a business plan for an advertising agency

Advertising Agency Business Plan Template

Written by Dave Lavinsky

Advertising Agency Business Plan

You’ve come to the right place to create your Advertising Agency business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Advertising Agencies.

Below is a template to help you create each section of your Advertising Agency business plan.

Executive Summary

Business overview.

The Premium Advertising Agency is a startup advertising agency located in Cincinnati, Ohio. The company is founded by Patricia and Danielle Swanson, sisters who have amassed millions of dollars for their clients over the past ten years while working at a national chain advertising agency. Now that they’ve garnered a positive reputation of securing a high rate of visibility and profitability for their clients, they have decided to form their own company and they’ve invited former clients to join them. They plan on recruiting a highly-effective team of associates to help manage their agency at the highest peak of performance and stellar results for their clients.

The Premium Advertising Agency will provide a comprehensive array of advertising services to a wide variety of companies and entities that need assistance in launching or growing their businesses. The Premium Advertising Agency will be a one-stop shop for everything needed to propel any business to the next level of profitability and exposure to new client bases within their local region. Premium Advertising Agency will be the ultimate choice in Cincinnati for advertising campaigns and services, while also being a moderately-priced agency in the city.

Product Offering

The following are the services that Premium Advertising Agency will provide:

• Full-service digital media marketing
• Targeted traffic campaigns
• Market research
• Strategic traditional advertising campaigns
• Innovative and results-driven solutions
• Social media analytics
• Content creation (website, social media)
• Influencer marketing
• Paid advertising campaigns
• Day to day account management

Customer Focus

Premium Advertising Agency will target small-to-large-sized businesses within the greater Cincinnati region. There is no company that is too small or too large that cannot benefit from a comprehensive and effective advertising promotion or ongoing advertising program. Premium Advertising Agency will target executive board members at networking events. Premium advertising Agency will target diverse, women-owned and veteran-owned businesses.

Premium Advertising Agency will target marketing managers via local and national associations.

Management Team

Premium Advertising Agency will be co-owned and operated by Patricia and Danielle Swanson. They have recruited Jay Jameson to be the Accounts Manager and Lawrence Slater to be the Staff Accountant. In addition, they have recruited Janelle Meredith to be the Human Resources Manager.

Patricia Swanson is a graduate of the University of Ohio, where she earned a bachelor’s degree in Digital Marketing. Danielle Swanson is also a graduate of the University of Ohio, where her earned degree was in Business Management. Patricia and Danielle amassed millions of dollars for their clients over the past ten years while working at a national chain advertising agency. Now that they’ve garnered a positive reputation of securing a high rate of visibility and profitability for their clients, they have decided to form their own company and they’ve invited former clients to join them.

Success Factors

Premium Advertising Agency will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team at the Premium Advertising Agency
• Comprehensive menu of services, including social media and digital campaigns
• Traditional advertising campaigns with highly-productive and profitable results
• Innovative techniques that solve the difficult advertising issues of today’s consumer groups
• Select marketing and advertising campaigns for startup companies.
• Premium Advertising Agency offers the best pricing packages for full-service, ongoing account maintenance or one-time marketing campaigns. Their pricing structure is the most cost effective when compared to their competition.

Financial Highlights

Premium Advertising Agency is seeking $200,000 in debt financing to launch its Premium Advertising Agency. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for Premium Advertising Agency.

Company Overview

Who is premium advertising agency.

Premium Advertising Agency is a newly established, full-service advertising agency in Cincinnati, Ohio. Premium Advertising Agency will be the most reliable, effective, and results-driven choice for all businesses in Cincinnati and the surrounding communities. Premium Advertising Agency will provide a comprehensive menu of advertising and marketing services for any business, large or small, to utilize. Their full-service approach includes a comprehensive array of customized campaigns.

  Premium Advertising Agency will be able to actively manage every client account, with dedication to the unique needs of each client. The team of professionals are highly qualified and experienced in marketing and advertising across all traditional methods and digital platforms, as well. Premium Advertising Agency removes all the typical headaches and issues of advertising and marketing and ensures effective solutions are provided, while delivering the best customer service at the same time.

Premium Advertising Agency History

Since incorporation, Premium Advertising Agency has achieved the following milestones:

• Registered Premium Advertising Agency, LLC to transact business in the state of California.
• Has a contract in place for a 20,000 square foot office in a midtown building.
• Reached out to numerous contacts and former clients to spread the word and follow Premium Advertising Agency to their new location.
• Began recruiting a staff of fifteen account managers and six office personnel to work at Premium Advertising Agency.

Premium Advertising Agency Services

The following will be the services Premium Advertising Agency will provide:

Industry Analysis

The advertising agency industry is expected to grow over the next five years to over $500 billion. The growth will be driven by an increased dependency on social media marketing and various forms of digital campaigns. These will replace some traditional forms of advertising and marketing. The growth will also be driven by an increased number of customers who view the internet for a variety of purposes, where advertisements can be strategically placed to influence buying decisions. The growth will also be driven by the application of technological solutions and invitations to consumers not yet known. The growth will be driven by fewer brick-and-mortar stores and an increase in online purchases and marketing campaigns thus directed. Costs will likely be reduced as digital platforms and consumer invitations will become more plentiful and thus, less expensive to produce.

Customer Analysis

Demographic profile of target market.

Premium Advertising Agency will target the businesses in Cincinnati, Ohio. They will target marketing directors and executive personnel of companies. They will target startup companies that are diverse, woman-owned or veteran-owned. They will target associations and trade show events where personal meetings with executives can take place.

Customer Segmentation

Premium Advertising Agency will primarily target the following customer profiles:

• Businesses in the Cincinnati, Ohio region.
• Marketing directors
• C-suite executives and decision-makers
• Startup company executives of diverse, woman-owned, or veteran-owned businesses
• Marketing association executives and thought leaders

Competitive Analysis

Direct and indirect competitors.

Premium Advertising Agency will face competition from other companies with similar business profiles. A description of each competitor company is below.

Boone & Stratton Advertising

Boone & Stratton Advertising provides comprehensive marketing and advertising services within Cincinnati, Ohio and the surrounding communities. The company is over 100 years old and is entrenched with family members of both original partners, Madison Boone and Jeremy Stratton. The company has 100 advertising managers, who primarily focus on traditional advertising methods in print, telephone, and added-value inserts in publications. The company leases a multi-story building in the downtown area of Cincinnati and is known for the “team spirit” of the advertising account managers and rigorous standards of professionalism required of each by the executive board members.

Although Boone & Stratton Advertising is well-entrenched in the Cincinnati business landscape, the company does not engage in digital marketing or social media outreach campaigns. This leaves the opening for newer, innovative companies to enter their space and engage with their customers, particularly if companies are targeting younger demographic audiences.

SportsSupport Ad Agency

The SportsSupport Ad Agency is a company that focuses on the sports industry throughout the U.S. The Cincinnati location is one of 25 within this national chain advertising agency and the focus for this location is on regional sports clients. The advertising agency has highly-segmented sports apparel clients directed toward outdoor winter activities, as well as spring, summer and fall activities that include boats, fishing and accessory clients for those targeted audience segments. SportsSupport Ad Agency uses social media marketing via popular channels and uses certain channels to conduct surveys or to test product ideas. Most of the campaigns are directed toward the executives within the industries related to sports and their ad budgets for the yearly track of traditional advertisements.

XYZ Digital Promotions

XYZ Digital Promotions is a social media marketing agency located in Cincinnati, Ohio. The company targets the brand managers who oversee products that appeal to younger demographic customers. XYZ Digital Promotions claims to effectively enter and invite that target market better than any other advertising agency. XYZ Digital Promotions targets and partners with executives of beer, music festivals, streetwear, and hip hop music labels to bring the message to consumers via structured and direct digital campaigns.

XYZ Digital Promotions was founded in 2020 during the global pandemic. The brand messages offered to consumers were on-point and spoke to their “human condition,” as well as pointing to a variety of products to solve or provide solace for those hard conditions. Campaigns include new music cuts and contain an array of references to popular stars of the year, with memes and graphic art elements to most campaigns. XYZ Digital Promotions is a highly-segmented, successful advertising and marketing company directed to the consumer aged 17-25.

Competitive Advantage

Premium Advertising Agency will be able to offer the following advantages over their competition:

• Innovative techniques that solve the advertising issues of today’s consumer groups

Marketing Plan

Brand & value proposition.

Premium Advertising Agency will offer the unique value proposition to its clientele:

• Highly-qualified team of skilled employees who are able to provide a comprehensive array of social media campaigns and traditional advertising techniques to ensure successful growth for their clients.

Promotions Strategy

The promotions strategy for Premium Advertising Agency is as follows:

Word of Mouth/Referrals

Premium Advertising Agency has built up an extensive list of contacts and clients over the years by providing exceptional service and expertise to their account clients. Premium Advertising Agency invites former and current clients to follow them to the new company and help spread the word of the Premium Advertising Agency.

Professional Associations and Networking

Premium Advertising Agency will embark on a thorough campaign to network extensively through regional association and business groups. They will also target marketing directors and executive personnel within those same business groups. They will target startup companies that are diverse, woman-owned or veteran-owned.

Website/SEO Marketing

Premium Advertising Agency will fully utilize their website. The website will be well organized, informative, and list all the services that Premium Advertising Agency provides. The website will also list their contact information. Agency brand managers, and list their top-tier brand alliances. The Premium Advertising Agency’s website presence will engage SEO marketing tactics so that anytime someone types in the Google or Bing search engine “advertising agency” or “marketing company near me”, Premium Advertising Agency will be listed at the top of the search results.

The pricing of Premium Advertising Agency will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for Premium Advertising Agency. Operation Functions:

• Patricia Swanson will be the President and co-owner of the company. Danielle Swanson will be the Vice President and co-owner of the company. They will oversee all staff and manage client relations. Danielle and Patricia have spent the past year recruiting the following staff:
• Jay Jameson, a former associate at their prior employer, will take on the role of the Accounts Manager, directing and assisting Account Representatives.
• Janelle Meredith, a former associate, will be the Administrative Manager, and will manage the office administration, client files, and provide human resources training.
• Lawrence Slater will be the Staff Accountant, providing all client accounting, tax payments, and monthly financial reporting.

Milestones:

Premium Advertising Agency will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease office space
• 5/15/202X – Finalize personnel and staff employment contracts for Premium Advertising Agency
• 6/1/202X – Finalize contracts for Premium Advertising Agency clients
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into Premium Advertising Agency office
• 7/1/202X – Premium Advertising Agency opens its office for business

Jay Jameson, a former associate at their prior employer, will take on the role of the Accounts Manager, directing and assisting Account Representatives. Janelle Meredith, a former associate, will be the Administrative Manager, and will manage the office administration, client files, and provide human resources training. Lawrence Slater will be the Staff Accountant, providing all client accounting, tax payments, and monthly financial reporting.

Financial Plan

Key revenue & costs.

The revenue drivers for Premium Advertising Agency are the fees they will charge to their clients for their advertising and marketing services.

The cost drivers will be the overhead costs required in order to staff Premium Advertising Agency. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

Premium Advertising Agency is seeking $200,000 in debt financing to launch its advertising agency. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Clients Per Month: 35
• Average Revenue per Month: $175,000
• Office Lease per Year: $100,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Advertising Agency Business Plan FAQs

What is an advertising agency business plan.

An advertising agency business plan is a plan to start and/or grow your advertising agency business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Advertising Agency business plan using our Advertising Agency Business Plan Template here .

What are the Main Types of Advertising Agency Businesses? 

There are a number of different kinds of advertising agency businesses , some examples include: Full-Service Advertising Agency, Digital Advertising Agency, and Traditional Advertising Agency.

How Do You Get Funding for Your Advertising Agency Business Plan?

Advertising Agency businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start an Advertising Agency Business?

Starting an advertising agency business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop An Advertising Agency Business Plan - The first step in starting a business is to create a detailed advertising agency business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your advertising agency business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your advertising agency business is in compliance with local laws.

3. Register Your Advertising Agency Business - Once you have chosen a legal structure, the next step is to register your advertising agency business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your advertising agency business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Advertising Agency Equipment & Supplies - In order to start your advertising agency business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your advertising agency business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful advertising agency business:

• How to Start an Advertising Agency

Advertising Agency Business Plan Template

Written by Dave Lavinsky

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their advertising agencies. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a advertising agency business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is an Advertising Agency Business Plan?

A business plan provides a snapshot of your advertising agency business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for Your Advertising Agency

If you’re looking to start a advertising agency, or grow your existing ad agency business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your advertising agency business in order to improve your chances of success. Your advertising agency business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Advertising agencies

With regards to funding, the main sources of funding for a advertising agency business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the advertising agency will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for social media marketing businesses.

Finish Your Business Plan Today!

How to write a business plan for an ad agency.

If you want to start an advertising agency business or expand your current one, you need a business plan. Below are links to each section of your advertising agency business plan template:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of advertising agency you are operating and the status. For example, are you a startup, do you have an advertising agency that you would like to grow, or are you operating a chain of advertising agencies?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the advertising industry. Discuss the type of advertising agency you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of advertising agency you are operating and your business model.

For example, you might operate one of the following types of advertising agencies:

• Full-Service Advertising Agency : this type of ad agency performs a variety of client services including digital, traditional, social media, radio and print advertising campaigns.
• Digital Advertising Agency: this type of ad agency focuses on digital marketing and advertising; social media marketing, email marketing, content marketing, web design, and SEO.
• Traditional Advertising Agency: this type of ad agency specializes in traditional marketing and advertising campaigns in ways such as radio and television commercials, billboards, magazines, and newspapers advertisements.

In addition to explaining the type of advertising agency business you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, revenue generated from advertising campaigns, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the advertising agency industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the advertising agency industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your creative agency business plan:

• How big is the advertising agency industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your advertising agency business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your advertising agency business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: start-up companies, large corporations, small businesses and non-profit organizations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of ad agency business you operate. Clearly, a well-established business looking to expand operations would respond to different marketing promotions than a small start-up, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most advertising agencies primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other advertising agencies.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes marketing agencies, graphic designers and freelancers.

With regards to direct competition, you want to describe the other advertising agencies with which you compete. Most likely, your direct competitors will be house flippers located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What types of advertising do they specialize in?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide a wider variety of advertising services?
• Will you provide more team support?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a advertising agency business plan, your marketing plan should include the following:

Product : In the product section, you should reiterate the type of advertising agency company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to advertising services, will you include public relations and/or social media management services as well?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your advertising agency company. Document your location and mention how the location will impact your success. For example, is your advertising agency business located in a busy retail district, a business district, a stand-alone building, etc. Discuss how your location might be the ideal location for your customers.

Promotions : The final part of your advertising agency marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your advertising agency business, including marketing your services, obtaining new clients and launching new services.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to have X number marketing campaigns completed, or when you hope to reach $X in revenue. It could also be when you expect to expand your business to a new city.  

Management Team

To demonstrate your advertising agency business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in managing advertising agencies. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in overseeing advertising campaigns or successfully running their own advertising agency.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you obtain two new clients per month or five? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your advertising agency business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a advertising agency business:

• Location build-out including design fees, construction, etc.
• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or sample advertising campaigns.  

Putting together a business plan for your advertising agency is a worthwhile endeavor. If you follow the template above, by the time you are done, you will have an expert ad agency business plan; download it to PDF to show banks and investors. You will really understand the advertising agency industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful advertising agency business.  

Advertising Agency Business Plan FAQs

What is the easiest way to complete my advertising agency business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Advertising Agency Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of advertising agency you are operating and the status; for example, are you a startup, do you have an advertising agency that you would like to grow, or are you operating a chain of advertising agencies?

Don’t you wish there was a faster, easier way to finish your Advertising Agency business plan?

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Reading Time : 24 Min

Business plan 101.

Starting an advertising agency is an exciting venture, but success requires careful planning. A comprehensive business plan is the foundation of your agency’s growth and profitability. In this blog post, we will guide you through the process of creating a well-structured advertising agency business plan that aligns with your goals. As an expert startup consultant service provider, Stellar Business Plans is here to support you in crafting a winning strategy that stands out in the competitive advertising industry.

The executive summary is the gateway to your business plan, offering a concise overview of your agency’s key elements. This section is your chance to make a strong first impression and capture the reader’s attention. While providing an elevator pitch, emphasize the unique aspects of your agency that set it apart from the competition. Include your mission and vision statements, key services, target market, and the most significant financial projections. Keep it brief, engaging, and compelling to entice investors, partners, and potential clients to read further.

Stellar Business Tips:

• Keep the executive summary clear and concise, focusing on the unique value your agency brings to the market.
• Highlight your agency’s key differentiators, such as specialized expertise, innovative approaches, or a client-centric approach.

Example: “XYZ Advertising Agency offers data-driven solutions that deliver up to 30% higher conversion rates for our clients, thanks to our cutting-edge AI-powered ad targeting algorithms.”

The company overview provides essential background information about your advertising agency. Detail the founding story, explaining the inspiration behind your agency and the driving force that led to its establishment. Introduce the key stakeholders, founders, and leadership team, highlighting their expertise and experience in the advertising industry. Clearly state your agency’s mission, vision, and values to showcase your commitment to delivering exceptional services. Additionally, provide insights into your agency’s current status, such as the number of employees, locations, and awards or recognitions received.

• Personalize the company overview by sharing anecdotes or personal experiences that motivated you to start the agency.
• Emphasize your team’s collective strengths and past successes to build trust and credibility.

Example: “Our agency, Stellar Ads, was founded by marketing enthusiasts with a shared passion for creative storytelling. Our team members collectively bring over 50 years of experience in successful advertising campaigns for Fortune 500 companies.”

A thorough market analysis is crucial to understanding the advertising industry’s current state and future trends. Conduct extensive research on market growth rates, industry size, and key drivers shaping the advertising landscape. Identify emerging technologies and digital platforms that are disrupting traditional advertising methods. Gather data on consumer behavior, preferences, and engagement with different advertising channels. Use industry reports, market research, and expert insights to back up your analysis and projections.

• Utilize reputable sources and industry reports for market data and statistics.
• Focus on current and future trends that will impact the advertising industry, such as the rise of mobile advertising or the growth of influencer marketing.

Example: “According to the Global Advertising Market report by Grand View Research, the global advertising market is projected to reach $654.55 billion by 2028, with digital advertising accounting for over 50% of total ad spending.”

Defining your target market is critical for tailoring your advertising strategies to meet specific needs. Identify the primary industries or sectors you want to serve and the demographics of your ideal clients. Create buyer personas to better understand the pain points, challenges, and aspirations of your target audience. Conduct surveys or interviews with potential clients to gain valuable insights into their expectations from an advertising agency. Analyze competitors’ clientele to identify gaps and opportunities for your agency.

• Consider conducting focus groups or beta testing campaigns to gather feedback from potential clients before launch.
• Use social listening tools to monitor online conversations and understand customer sentiment regarding advertising trends and campaigns.

Example: “Our target market includes tech startups and e-commerce businesses in the B2C segment, aged 25-35, who seek innovative and visually captivating ad campaigns to stand out in a competitive market.”

A comprehensive competitor analysis helps you position your agency strategically in the market. Identify direct and indirect competitors, evaluating their strengths, weaknesses, and market share. Study their marketing and sales strategies, service offerings, pricing models, and client retention practices. Identify areas where your agency can excel and differentiate itself from competitors. Highlight your competitive advantages and how you plan to capture market share from established players.

• Use a SWOT analysis to identify your agency’s strengths, weaknesses, opportunities, and threats in comparison to competitors.
• Conduct regular competitor monitoring to stay updated on their new offerings and strategies.

Example: “Competitor A excels in social media marketing, but our agency’s strength lies in data-driven audience targeting, providing clients with a higher return on investment (ROI) through efficient ad spend.”

Detail the breadth and depth of your advertising services, showcasing your expertise in various advertising channels. Describe each service in-depth, including the strategies, tools, and technologies used to deliver exceptional results to clients. Provide case studies and success stories of previous campaigns that demonstrate your agency’s capabilities. Present testimonials or feedback from satisfied clients to build trust and credibility with potential clients.

• Highlight case studies where your agency’s creativity and problem-solving skills resulted in successful campaigns.
• Mention your agency’s adaptability to new advertising platforms and technologies to demonstrate your readiness for future challenges.

Example: “Our comprehensive services encompass digital advertising, content marketing, brand storytelling, and influencer partnerships. In a recent campaign for Client B, we increased brand awareness by 50% through a compelling social media storytelling series.”

A well-crafted marketing and sales strategy is essential for attracting clients and driving business growth. Outline your digital marketing efforts, content marketing, social media presence, and thought leadership initiatives. Leverage search engine optimization (SEO) to increase your agency’s visibility and organic reach. Showcase your agency’s past successes to demonstrate your track record of delivering results. Additionally, develop a sales playbook that outlines your sales team’s strategies, tactics, and target metrics for lead generation and conversion.

• Showcase your agency’s expertise through thought leadership content, such as blog posts, webinars, or whitepapers.
• Leverage client testimonials and case studies in your marketing materials to establish credibility and trust.

Example: “Our marketing strategy includes targeted content marketing and thought leadership webinars that showcase our agency’s expertise in the advertising industry. We consistently engage with our audience on social media platforms to build lasting relationships.”

The operational plan outlines how your agency will function on a day-to-day basis to deliver outstanding services. Define the organizational structure and hierarchy, including the roles and responsibilities of each team member. Emphasize collaboration and cross-functional communication to ensure seamless workflow. Detail the workflow for creating and executing advertising campaigns, from initial client briefings to campaign launch and reporting.

• Emphasize the importance of open communication and collaboration between creative and account teams to deliver cohesive campaigns.
• Implement a project management system to streamline workflow and ensure timely delivery of campaigns.

Example: “Our agency follows an agile project management approach, allowing creative teams to collaborate with account managers and clients in real-time, resulting in efficient campaign execution and streamlined processes.”

An advertising agency’s success heavily relies on its team of creative professionals, marketers, and account managers. Detail your talent acquisition and retention strategies, emphasizing a culture that fosters creativity, innovation, and growth. Offer competitive compensation packages, professional development opportunities, and incentives to retain top talent. Outline your recruitment process, employee training programs, and mentoring initiatives to nurture and upskill your team.

• Offer flexible work arrangements and a positive work culture to attract and retain diverse talent.
• Encourage continuous learning and skill development to keep your team updated on the latest advertising trends and technologies.

Example: “Our agency provides ongoing training and development programs to nurture our team’s creative and strategic skills. We foster a culture of open communication and creative freedom, ensuring every team member feels valued and motivated.”

Financial projections are essential for demonstrating the agency’s viability and potential return on investment. Provide detailed revenue projections based on your target market and service offerings. Factor in pricing strategies, growth rates, and market share estimations. Include expense projections, such as salaries, marketing, technology, rent, and overhead costs. Prepare income statements, balance sheets, and cash flow forecasts for multiple years to demonstrate long-term sustainability.

• Use conservative estimates in your financial projections to account for unexpected challenges or market fluctuations.
• Include a sensitivity analysis to understand how changes in key variables may impact your agency’s financial performance.

Example: “Our financial projections indicate a 20% revenue growth in the first year, driven by increased demand for digital advertising services. We anticipate a healthy profit margin of 15%, with prudent cost management.”

A well-managed budget ensures efficient resource allocation and maximizes the return on investments. Develop a detailed budget for various operational and marketing expenses, ensuring they align with your business objectives. Consider potential cost-saving measures and opportunities for strategic investments to fuel growth. Regularly review and adjust your budget based on performance and changing market dynamics.

• Keep a contingency budget for unforeseen circumstances, such as sudden campaign changes or market disruptions.
• Allocate resources based on data and performance metrics to optimize ROI.

Example: “Our budget allocates 30% of total funds for marketing and lead generation efforts, as we aim to expand our client base through targeted campaigns and strategic partnerships.”

Attracting and retaining clients is the lifeblood of an advertising agency. Develop a comprehensive client acquisition plan, including lead generation strategies, outreach initiatives, and networking efforts. Implement a structured client onboarding process to ensure clear communication, expectations, and deliverables. Focus on building long-term relationships and delivering outstanding results to retain clients and encourage referrals.

• Offer attractive referral programs or incentives for clients who refer new business to your agency.
• Establish a client feedback system to continuously improve your services based on client preferences and satisfaction.

Example: “Our agency maintains strong relationships with our clients by providing regular performance reports and conducting satisfaction surveys. We incentivize client referrals with exclusive access to upcoming beta campaigns.”

Advertising is rapidly evolving, driven by technological advancements and digital transformation. Embrace technology to enhance your advertising campaigns and improve data analytics. Adopt advanced tools and platforms for audience targeting, retargeting, and campaign optimization. Stay abreast of emerging technologies and trends to stay competitive and offer innovative solutions to clients.

• Invest in analytics tools to gather data on campaign performance and audience behavior, enabling data-driven decision-making.
• Keep your team updated on the latest advertising technologies through training and workshops.

Example: “Our agency harnesses AI-driven analytics tools to precisely target audiences and optimize campaigns in real-time. Our technology investments allow us to deliver more personalized ad experiences, resulting in higher engagement rates.”

The advertising industry comes with its fair share of risks, from data breaches to campaign performance challenges. Identify potential risks and develop mitigation strategies to minimize their impact on your agency’s operations. Ensure your agency complies with advertising laws, data privacy regulations, and industry standards. Educate your team on ethical advertising practices and transparency in client communications.

• Establish a crisis management plan to address potential reputation-damaging scenarios swiftly and effectively.
• Regularly review and update your agency’s legal compliance policies to stay aligned with changing regulations.

Example: “Our agency employs data encryption protocols and adheres to GDPR guidelines to protect client data and ensure utmost privacy. We have a crisis management team in place to handle any unforeseen challenges.”

To sustain long-term success, consider opportunities for geographic expansion or niche market penetration. Evaluate the feasibility of offering additional services, such as branding, public relations, or content marketing. Explore strategic partnerships or collaborations with complementary agencies to broaden your service offerings and reach new client segments. Assess potential mergers or acquisitions to accelerate growth and expand your agency’s market presence.

• Consider forming partnerships with local businesses or startups to enter new markets and gain regional expertise.
• Leverage industry events and conferences to network and explore potential growth opportunities.

Example: “We plan to expand our agency’s reach by partnering with a boutique PR firm to offer integrated branding and communication solutions for our clients, providing a one-stop-shop experience.”

While it may seem premature, having a well-thought-out exit strategy demonstrates your agency’s long-term planning and vision. Outline your objectives for a potential exit, whether it involves selling the agency, merging with another firm, or transitioning ownership to key team members. Develop a succession plan to ensure a smooth transfer of leadership and continuity for your clients.

• Consult with financial advisors or industry experts to determine the most suitable exit strategy for your agency’s long-term goals.
• Ensure all legal agreements and contracts allow for a seamless transfer of ownership or dissolution.

Example: “Our agency’s exit strategy involves grooming internal talent for future leadership positions and maintaining a strong client-centric focus to ensure client retention in the event of an ownership transition.”

The advertising industry is dynamic and competitive, demanding a well-crafted business plan to navigate its complexities successfully. By following this comprehensive guide and creating a detailed advertising agency business plan, you’ll position your agency for growth, profitability, and long-term success. At Stellar Business Plans, we understand the intricacies of developing effective business strategies. Our team of expert consultants is here to guide you through every step, from market analysis to financial projections, to make your advertising agency thrive. Let’s embark on this exciting journey together, making your mark in the advertising world and achieving extraordinary results for your clients.

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Updated On : September 1, 2023

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How to Start an Advertising Agency in (2024): A Step By Step Guide

Free Advertising Agency Business Plan Template

• Vinay Kevadia
• January 3, 2024

Ever dreamt of turning your creative spark into a thriving business where your ideas not only catch attention but bring success to businesses?

Yes, the world of advertisements, the world of social media, and engaging videos grab the attention of customers from across the country too. The industry whose revenue was more than $65 billion in 2022.

If the idea of starting your own advertising business intrigues you, this guide is your pathway on how to start an advertising agency . Ready to explore and bring your vision to life? Let’s get started!

A Complete Guide to Starting an Advertising Agency

• Choose the name of your advertising agency
• Mention the type of agency you want to open
• Develop a business plan
• Choose the location
• Register your business
• Choose your pricing model
• Open a business bank account & get a credit card
• Get all required business permits and licenses
• Acquire business insurance
• Buy or lease equipment for your agency
• Get funding for your advertising agency
• Plan your marketing and advertising strategy
• Develop a team

1. Choose the name of your advertising agency

A business name is meant to reflect the vision and values of your business. Therefore, keep it creative yet simple so that people can easily remember it.

Consider your target audience, the USPs of your ad agency, and future services you might provide, before deciding on any name. As it should be in sync with all of the above.

Once you have your name, you should check the availability of the name for social media profiles and websites before getting too attached to it.

Also, check if it’s trademarked from the website of the US Patent and Trademark Office .

2. Mention the type of agency you want to open

There are various types of advertising agencies mention which one of the types you will open. For example, your business type might be one of the below:

Digital Ad Agency

These types of agencies focus on digital marketing services which include social media marketing, SEO, digital advertising, and redesigning your website.

Creative Advertising Agency

Creative agencies specialize in designing slogans, advertisements, compelling creative content, and other such copies.

Content Marketing Agencies

These type of firms concentrates only on producing content pieces like blog posts, videos, podcasts, articles, etc to advertise a product or service.

In-house Agencies

They operate within a company and manage all the marketing needs of the company.

Other than the above main categorization, there are various other types of agencies too, but decide which one you will launch after knowing your target audience.

3. Develop a business plan

Starting an advertising agency is not like eating a piece of cake easily. It requires careful planning and constant guidance to be successful. To accomplish this; an advertising agency business plan can be your roadmap.

But do you wonder what a business plan includes? Here are some elements:

• Executive summary
• Business description
• Market analysis
• SWOT analysis
• Services offered
• Business structure
• Sales and marketing strategy
• Financial projections
• Risk management plan
• Exit strategy

To write all these sections with precision requires long hours, attention to detail, and constant effort.

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4. Choose the location

An attractive location is essential to meeting clients and persuading them about why they should hire you. Plus, it provides a brand image for your business.

Apart from that, certain places are well-known for having a strong presence in the advertising and marketing industry. These areas have a lot of agencies & media outlets. Being in such a hub can offer your own agency chances to connect with others.

You can even choose to work from your home’s basement or somewhere else where you meet your clients online and hire freelancers to work for you. This is a cost-effective way of starting your agency.

5. Register your business

After knowing the name & location of the company, it is now time to indulge yourself in the legal requirements and documentation for your own advertising agency.

Here is how you register your agency:

Select the business structure

First things first, before registering you need to decide on the business structure of your advertising agency. A business’s liability, taxes, filing fees, maintenance, and other regulations depend on the business structure you choose.

There are various business structures for advertising agencies, they are:

• Sole proprietorship
• General partnership
• Limited liability company
• Limited partnership
• Corporation

Go for a registered agent

All LLCs and corporations are required to appoint a registered agent. A registered statutory agent accepts and promptly responds to legal mail and official communication on behalf of your agency.

The registered agent can be a person or an agency with a physical address in the US state so that they can receive legal documents on your behalf.

Register with the state & obtain business EIN

Register your advertising agency with your state’s Secretary’s office. The process and requirements vary by state. You may need to file articles of incorporation or organization for LLCs or corporations.

Apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This is a unique identifier for your business and is needed for tax purposes.

Apply for tax registration

Register with the appropriate tax agencies for federal and state taxes. This includes sales tax, income tax, and employment taxes if you have employees.

Business registration requirements differ state by state which is why having a registered agent by your side will help you get through the process without any hustle.

6. Choose your pricing model

Before setting up the prices, identify all the costs of your advertising agency. Then understand your value proposition and what unique you will provide to your clients to finalize your pricing strategy.

Generally, advertising agencies make money by brainstorming and developing new ideas for various other companies including advertising campaigns, content pieces, and social media ad campaigns.

The pricing model for your ad agency depends on the type of services you provide. You need to decide whether you will charge per hour, per project, or for collective service hours.

7. Open a business bank account & get a credit card

Opening a bank account under the name of an advertising agency is necessary for the personal asset protection of the owners.

Therefore, in however much hurry you are to open your business the next day, do not forget to set up a different bank account.

Open a bank account

A business bank account keeps your personal and business expenses separate while making the accounting and business tax filing process much easier.

You will need an EIN, some personal documents, and business licenses to open a business bank account.

Get a business credit card

A business credit card can help you create a strong credit history for your business which ultimately supports you in getting small business loans or grants.

Keep in mind a credit card is a must-have for a business’s financial stability.

8. Get all required permits and licenses

You can not one day randomly start your advertising agency, you will need licenses and permits, of course, to get started. Here are some of the licenses and permits to have for advertising agencies:

Business License

Obtain a general business license from the local city or county government. Then check with local authorities about other requirements.

State-specific business permits

Some states may have additional requirements or permits for advertising businesses. Check with your state’s business regulatory agency to ensure compliance.

Home occupation permit

If you are going to start your online advertising agency from your home, then you have to obtain this home occupation permit.

Professional licenses

You will need a professional license depending on the nature of your advertising services. Check with relevant professional associations or licensing boards and apply accordingly.

9. Acquire business insurance

Business insurance offers protection against financial losses, helps you manage risks, and focuses on growing your business.

Before getting insurance for your business, you need to understand the specific risks for your business such as property damage, liability claims, etc.

Considering the risks you might face; choose the type of business insurance wisely.

10. Buy or lease equipment for your agency

For providing advertising agency services, one might generally need a good internet connection, laptops, cameras, etc for minimal operations.

If you are just starting a venture, then leasing equipment is a better option. This approach helps in cost reduction and provides you with more flexibility.

11. Get funding for your advertising agency

In the advertising agency business plan above, you might have thought about the funding options. Now, here is the time when you actually go out for funding.

Various funding options for funding for advertising agencies are:

• Bootstrapping
• Family and friends
• Credit card financing
• Crowdfunding

If you are going to go for third-party funding options, then make sure your business plan says everything about your company in an engaging way.

12. Plan your marketing and advertising strategy

For a successful advertising agency, you need proven marketing strategies. Major advertising agencies fail to plan their marketing strategies before starting their businesses.

Here is a tip: start making a buzz about your agency even before the start on all social media platforms, and you will at least get brand recognition.

Being an advertising agency, you need to make sure to keep your marketing strategy top-notch to attract clients and get the desired reach.

You can join an advertising association, do social media & content marketing, and showcase all your USPs.

13. Build a team

One of the final & important steps for starting an advertising agency is building a team. Find certain people for your team that have the same enthusiasm & passion about the agency as you are.

Your team might include, content writers, graphic designers, creative managers, etc.

By now you must have a pretty clear idea about starting an advertising agency. So let’s take a first step and translate your business idea into an actionable business plan.

Writing your plan will ensure no oversight in business planning and you get a direction for your business. You can use this advertising agency business plan sample to make your business planning process easier.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks, AI-assistance, and automatic financials make it easy.

Frequently Asked Questions

Can i start an advertising agency from home.

Absolutely. You can start your new advertising business from home with minimum investment. You can hire freelancers and work in co-ordination on all the projects.

Do ad agencies make money?

Usually, ad agencies take their cut from the total marketing spend of their clients. It is around 20-15%. So, of course, marketing agencies earn and they earn good once they start retaining clients.

Is it hard to run a marketing agency?

Like any business, at the start, it is going to be difficult to convert interested people into clients. It will need strong communication, great leadership, and unique offerings. But once you start getting clients and delivering results, then it will skyrocket.

What are some common challenges faced by a new business in the advertising industry?

Some of the few challenges a new business faces while starting an ad agency are:

• Budget constraints
• High competition
• Scalability
• Relying on only one marketing channel
• Creative differentiation
• Technology disruption
• Talent retention

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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Advertising Agency

Back to All Business Ideas

How to Start an Advertising Agency

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on May 25, 2022 Updated on June 5, 2024

Investment range

$2,550 - $5,800

Revenue potential

$60,000 - $250,000 p.a.

Time to build

0 – 3 months

Profit potential

$54,000 - $100,000 p.a.

Industry trend

Advertising is a part of our daily lives — on TV, social media, and just driving down the road. The global ad industry is massive, projected to expand 30% by 2025 to reach $455 billion. If you have experience in marketing or advertising, now is a great time to start your own agency and grab a piece of that pie. You could even run your agency from home.

But before you start pounding out good copy, you’ll need to learn how to launch a business. Fortunately, this step-by-step guide has all the information you need to put you on the road to advertising success.

Step by Step Business values real-life experience above all. Through our Entrepreneur Spotlight Series , we interview business leaders from diverse industries, providing readers with firsthand insights.

If you’re starting an advertising agency, dive into this interview with Jeremy Heilpern to gain invaluable insights into navigating the industry with success.

Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.

Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services .

Step 1: Decide if the Business Is Right for You

Pros and cons.

Starting an advertising agency has pros and cons to consider before deciding if it’s right for you.

• Provide Value – Help businesses grow, driving economic growth
• Low Startup Costs – Little investment required
• Flexibility – Run the business from home, set your own hours
• Get Creative – Put your creative skills to work
• Crowded Market – Advertising is a highly competitive industry
• High Stress – Coming with strong ad campaigns isn’t easy

Advertising industry trends

Industry size and growth.

• Industry size and past growth – The global advertising agency industry was worth $348.4 billion in 2021 after expanding nearly 10% the previous year.(( https://www.researchandmarkets.com/reports/5323063/advertising-agencies-global-market-report-2021 ))
• Growth forecast – The global advertising industry is projected to grow 30% by 2025. 
• Number of businesses – In 2021, 85,888 advertising agencies were operating in the US.(( https://www.researchandmarkets.com/reports/5323063/advertising-agencies-global-market-report-2021 )) 
• Number of people employed – In 2021, the US advertising agency industry employed 250,373 people.(( https://www.ibisworld.com/united-states/market-research-reports/advertising-agencies-industry/ )) 

Trends and challenges

Trends in advertising include:

• Digital advertising is where most companies spend their money, with over 64% of advertising budgets allocated to online channels.
• Video ads represent a large part of digital spending, with the trend moving to shorter and shorter videos.

Challenges in the advertising agency industry include:

• Tightening privacy regulations limit advertisers’ access to information about target audiences, making it more challenging for ad agencies to create targeted campaigns.
• As the digital world grows, it becomes more and more difficult for digital ad campaigns to make an impact.

Demand hotspots

• Most popular states – The most popular states for advertising managers are Washington, Maine, and California . (( https://www.zippia.com/marketing-advertising-manager-jobs/best-states/#missouri ))
• Least popular states – The least popular states for advertising managers are Oklahoma, Missouri, and Mississippi.

What kind of people work in advertising agencies?

• Gender –   54.7% of advertising managers are female, while 45.3% are male.(( https://www.zippia.com/marketing-advertising-manager-jobs/demographics/ ))
• Average level of education – The average advertising manager has a bachelor’s degree.
• Average age -The average advertising manager in the US is 39.4 years old.

How much does it cost to start an advertising agency business?

Startup costs for an advertising agency range from $2,500 to $5,800. Costs include a computer, a website, and design software for presentations. If you do not have an advertising background, you can get an online advertising degree from any number of colleges and universities.

How much can you earn from an advertising agency business?

Advertising agencies charge between $150 to $250 per hour of work on a campaign. Usually, the agency will estimate the hours required for a project and give a flat price. When you’re working by yourself, your profit margin will be high, around 90%. 

In your first year or two, you could work from home and do twelve $5,000 campaigns a year, bringing in $60,000 in annual revenue. This would mean $54,000 in profit, assuming that 90% margin. As your business grows, sales could climb to 50 campaigns a year. At this stage, you’d rent a commercial space and hire staff, reducing your profit margin to around 40%. With annual revenue of $250,000, you’d make a handsome profit of $100,000.

What barriers to entry are there?

There are a few barriers to entry for an advertising agency. Your biggest challenges will be:

• The required advertising background or education
• Breaking into a highly competitive advertising market.

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Step 2: hone your idea.

Now that you know what’s involved in starting an advertising agency, it’s a good idea to hone your concept in preparation to enter a competitive market.

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

What? Determine your services

Your services will be to design, present, and implement advertising campaigns for companies. Here are the most common services:

• Market Research: This involves gathering and analyzing data to understand the target audience, market trends, and consumer preferences, which is crucial for crafting effective campaigns.
• Brand Strategy: Developing a comprehensive plan that defines brand identity , positioning, messaging, and voice, helping businesses establish a strong and consistent brand presence.
• Creative Development: This service encompasses the creation of visual and textual content for advertising campaigns, including graphics, videos, and written content that aligns with the brand’s message.
• Media Planning and Buying: Determining the most effective media channels to distribute the advertising content (such as television, radio, online platforms) and negotiating and purchasing advertisement space or time.
• Digital Marketing : Involves online marketing efforts, including SEO (Search Engine Optimization), PPC (Pay-Per-Click advertising), email marketing, and content marketing to boost online presence and engagement.
• Social Media Management : Managing a brand’s presence on social media platforms, including content creation, community engagement, and monitoring social media trends and analytics.
• Public Relations : Enhancing and maintaining the public image of a client through media releases, public statements, and event organization, as well as managing crisis communication.
• Event Marketing and Sponsorships: Organizing and promoting events to engage with the target audience or securing sponsorship opportunities to increase brand visibility.
• Analytics and Reporting: Tracking and analyzing the performance of advertising campaigns using various metrics, providing clients with insights on ROI and helping them make data-driven decisions.
• Interactive and Emerging Technologies: Utilizing new technologies like AR (Augmented Reality), VR (Virtual Reality), and AI (Artificial Intelligence) for more engaging and innovative advertising experiences.

Research advertising agencies in your area and online to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the market is missing a creative agency that provides digital marketing services or that monitors Google analytics and focuses on search engine optimization (SEO) . 

How much should you charge for advertising services?

Ad agencies charge $150 to $250 per hour of work on a campaign. Usually, the agency will estimate the hours required for a project and give a flat price. When you’re working by yourself, you should aim for a profit margin of about 90%

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be businesses and organizations. You can connect with business owners on LinkedIn or find them on Google and Yelp and call them directly. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm an Advertising Agency Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “ad agency” or “digital advertising”, boosts SEO
• Name should allow for expansion, for ex: “Momentum Marketing Agency” over “Brand Builders Agency”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

Powered by GoDaddy.com

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create an Advertising Agency Business Plan

Here are the key components of a business plan:

• Executive Summary: Highlight the vision and objectives of your advertising agency, focusing on delivering creative and strategic advertising solutions for various media platforms.
• Business Overview: Describe your agency’s services in creating and managing advertising campaigns, including concept development, media buying, and digital marketing.
• Product and Services: Detail the range of advertising services offered, such as print, digital, social media advertising, brand strategy, and market research.
• Market Analysis: Evaluate the demand for advertising services, identifying potential clients like small businesses, corporations, or non-profits.
• Competitive Analysis: Compare your agency to others, focusing on your unique offerings, such as niche market expertise, creative approach, or digital innovation.
• Sales and Marketing: Outline your strategy for attracting clients, using methods like networking, showcasing a portfolio, or digital marketing.
• Management Team: Highlight the experience and skills of your team, particularly in advertising, creative design, and business development.
• Operations Plan: Describe the process of campaign development, from client consultation to execution and performance analysis.
• Financial Plan: Provide an overview of financial aspects, including startup costs, pricing strategy, and projected revenue.
• Appendix: Include supplementary documents like case studies, client testimonials, or detailed market research to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to advertising agencies. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your advertising agencies will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have. 

Form Your LLC

Choose Your State

We recommend ZenBusiness as the Best LLC Service for 2024

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding an advertising agency business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Licenses/Permits

Starting an advertising agency business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your advertising agency business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as  MavenLink , HighLevel , or Function Point , to manage your sales pipeline, campaigns, scheduling, and invoicing. 

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Here are some powerful marketing strategies for your future business:

• Specialize and Showcase Expertise: Focus on a niche or specific industry, positioning your agency as experts in that area. Develop case studies and portfolio pieces to showcase your successful campaigns within that niche, demonstrating your deep understanding and capability.
• Content Marketing and Thought Leadership: Create valuable content that educates and engages your target audience. Start a blog, produce insightful whitepapers, or host webinars to establish your agency as a thought leader in the advertising field, building trust and credibility.
• Collaborate with Influencers: Partner with influencers in the marketing and business space to increase your agency’s visibility. This collaboration can extend your reach to a broader audience and lend credibility to your services.
• Run Targeted Social Media Campaigns: Leverage social media platforms to run targeted advertising campaigns. Utilize platforms like LinkedIn for B2B marketing and Instagram or Facebook for a B2C focus. Tailor your content to resonate with your audience on each platform.
• Client Testimonials and Referral Programs: Encourage satisfied clients to provide testimonials and reviews. Word-of-mouth is powerful in the advertising industry, and positive feedback can significantly influence potential clients. Implement a referral program to incentivize existing clients to refer new business.
• Attend Industry Events and Conferences: Participate in relevant industry events and conferences to network with potential clients and partners. Sponsorship or speaking engagements can further establish your agency’s presence and credibility within the advertising community.
• Implement Guerrilla Marketing Tactics: Get creative with unconventional, attention-grabbing marketing tactics that generate buzz. Guerrilla marketing can help your agency stand out and create memorable impressions, fostering brand recall.
• Offer Free Workshops or Training Sessions: Host workshops or training sessions on relevant advertising topics. This not only positions your agency as an authority but also provides a platform to interact with potential clients and showcase your expertise.
• Strategic Alliances with Complementary Businesses: Form partnerships with businesses that offer complementary services, such as graphic design, public relations, or digital marketing. These alliances can lead to collaborative projects and mutual referrals.
• Optimize Your Google My Business Profile: Ensure your Google My Business profile is complete and optimized. Positive reviews, accurate information, and engaging photos can enhance your local search visibility and attract clients in your area.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your advertising agency meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your advertising agency business could be: 

• Creative ad campaigns to grow your business
• Build brand awareness with better advertising
• Take your business to the next level with stronger ads & marketing

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an advertising agency business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in advertising agencies for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in advertising agencies. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an advertising agency business include:

• Advertising Specialists – assist with advertising campaigns
• Receptionist – greet customers, make appointments
• General Manager – scheduling, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run an Advertising Agency – Start Making Money!

Advertising helps make the business world go round, boosting brand awareness and educating consumers. The ad agency industry is huge and growing, so if you have relevant experience, a desire to help businesses grow, and creative skills, you could grab a share of the market and build a thriving advertising operation. 

This article has taught you how to launch a business, so now it’s time to start thinking up great ad campaigns and make your entrepreneurial dreams come true!

• Advertising Agency Business FAQs

Advertising agencies can be very profitable, with rates between $150 and $250. You’ll just need to come up with creative advertising campaigns to stand out in a competitive market.

Starting an advertising agency can be challenging, as it requires a wide range of skills, knowledge, and experience. Some of the key challenges include identifying a target market, developing a unique value proposition, building a team of talented professionals, establishing a strong brand identity, and attracting clients in a highly competitive industry.

To start a marketing agency, you will need a combination of creative, technical, and business skills. These may include expertise in areas such as branding, graphic design, copywriting, digital marketing, social media, analytics, project management, and business development.

To start an advertising agency with no experience, you may need to start small and focus on building your skills and expertise over time. You can gain experience by working for an established agency, freelancing, or taking on small projects for friends and family. You can also invest in training, education, and networking opportunities to build your knowledge and connections in the industry. 

As an advertising agency, you can offer a wide range of services to clients, including branding, creative design, copywriting, media planning and buying, digital marketing, social media management, analytics, and market research. You can also offer strategic consulting and project management services to help clients develop and execute effective marketing campaigns.

When developing and presenting advertising proposals to clients, it is important to follow best practices to ensure that your proposals are effective and persuasive. Some key tips include:

• Conduct thorough research and analysis to understand the client’s needs, target audience, and competition
• Develop a clear and compelling value proposition that highlights the benefits of your proposed strategy or campaign
• Use data and metrics to support your recommendations and demonstrate the potential ROI
• Present your proposal in a clear, concise, and visually appealing format that is easy to understand
• Be prepared to answer questions and address objections from the client

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm an Advertising Agency Name
• Create an Advertising Agency Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Licenses/Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Run an Advertising Agency - Start Making Money!

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