How To Start an Advertising Agency. Next: How to Grow and Eventually Sell it.
The decision to start an advertising agency in the current business environment requires a judicious evaluation of industry dynamics and market forces. While the advertising sector has demonstrated resilient growth, propelled by burgeoning digital ad expenditures and the escalating demand for specialized services like influencer and even TikTok marketing, the landscape is punctuated by countervailing headwinds.
On the upside, the normalization of remote work paradigms in the post-pandemic era has engendered a set of lean agency models, facilitating access to a geographically dispersed talent pool while mitigating overhead costs. Simultaneously, niche players adroitly carve out specialized verticals or service offerings could potentially unlock unique value propositions.
However, the macroeconomic uncertainty looming on the horizon poses a formidable challenge. Advertising expenditures have historically been among the first casualties when corporations undertake cost-cutting measures during periods of economic contraction. This cyclical vulnerability could potentially dampen demand for agency services. That said, my having lived through multiple recessions has shown me that agencies have continuously prospered over time.
Moreover, the industry’s competitive intensity cannot be overlooked. There is no one count… but clients have thousands of agency skill-set choices – from networks to savvy ex-creative directors. Plus, attracting and retaining top-tier creative, strategic, and digital expertise is an ongoing battle. The era of in-house agencies has not helped here.
Concurrently, client acquisition for fledgling agencies and freelancers that lack extensive portfolios and industry networks can be a tough undertaking in a sector characterized by market saturation and consolidation trends.
Ultimately, while opportune windows may exist for adroit entrepreneurs, a circumspect strategy that astutely navigates the sector’s headwinds is imperative. Meticulous planning, a persuasive value proposition that transcends competitors, and an acute alignment of the launch timeline with propitious economic conditions could elevate the probability of enduring success for the intrepid agency founder.
One could even give me a shout.
One Solution: Be Unignorable.
Another Big Picture Solution: Buy My Book… “How To Build a Kick-Ass Advertising Agency.”
Digging Into How To Start an Advertising Agency
Create a one-page business plan. its in the book.
Sales Cycles
Having run my business development consultancy for ten years, I see a cyclical pattern. Here are the three most important questions that agency managers ask me every week.
- What is the best way to start an advertising agency?
- What is the best – most efficient – way to grow my advertising agency?
- How can I sell my advertising agency?
First, a definition. While I work with digital, PR, hybrid, experiential and other forms of agencies, I use the generic term advertising agency because “advertising” is still a universal term for marketing communications agencies. It is also the term that clients, and other industry people, search (see my post about how clients find agencies to see some research that supports the use of the advertising word).
But, But: Digital Agencies have taken over search: This is a look at a couple of marketing communications search terms from Google Trends: ‘Advertising Agency, ‘’ Digital Agency,’ and ‘PR Agency.’ People still dig the universal term.
OK, back to the three questions and what I’ll call topline answers.
What is the best way to start an advertising agency?
Before you decide to start an advertising agency, ask yourself why you want to do this? If this question sounds ridiculous – it isn’t. I talk to enough burgeoning agency entrepreneurs to know that many do not spend the time to think through the WHY. Here are some of the questions asked and advice I give.
WHY? #1: It’s Fun
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