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How To Start An Advertising Agency In 2023: What You Need To Know

Last Updated: November 21, 2023

Welcome to my How To Start An Advertising Agency review. My goal is to answer common questions like: how much it costs, if it's a scam, & if you can actually make money with it. The end goal is to help you understand if it's a good fit for you personally, and if there are any better alternatives out there.
How To Start An Advertising Agency


This How To Start An Advertising Agency review has been thoroughly researched with information and testimonials that are available online to anyone in the public. Any conclusions drawn by myself are opinions.

Before We Get Into It... Who Am I?

Always good to put a name to a face, so firstly, my name is Hope!

Like you, I was stuck working 8-10 hour days building someone else’s dream.

I worked at one of those cool tech companies that has omelet stations for breakfast & craft beer on tap for after hours.

To a lot of people that’s a dream, but to me… something was missing.

All I really wanted, was to actually enjoy life – more vacations, less stress, buy myself nice things without worrying about the cost… but that was something my 9-5 couldn’t provide me.

That was until a few years ago when I discovered a way to make money online by actually helping real people.

People in this case were local business owners across the US.

Me and My Puppy

For How To Start An Advertising Agency

The page above is an example of how I do it. That one-page site generates $1,500/mo and I haven’t even touched it since it was put up.

That’s an $18,000/year raise from just one page.

That’s why local lead generation is my #1 business recommendation for recurring, semi-passive income. If you want to learn about that business model, click here.

They have no clue what it’s actually like to run the different types of businesses they write about.

I have absolutely no relationship with this program, so you can rest easy knowing I’m going to give you my honest opinion.

This review is written based on my own experiences with this business model.

All that being said, let’s jump into things.

Table Of Contents

Innovative and successful advertising techniques are required for today’s digital marketing sector to attract consumers. Advertisement agencies create and carry out these types of campaigns.

The yearly income of the advertising business in the United States is $44 billion and rising.

If you are someone who wants to pursue a career in the advertising world, but doesn’t exactly know how, you’ve come to the right place!

Alright, so Advertising Agency Business doesn’t exactly fit into a nice category.

At the end of the day, advertising is a… unique way to think about making money.

It’s certainly possible to make money with off-the-wall businesses like this, but unless you’re interested in taking years out of your life to experiment with an unproven business model, I would look elsewhere.

My #1 personal recommendation for starting a fully-online business has got to be the Lead Generation & Ad Agency business models.

There are a handful of programs that teach you the ropes, but my #1 choice that combines both of those business models into one is the Digital Landlords program

But, if you’re hard-pressed to jump head-first into an off-the-wall business model, let’s continue to my full breakdown of the Advertising Agency Business.

Benefits Of Starting An Advertising Agency

Low Overhead And Startup Costs

Low Overhead And Startup Costs

Many ad agencies can operate without the need for a physical location. In most cases, some of the following items are often included in beginning costs:

  • Technology (hardware and software)
  • Internet service
  • Any necessary business registration

To get started, you don’t even need a huge staff. Initially, you could operate your own advertising agency and accomplish most of the deliverables by yourself as a way to cut costs.

Large Potential Client Base

Large Potential Client Base

Customers may now be served from any part of the world thanks to today’s advanced digital technologies.

Although the marketing field is crowded, there are several opportunities to establish a niche by targeting certain companies, such as salons, restaurants, and law firms.

Low Barrier To Entry

Low Barrier To Entry

To start a digital advertising agency, you don’t need a lot of marketing experience since the industry is always changing and expanding.

You can create your reputation as a professional advertiser if you have a foundational understanding of content marketing and social media, as well as a desire to grasp new and developing platforms.



You may easily expand your business if you have a dedicated group of low-cost contractors and freelancers working for you. With the following, you may provide your consumers with a full-service marketing campaign:

  • Copywriting
  • Social media
  • Email marketing
  • Graphic design
  • Search engine optimization (SEO)
  • Etc.

Start An Advertising Agency By Following These 9 Steps

It’s time to go forward now that you’ve discovered the ideal business concept. It’s not enough to register a company with the state.

I’ve put up an easy-to-follow guide on starting your own ad agency. These measures will ensure that you have a new business that is well-planned, registered, and compliant legally.

STEP 1: Plan Your Business.

Plan Your Business

Entrepreneurship requires a well-thought-out business plan strategy that lets you map out the specifics and expose certain unknowns.

A few key questions to ask are:

  • What are the initial and recurring costs?
  • Do you have a pricing model in mind?
  • Who is your intended audience?
  • How much money can you charge your customers?
  • What will you call your company?

Fortunately, I’ve already done a lot of the legwork for you.

What Are The Costs Involved In Opening An Advertising Agency?

Advertising agencies don’t sell items; instead, they give services. As a result, launching your own agency is quite inexpensive.

Typically, you would need an office space to meet with clients, PCs to complete approved projects, a printer, an internet connection, and a website.

However, there are ways to cut these costs to a minimum. Small business owners on a limited budget can:

  • Rent an office space only when needed
  • Work in public spaces like coffee shops that offer free wi-fi
  • Use their personal PCs
  • Outsource printing needs

What Are The Ongoing Expenses For An Advertising Agency?

They include the following:

  • Office rent, if any
  • Computer costs
  • Internet connection
  • Employees’ salaries

Employees’ salaries usually make up a huge chunk of the agency’s ongoing expenses.

Who Is The Target Market?

Advertising companies often target other corporations, enterprises, or non-profit groups as their customers. The ideal customer for an agency fits within the company’s marketing specialty and needs ongoing support.

Such a customer will often request that an agency be placed on retainer. A retainer is an agreement in which a client hires an agency a specific sum weekly or monthly in exchange for a certain number of hours for the agency to work on their clients’ campaigns.

How Does An Advertising Agency Make Money?

Companies that provide advertising campaigns to customers make money. As a rule, a sales pitch from an agency would be free of charge in most situations.

If the customer approves the pitch, the agency is hired to carry out the campaign proposal.

How Much Can You Charge Customers?

Advertising companies usually charge their clients an hourly fee or a commission. According to Two Hats Consulting & Web Design Services, hourly fees are normally determined by dividing the annual salary of the individual (or people) who will embark on a project by 1,500 (approximate number of billable hours in a year).

Commissions are typically 15% of total media and production costs.

How Much Profit Can An Advertising Agency Make?

As previously mentioned, the potential earnings most ad agencies generate are in billions of dollars per year but with lower annual revenues.

A lot of agencies produce hundreds of thousands yearly which depend largely on their distinctive niches.

It isn’t uncommon for ad agencies to generate annual revenues in millions of dollars.

How Can You Make Your Business More Profitable?

Offering services apart from traditional marketing can help an advertising agency boost its profitability.

If public relations or social media consulting services are required, for example, an agency may offer them to customers.

STEP 2: Form A Legal Entity.

Form A Legal Entity

Sole proprietorships, partnerships, limited liability companies (LLCs), and corporations are the most common business structures.

If your ad agency is sued, forming a legal business entity like a corporation or LLC prevents you from being held personally accountable.

You may form an LLC on your own and spend only for the minimal state LLC fees, or you can employ an LLC service to do it for you for a modest charge.

STEP 3: Register For Taxes.

Register For Taxes

Running a business would require registration for various taxes at the state and federal levels; you must register for several state and federal taxes.

To register for taxes, you must first get an EIN, a free and simple process.

Small Business Taxes

Your taxes depend largely on the type of business structure you will register for.

Depending on the business form you select, you may have several options for how your company is taxed. Some LLCs, for example, may benefit more if registered as an S corporation (S corp). Note that there may be state taxes that are specific to your business.

STEP 4: Open A Business Bank Account & Credit Card.

Open A Business Bank Account & Credit Card

Personal asset protection requires the use of separate business banking and credit accounts.

When you combine your personal and business accounts, you also put at risk your personal assets (your house, vehicle, and other possessions) if your company is sued. This is regarded as a “piercing your corporate veil” in business law.

Furthermore, understanding how to develop corporate credit can help you obtain credit cards and other forms of financing under your company’s name (rather than your own), higher lines of credit, lower interest rates, and other benefits.

Open A Business Bank Account.

This isolates your personal assets from the assets of your business, which is crucial to protect your personal assets.

It also simplifies your bookkeeping and tax filing.

Get A Business Credit Card.

This enables your personal and company expenses not to be mixed by consolidating all of your company’s expenses in one location.

It also establishes your company’s credit history, which you may use to raise funds and attract investment in the future.

STEP 5: Set Up Business Accounting.

Set Up Business Accounting

Keeping a record of your company’s sources of income and expenditures is crucial to obtaining a good assessment of your business’ performance in terms of finances.

Maintaining detailed and accurate records also makes yearly tax filing much easier.

STEP 6: Obtain Necessary Permits And Licenses.

Obtain Necessary Permits And Licenses

Failure to get required licenses and permits can lead to huge penalties or possibly the closure of your business.

Federal Business Licensing Requirements

These rules, known as “truth-in-advertising laws,” safeguard consumers by requiring truthful product marketing by advertisers and substantiation of their product claims.

Failure to comply with advertising and marketing laws such as this may result in expensive civil penalties and even lawsuits.

The Federal Trade Commission (FTC) is the primary federal agency responsible for enforcing these advertising rules and regulations.

State & Local Business Licensing Requirements

To run a marketing agency, certain state licenses and permits may be required. You may visit the SBA’s reference to state licenses and permits to learn more about your state’s licensing requirements.

Most companies must perform sales tax collection on their products and services. For more information on local licenses and permits, you may:

  • Check with the clerk’s office in your town, city, or county.
  • Contact one of the local associations mentioned in the US Small Business Associations directory of local business resources for assistance.

Services Contract

A services contract describing the terms and conditions of service is usually drafted for businesses where services are given on an ongoing basis. Before jumping into a new project, a services agreement with your client is required.

By defining payment terms and conditions and service-level standards, this agreement gives a clear outline of your client’s expectations and minimizes the possibility of legal conflicts.

Certificate Of Occupancy

A typical advertising agency operates from a physical location. A Certificate of Occupancy (CO) is generally required for businesses that operate from a physical site. A CO attests that all building codes, zoning laws, and government restrictions have been followed.

  • If you intend to lease office space:
    • The landlord is usually responsible for obtaining a CO.
    • Before signing a lease, make sure your landlord has or can acquire a valid CO for an advertising agency.
    • A new CO is sometimes required following a major renovation. If your location goes through such before opening, indicate in your leasing agreement that lease payments will not begin until a valid CO is obtained.
  • If you intend to buy or develop office space:
    • You must get a valid CO from a local government body.
    • Examine all building codes and zoning standards for the location of your business to guarantee that your agency will be compliant and able to acquire a CO.

STEP 7: Get Business Insurance.

Get Business Insurance

Insurance, like licenses and permits, is required for your business to operate legally and safely.

Business insurance provides your company’s finances with protection during a covered loss.

There are many insurance policies designed for various types of businesses that pose different risks. If you are unaware of these risks that your company may encounter, start with General Liability Insurance (GLI).

GLI is the most common type of coverage needed by small businesses, so it’s a rather good and safe place to start yours.

STEP 8: Define Your Brand.

Define Your Brand

Your company’s brand is what it represents and how the public perceives it. A brand image will allow your company to stand out from the competition.

How To Promote & Market An Advertising Agency.

The location of advertisements placed by an advertising agency is determined by what type of clients it wishes to reach.

For example, a local business-targeting agency may choose to put ad campaigns in local publications and become members of the town’s chamber of commerce.

In comparison, an agency that concentrates on internet marketing may benefit more from pay-per-click advertising.

How To Keep Customers Coming Back

Industry recognition for campaigns completed by an advertising agency may help it stand out from the crowd. There are several award-giving organizations for various advertising campaigns.

These awards are given by various organizations, including Hermes Creative Awards, Ad Age’s Small Agency Awards, Marcom Awards, and Clio Awards.

STEP 9: Create Your Business Website.

Create Your Business Website
Web Design layout sketch drawing Software Media WWW and Graphic Layout Website development project

After defining your brand and designing your business logo, the next step is to build your company website.

While building one is an important step, some may be concerned that it’s not their cup of tea due to their lack of website-building knowledge and experience.

While this was a legitimate concern in 2015, online technology has made significant advances in recent years, making the lives of small company owners considerably easier.

The following are the major reasons why you should not put off establishing your website any longer:

  • Every reputable business has a website. Period. When it comes to bringing your business online, it doesn’t matter what size or sector it is.
  • Facebook pages, LinkedIn company profiles, and other social media platforms should not replace your business website.
  • Website builder programs, such as the GoDaddy Website Builder, have made it incredibly simple to create a basic website. You don’t have to employ a web developer or designer to create a decent website.

Advertising Agencies: Is This Business Right For You?

Is This Business Right For You

Those who are both artistic and have a sense of business could be most suitable to start an advertising agency.

Sales pitches for customers necessitate a high level of creativity, but you must combine this with a good business sense that considers the agency’s financial sustainability.

What Is My Top Recommendation For Making Money In 2022?

Make Real Money Online With Digital Landlord

Alright, time for me to get real with my lovely readers for a moment:

I’ve personally tried all of the major online business models:

  • I’ve sold fidget spinners through Amazon FBA
  • I’ve drop-shipped a toilet bowl putting green on Shopify
  • I’ve sold women’s health supplements via Clickbank affiliate marketing

And I made money with all of them, so trust me when I say: there is no “perfect” business model.

THAT BEING SAID: I would at least recommend you implement something that is tried and true because I’ve seen TOO MANY people (including friends and family) get burned by stuff like Advertising Agency Business.

They come out of left field with some random idea, make it seem attractive, and then make themselves a quick buck by luring in unsuspecting people.

I’m not saying Advertising Agency Business itself is a piece of trash; I’m just saying you need to be very, very careful.

This is why I only recommend proven, tried, and true business models, like Lead Generation & Ad Agencies.

There are a bunch of programs out there that teach you those skills, but my top choice is the Digital Landlords program.

Why? It has proven leaders with their own 7-figure businesses implementing exactly what they teach you.

I’ve also got over a dozen personal friends there, so I feel comfortable telling you it works.

Whether you’re a complete newbie or you’ve been around the block before but have never had that “big win” to propel you forward, their program works.

Here’s why:

1)Time: You can do this if you’ve got a spare hour or two each day. If you want to drop everything and go all-in, you can do this. More time obviously means faster results, but even putting in a few hours per day is enough to see real success.

And because of that flexibility, you don’t need to trade your time for money. Once the income starts, it’s recurring (for the most part).

That means you can take a month off, travel the country, pursue a passion project, chill on the beach, or charter a boat across the world.

But you can only do that once you’ve created an income stream that doesn’t require YOU to be there all day, every day.

2)Big Margins: With most businesses, you’re often going to have really slim margins. That means you need to hit a serious scale to make serious money.

Being a Digital Landlord, your profit margin is nearly 100%. Watch here to learn how.

Just a reminder: these Digital Rental Properties are worth (at a minimum) $500/mo in semi-passive income. And each time you create another one, your income increases, and the effort put into creating the next property decreases.

Best-case scenario, you have properties bringing in over $3,000+/mo on “auto-pilot.”

3)It’s Effectively Copy-Paste: Here’s my favorite part: once you have your first Digital Rental Property up, you can literally copy-paste another version of it and find another willing “renter” in a few days. DOUBLING your income doesn’t get much easier than that…

If you wanted to double your income with Advertising Agency Business, you would need marketing expertise. And I can guarantee you that’s a lot harder than a few clicks & a phone call.

4)You’re Helping REAL People: My biggest gripe with Advertising Agency Business is that you’re basically only helping yourself.

But when you’re a Digital Landlord, you’re helping solve REAL problems that people are ASKING for help with:

Small local businesses around the world need one thing: customers. Without them, their business would fall apart. If you can provide those customers, they’re going to be really happy – and they’re going to pay you for it.

You’re helping a struggling mother or father put food on the table for their families, put their kids through college, or simply live life a little bit more comfortably.

Having this type of impact on the world is what will help you sleep soundly at night.

So, the rest is up to you. You could keep looking at other off-the-wall business models like Advertising Agency Business and maybe hit it big one day.

You could keep researching and researching for the next few months (or few years), never making a concrete decision.

OR, you can look deep inside, think about those dreams, hopes, & desires, and make the decision to ACTUALLY make it happen, just like it has for thousands of other students before you.

Making a fortune while actually helping real people that need it.

If this sounds like you, click here to see how it all works.



I make over $20,000/MO thanks to this platform... check it out below!