7 Steps to Start an Ad Agency
If you’ve ever wondered how to start an ad agency, you’ll be thrilled to know there’s never been a better time. While an advertising agency may conjure up images like that of Mad Men, the truth is it’s an exciting and lucrative entrepreneurial opportunity.
The advertising world is big business. Big companies need it. Small businesses thrive on it. Everywhere you look these days we are surrounded by advertisements and ad messages. The United States spends more money on advertising than anywhere else in the world — to the tune of $242 billion in 2019. In 2018, advertising agencies in the U.S generated a total of $53.7 billion in revenue.
And you can start an ad agency and own a slice of this massive pie.
What does an ad agency do?
Simply put, an ad agency is responsible for implementing the advertising for a business. This can be the traditional or digital form. Or your agency can focus solely on creative, media buying, or social media.
Your agency can specialize in certain types of clients as well. You can choose to work with start-ups, small businesses, non-profits, or specific brands or niches.
Basic responsibilities of an advertising agency might include the following:
- Running a client’s social media
- Updating a client’s website
- Creating campaigns
- Developing advertising strategies for clients
- Performing analysis of campaigns
- Developing new advertising campaigns based on analytics
- Administrative duties such as phone calls, emails, invoicing
What You Need to Start an Ad Agency
One of the best aspects of starting an ad agency is the fact it’s so easy to get started. We will talk more about specific steps but first, let’s look at what you need to get started.
Experience with ad campaigns. Although you can definitely sharpen your skills as you ramp up your business, it’s helpful to already have experience with advertising. Your clients will want to know what kind of experience you have and how you can help them.
A laptop and a reliable internet. In this digital age, it’s a no-brainer that you need a computer and reliable internet. You don’t have to go crazy with the most expensive, fastest machine around, but you do need a reliable way to work.
A dedicated office space. This doesn’t mean you have to rent the sweet, industrial loft in the hippest part of town. You can start your ad agency completely online, but you should treat it like a business because….it’s a business. Having a dedicated office space — whether in your home or rented — will allow you a space to remain focused.
Not to mention you’ll need a professional-looking backdrop for Zoom calls for meetings with clients.
A website. You might not have the slickest portfolio in the world, but a website can show off what you do have. Make it easy for potential clients to find your advertising agency. Don’t worry if it’s a low-cost version. You can upgrade your website as you add more clients.
A willingness to keep learning. With digital being such a big part of advertising, it’s important to stay up on the latest trends. Whether you become an expert in Facebook ads, Pinterest advertising, or TikTok for businesses, you’ll always need a thirst for knowledge.
How to Start an Ad Agency
So how do you go about actually starting an advertising agency? If you’ve got your laptop ready and your creative juices flowing, here’s how you get started.
1. Create a business plan
Like other businesses, if you choose to start an ad agency you need to first start with a solid business plan. Whether you focus on digital marketing or traditional advertising, an ad agency is a business first – and that calls for a business plan.
What should your business plan include? At the minimum, it should cover this information:
- Define your audience for the plan – Is this business plan for internal purposes, for investors and stakeholders, or customers? First, define and address your audience. From there you will craft your business plan to address the needs of your readers.
- Define your target market – What businesses will your advertising agency primarily work with?
- Define business goals with real numbers – Put your goals for your ad agency in your business plan. Your goals should be based on the analytics you’ve researched. These analytics can include:
- Industry trends and analysis
- Customer analysis
- Financial analysis
- SWOT analysis – Strengths, weaknesses, opportunities, and threats for your business and/or your biggest competitors
Once you have this information, you can build your business goals based on the information you’ve gathered.
- Define your advertising services – Clearly state what your ad agency will focus on. Whether it’s social media, digital display advertising, media buying, or something else.
- Define your own marketing plans – How will you obtain new clients? How much do you need to get your website started? Will you run your own Facebook ads geared towards specific demographics and business owners? These are all questions you can answer in your marketing plans.
- Remember, a business plan can be fluid. It’s ok if you need to update your business plan throughout the year or annually. As you achieve your goals, you can update with new ones!
If you want some more guidance, here is our full article on creating a business plan for digital marketing agencies.
2. Establish Your Niche
This was touched on in the business plan, but it’s an important step to emphasize when you start an ad agency. Because advertising is such a broad topic and there are so many different types of businesses, you need to choose a specific path for your own agency.
If you skip this step, you might feel “all over the place.” Establishing your niche helps you reign in your ideas and set the foundation for your advertising business.
First, spend time listing out your services. Not only does this help you communicate the information to your client, but it also gives you focus on training and education as you move forward. For instance, if you only want to work with ad campaigns for clients using social media platforms, then you know you need to stay current on Facebook, YouTube, or Pinterest, Google Ads, or whatever platforms you specialize in.
Second, what kind of clients do you want to work with? Do you prefer bigger companies or small mom and pops? Think about the industry you prefer. Remember, there are many, many businesses that need help with advertising, such as:
- Bloggers and influencers
- Restaurants, bar, wineries, and breweries
- Non-profit organizations
- Financial services
- Technology companies
- Salons and skincare
- Medical offices
- Interior design and services
- Real estate agents
These are only a few examples of industries you could work with. In other words, there are lots of businesses out there so it’s important for you to narrow down where you want to concentrate.
3. Create Your Website
What does a great website for an ad agency look like? It needs to include critical information on the very first page:
- Contact information
- Services offered
- What sets you apart from other agencies
But it could also include other pages, such as….
- Your portfolio
- Starting prices for your services
- Your background information
- Blog posts
Your website is not only a chance to talk about your services, but you can show your personality too. Don’t be afraid to get creative, especially if website design is part of your advertising services.
4. Market Your Services
In addition to your website, you need a way to attract potential clients. Unfortunately just putting a logo on a business card doesn’t mean the clients will flock to you. You have to attract them!
You can look for potential clients in several ways:
- Reach out to your current network. Especially if you’re a part of the industry your ad agency will focus on. Let everyone you know — from friends and family, to past colleagues — know you now have an agency and you’re ready to help.
- Use Facebook to generate leads. Facebook is a fantastic source for both direct and indirect leads. There are several ways to get noticed on Facebook including running an ad campaign, posting a blog, or running a contest.
- Get social. Beyond Facebook ads, there are so many platforms you can use to help spread the message that you are now open for business. Don’t forget Instagram, Pinterest, Twitter, or LinkedIn.
Now that you have your marketing plans in place, you can focus on setting up your finances and permits.
5. Get Your Finances In Order
You might not have any money in your account right away, but it’s important to set up your finances correctly from the beginning. Establishing a business banking account is important. Separating your business account from your personal one is not only the right way to run a business, but it can save you from a major headache later on down the road.
You can choose a bank you already have a relationship with, or simply use an online business bank to open up an account.
As your agency grows, you may need the help of an accountant or bookkeeper, or both. But in the beginning, a business bank account will be the first step to organizing your finances.
6. The Legal Requirements
Depending on where you live, you may need to file for a business license and/or a business permit. Don’t skip this step either, as boring as it may sound! LegalZoom is our favorite resource for all the legal topics related to starting a business.
Research what federal and state permits are needed and then you can determine your next steps. Once you get this done, you’ll be able to begin your business operations the right way.
If you’re curious about establishing your business as an LLC, this is where working with a professional is recommended. A CPA or tax attorney can get your business established and answer questions specific to your state.
7. Take the First Step!
Starting an ad agency – or starting a business in general – can be an overwhelming proposition for some. You may be worried about failing, not having enough clients, not knowing enough about finances, or a long list of other concerns. But truthfully, there’s one thing all businesses have in common:
All businesses begin by taking the first step.
Sure, there are lots of reasons why a business may not succeed. But there’s also plenty of opportunities for a business to thrive. Starting an ad agency is a great way to pursue your entrepreneurial dreams and help clients grow their own business. And it only takes that very first step and getting over the fear of the unknown.
Final Thoughts When You Start an Ad Agency
One of the most fascinating aspects of starting an ad agency is how you will constantly be learning new ideas and new ways of doing things. In order to keep up with the trends in advertising, you’ll need to learn the latest.
Taking courses such as the Facebook Side Hustle Course, can keep your skills sharp and help you get real results for your clients. We also highly recommend courses such as the Pinterest VA Course or ClickFunnels, or other courses like it.
If you do want to start an ad agency, taking the time to put together your business plans, while setting up your website, finances, and permits correctly, will ensure you start down the right path.