How much does it cost to start a digital marketing agency in 2021

Hi I’m Praneeth Kumar.

In this blog post I will walk you through everything you need to know about how much does it cost to start a digital marketing agency from scratch.

So if you are looking to start your own digital marketing agency in 2021 and beyond, you can learn exactly step by step the cost breakdown of starting a digital marketing agency from scratch.

So without further ADO let’s get started

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What is a digital marketing agency?

Before we understand how much it actually costs, let’s first define what a digital marketing agency is all about.

Digital marketing Agencies is an agency or business that takes care of the marketing activities of a particular company like promoting a business/products and

increasing the sales & traffic of a website & awareness of a particular company on digital platforms like search engines and social media platforms using various tools and techniques.

Activities of digital marketing agency includes,

  • Running ads on Facebook, google and other popular social media and search engines to get new customers, increase brand awareness and get more traffic and leads.
  • Interacting and building connections with people on social media and publishing content.
  • Creating and publishing content on the website to get more visitors from search engines and get more traffic and sales.
  • Creating beautiful and attractive websites for small businesses.
  • Managing email marketing of small businesses and many more.

This is exactly what a digital marketing agency does. In short it helps businesses grow online and get more sales and leads to the business and increases their revenue at the end.

How much does it cost to start a digital marketing agency?

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Essentially, there are 2 categories in which you need to invest money in order to start a digital marketing agency.

Offline costs of starting a digital marketing agency;

In this category the costs are generally of starting an agency and physical office where you can start working, maintenance and facilities.

Let’s take a look at them.

  1. Office rent.

Since you are starting a digital marketing agency you can have a physical location and address of your business so you need to have an office and you can either have your own home as a small office for your agency or you can rent out an external place and room.

It usually costs around $350 a month depending upon the various factors like location and space of the room provided and facilities.

Along with that you might also have to invest money in purchasing some important equipment for your agency like furniture, computers, electronics, etc, this might cost you another 1000 to 2000 Dollars as a one time investment and

you also have to invest money in maintenance of the office and supplies like electricity and water bill and this will depend upon the location and countries, but normally costs around 100$ a month.

Note:

You should only invest money in a physical location and office for your digital marketing agency if you want to target a specific location and get customers from specific city like local businesses,

if you want to get customers from all over the world having a physical office and address for your agency does not make much sense and it would be unwanted additional cost for rent and

other office expenses because you can easily connect with your clients online and stay connected with your team virtually.

2. Internet/WiFi connection.

Internet is kind of the oxygen to run your digital marketing agency because all of your work activities are associated with online work so you cannot ignore that at any cost,

as much as possible you should consider getting the best quality internet service to your agency and it usually costs around $100 a month and where it depends upon the location and the kind of facilities, speed and features you have in your plans.

3. Legal documents.

Since you are starting a real business with a physical location and address you must have all the legal documents with yourself.

Since I am not a legal expert I am not eligible to talk about all these legal matters,

I would recommend you to check out this & this blog from small business administration to learn more about legal documents for starting a business.

4. Insurance.

Even though if you are running a digital marketing agency which deals with things online you still have to get yourself protected with a small business insurance which can cost you around $50 per month and

it will help you protect you from difficult situation in your business like financial loss, getting a lawsuit against your business, getting your electronics and appliances damaged etc. 

This is even more important for your digital marketing agency because it will help you protect your future since, digital marketing industry is constantly changing with new technologies and changing algorithms and changing policies, trends and tactics,

 There is always a chance of going into losses in revenue if you don’t keep your skills updated with the latest digital marketing trends.

You can refer to this guide to learn more about all the types of business insurance, why you need them and how you can get them to your digital marketing agency.

5. Taxes management.

Since you are starting a digital marketing agency I would highly recommend you to consider hiring an accountant to manage all of your finances and Taxes so that you can save that time and energy.

If you have very less knowledge about taxes and managing money to reduce tax deduction then you should hire an accountant for that case.

On average you can easily hire an accountant to manage your taxes and accounts of your transactions for around $50 an hour.

There is no fixed price for all the costs of starting a digital marketing agency offline Like rent for office, Insurance,

legal documents, Taxes because it depends upon the country you live in and the currency along with your government rules.

The offline investment will vary for each individual Agency due to lots of external factors, so we will not consider this in the final costs.

Online costs of starting a digital marketing agency;

In This category we will talk about all the important investments you need to do in order to kick start your digital marketing agency and start acquiring clients Online.

  1. Professional Website.

Having a website is a basic necessity to start a digital marketing agency, 

Having a website can help you in building credibility with your audience and getting more customers to your business across the globe.

It is impossible to run a digital marketing agency without having your own website.

You can easily create a website using many website builders like

My personal recommendation would be to start building a website on WordPress because of the following reasons

  • You own your website and complete data and files on WordPress
  • You can easily customise your website however you want
  • WordPress is very SEO friendly and useful if you want to publish content on your website and get traffic to your business from search engines and grow your business with more customers eventually.

In order to start a website on wordpress you need something called web hosting where your website will be hosted and will be accessed by users on the Internet and a domain name which is the name of your website.

There are various web hosting services that are there like siteground hostinger and bluehost, the prices of these hosting services will vary depending upon the plan and hosting service you choose.

You can easily get a web hosting service for as low as 65 dollars a year and a domain name of $10 a year with Bluehost hosting service among others.

You can get started using my affiliate link to start your website using bluehost Hosting service for $65 a year With 65% discount and a free domain name.

If you get your web hosting service and start your website on wordpress using bluehost web hosting service you can get a free domain name and unlimited customer support with a 30 day money back guarantee.

Thankfully using bluehost web hosting service you can get a free unlimited email account.

This is very much important when you are starting a digital marketing agency to

have a professional email address because you will have to constantly get in touch and contact with different people using emails and

if you have a normal email id associated with your name rather than being associated with the domain name and the agency name it will look less

trusted for the people and clients of your business and they would not take your business much seriously.

So, not having a professional email address associated with the agency name like in my case 

[email protected] instead of [email protected]

can be a big credibility issue that you don’t want to face with your business.

If you don’t go with bluehost web hosting service or other popular web hosting service you might need to invest money in having a professional email address which can start from 12$ a month in office 365.

If you compare this prices with other website builders like

  • Wix costs from 14$ a month.
  • Square space starts from 18$ a Month.

Still spending so much money every month you have to purchase professional email hosting for your business separately from office 365 or Google work space.

This is the reason why WordPress is a relatively cheaper and better option compared to most other website Builders and

the fact is that more than 40% of the websites on the Internet are created and managed by WordPress only.

For more information regarding wordpress you can read my guides below,

2. Freelance web developer.

Now, Although you might not need to invest money in hiring a Freelance Web developer in order to create a beautiful and attractive website for your business since there are lots of themes and plugins that

you can easily install or purchase and design a website by yourself on WordPress watching some tutorials on YouTube but

if you can you should definitely try outsourcing the work which can save you a lot of time designing a beautiful website for your business but it will cost money for sure.

You can find lots of freelancers who can create amazing and professional websites for you in a couple of hours on many popular freelance platforms like fiverr, upwork and freelancer.com

Most Freelance Web developers usually charge around $50 for an hour and you can easily get your website created in a couple of hours depending upon your likes and interests and

it can cost you around approximately $150 to create a professional website using a freelance web developer.

3. Logo design and protection.

Now it’s time to get some professional look for your business and agency.

This is where having a logo for your agency and online business is very much important because it helps in following things,

  • A logo will help build a strong first impression with the people who visit your online business.
  • A logo will help differentiate your business and help you build a brand and recognition among the competition.
  • A logo will give your website and business credibility and increase trust.

Read why graphic design is important for your business.

In this case I would highly recommend you to consider hiring a freelancer to create a professional logo for your website

which you can trademark and protect so that no one can copy or create a similar piece of Logo design like yours and use it for their purpose.

You can easily find amazing logo designers on freelance platforms like upwork, fiverr, guru.

You can easily get your high quality professional logo designed in around $100 using the logo designer.

And when it comes to trademarking and protecting your Logo and your business unique identity, you can easily get it done under $300.

Since you have Trademarked your logo and protected your business legally so other companies

if you use your logo create a similar logo like yours you can easily file a case on them and law will help you in such case and penalize people copying your logo and business.

This is especially important for your agency because if you get your agency successful in the future and build a million dollar business out of it,

you should remain unique when other people try to imitate your business creating similar products and services like you do.

This is the reason why you should protect your logo and business with trademarks.

4. Digital marketing tools.

Believe it or not, the most important aspect of running a digital marketing agency is having access to lots of amazing tools and services which can make your life as a digital marketer easy.

Here is the list of key digital marketing tools.

  • Semrush this is by far the complete digital marketing tool you can use for all tactics in digital marketing from SEO, SEM, SMM,PR, etc, the cost is from 120$ starting to 450$ in business plan a month.
  • Ahrefs-If you want great SEO results, you can’t ignore Ahrefs, it is a most powerful tool which can help you in keyword research, link building and content marketing more than any other tool out, the cost is from 99$ starting to 999$ agency plan a month.
  • Google workspaceit is a collection of cloud computing, productivity and collaboration tools, software and products developed and marketed by Google, it costs around 18$ a Month.
  • Surfer SEO-It is a great tool to create SEO friendly content and blog posts analysing the pages that perform well for that keyword in Google, it costs around 29$, 59$, 99$ & 199$ a month depending on the plans.
  • Trello-it is a collaboration tool that organizes your projects into boards. In one glance, Trello tells you what’s being worked on, who’s working on what, and where something is in a process, it costs 12.5$ a month.
  • Canva– it is a free graphic design platform that’s great for making invitations, business cards, Instagram posts, and more. A drag and drop interface makes customizing thousands of templates simple and easy, it costs 12.99$ a month or 119.99$ a year.
  • Hootsuite-this is a social media marketing tool to manage all social media accounts in a single place and publish content to all accounts and analyse from 1 dashboard, it costs from 49$, 129$ & 599$ a month depending upon plans.
  • Email marketing tools- you need an email marketing tool to capture email addresses through lead magnets and send email to your audience to convert into customers for your agency, it costs around 100$ a month, the prices will vary depending upon the tool you use of which company, resources you need and the number of email subscribers you have.
  • Optinmonster- this is a popular wordpress plugin you can use to get more email subscribers through amazing pop ups and optin forms, it costs 19$ a month to 39$ a month depending upon the plan you choose.
  • Screaming frog- it is a popular SEO audit tool, it will crawl and show all the errors on your website like broken links, duplicate content, missing titles, etc it costs around 149 pounds a year and it has a free version as well.

To combine all the total cost of money you would have to invest in digital marketing tools, it is approximately 630$ a Month for all tools excluding screaming frog tool which costs another 200 dollars for 1 year and canva which costs 120$ for 1 year subscription.

5. Content creation.

Apart from offering digital marketing services to your clients you should also think of producing and

publishing content on your website and social media handles to constantly gain new customers and get more brand awareness and exposure.

As a digital marketing agency you should consider publishing content like

blog post on your website to get people visit your website from search engines and social media and you should also consider publishing content about your brand and

interact with people on social media platforms like Facebook, linkedin, Instagram and also publish videos on YouTube if you can because these platforms can really help you get more customers and exposure.

Let’s talk about publishing content as a blog post on your website,

You can hire freelance content writers from platforms like Upwork and they usually charge around $50-100$ for every 2000 words article.

The prices for articles will vary on different factors like experience and expertise of the writer,

is the topic too technical or requires an expert knowledge, the amount of time and Research required to write the blog, is it a simple blog post or a sales page, the blog niche, etc.

Consider the average price of a 2000 word blog post is 75$ if you outsourced it to a content writer.

And when it comes to social media marketing you can easily hire a social media Manager on freelance platforms or

you can handle it yourself to save money, usually most social media managers charge around $50 for an hour and it can cost you around $2500 a month for getting your social media accounts managed by a freelancer.

Obviously even in social media manager prices vary on lots of factors like total social accounts managed, how many posts published, etc.

6. Marketing costs.

You won’t get lot of customers to your business as you start so you need to get your business out in the public fast and quick and by far one of the best ways to do that is by running paid ad campaigns on

social media platforms especially on LinkedIn because it is the number one B2B platform for professionals and businessman.

Linkedin is the best platform to run paid campaigns to get new customers to your digital marketing agency because

the audience of LinkedIn are the Businessman and professionals who connect with each other and the average cost of LinkedIn paid ads Cpc is 6$.

Along with LinkedIn you should also consider investing money in running ads on Facebook which is the world’s largest social media platform as the average cost per click of Facebook ad is 2$.

So there is no amount of money that is fixed but you should definitely invest a 10-15% of revenue money in marketing of your brand on digital platforms especially in the beginning because

you will not have people for clients to your business in the first couple of months or until even I year.

In order to get those initial customers and some experience and testimonials of your business and

some positive reviews, you should consider running the ad campaigns on social media platforms to get your business out in the public and to let people know about you through word of mouth.

Now let’s take a look at the total cost of starting & running a digital marketing agency.

Total cost of starting a digital marketing agency from scratch;

Here i have only added the online costs of starting a digital marketing agency excluding the offline costs like rent of office, insurance and taxes because it will vary from different locations.

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What is the need?Cost.

1.

Professional website.

70$ a year.

2.Web developer.

150$.

3.

Logo design and trademark protection.100$ for logo+300$ for trademark

4.

Digital marketing tools.630$ a month+350$ a year for screaming frog and canva subscription tools.
5.Blog post content outsourcing to content writers.

75$ for a single 2000 word blog post.

6.Social media management.

2500$ a month.

Excluding the marketing and advertising costs of your agency on social media platforms like linkedin ads and facebook ads,

 the total costs of starting a digital marketing agency is around 4200 dollars a month

This is the actual cost of starting a digital marketing agency from scratch.

You can further read how to start a digital marketing agency in detail here and also read best digital marketing business ideas and how you can learn digital marketing from home in detail.

With that said let’s conclude the blog post.

Ending remarks.

There you go, these are everything you need to know about costs of starting a digital marketing agency.

Do comment down your views on the cost breakdown in this blog post.

Share the blog post if you have found it helpful.

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I will catch you next time till then keep learning and keep growing.

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