions based on the available data.
  • Strong time management skills ‒ this is particularly important if you offer time-based services. Ensuring that all projects are done within the agreed time frame will solidify your agency’s credibility.
  • Strong online presence ‒ before marketing your clients’ products and services, you should first sell your brand. Use your SEO knowledge to boost your ad agency website’s ranking on SERPs and establish a strong social media presence.
  • Curiosity and willingness to learn – the advertising world is continuously changing and advancing. Therefore, your team should always explore new, better things to ensure that your clients have access to the best advertising tools and techniques.

Conclusion

Now you know how to start an agency and what it takes to develop a great one. Let’s recap on the steps:

  1. Conduct market research
  2. Define your target niche
  3. Write a business plan
  4. Register your business legally
  5. Setup a website
  6. Create and share valuable content
  7. Promote your business
  8. Join industry trade associations
  9. Stay on top of your game

All that’s left now is for you to start your own agency. Remember that the market continually changes, so ensure that your team is always striving for innovation. Good luck.