Agency Values are Growing, Creating Opportunities for Skilled Marketers
In February 2023, Havaas (a prominent international marketing agency) announced that their “Aggressive” acquisition strategy resulted in annual profits leaping 20% in 2022. Thus continued a common theme in the marketing landscape, as large international agencies spend upwards of 2x annual revenue (not profit) to acquire regional agencies and the clients they serve.
Particularly attractive are agencies who have reached the $2 Million to $10 Million revenue threshold; a benchmark that has become increasingly possible to achieve in recent years. The inevitable result has been twofold: First, agency consolidation has created an opportunity for new local marketing talent to launch agencies that support regional businesses. And second, the value of this effort has never been higher.
According to Statista, global digital advertising spending is expected to reach $526 billion in 2024, up from $389 billion in 2021. As more regional businesses focus on building efficiencies and connecting revenue attribution to their marketing efforts (and compete to influence an increasingly informed digital audience) the demand for digital marketing services will continue to rise.
Last year, QL Group began working with Sarah, a talented marketer who had been working for a top digital agency for the previous 5 years. She always loved the creative aspect of her work and valued the interactions she had with her clients but had increasingly been feeling unfulfilled. Driven by a combination of factors, not the least of which was her company’s growing tendency toward scalability over client experience, Sarah became focused on leveraging her skills and experience to build something of her own.
Soon, Sarah was researching the most impactful way to launch her own full-service digital marketing agency. She knew it would be a lot of work, but she was excited about the prospect of creating her own vision, working with clients she’s passionate about, and creating a company environment that prioritized results. Ultimately, she envisioned a future where she was able to align herself with marketers who shared her passion for creativity, strategy, and service to their business communities.
At first, she felt overwhelmed. She discovered many digital tools that she could leverage, and she worked hard to develop a business plan / blueprint that would position her for success. Still, there were many gaps to fill before she felt she could comfortably bring her business to market. As weeks turned into months, Sarah became increasingly frustrated by her lack of progress. Soon, she was beginning to consider starting with a side-hustle, foregoing her thoughts of agency ownership in favor of a part time marketing consultancy.
Eventually, Sarah established a dialogue with QL Group. Though the coming weeks and months weren’t easy, Sarah launched her agency, hustled to execute the roadmap, and partnered tirelessly with her new Sales Engineers and Account Managers to establish a practice she’s proud of.
Soon, she was working with clients in a variety of industries, from education to finance, and she’s loving every minute of it.
One of the things Sarah enjoys most about running her own digital marketing agency is the flexibility it offers. She can work from anywhere, whether it’s her home office, a co-working space, or a cafe. This means she can set her own schedule and prioritize the things that matter most to her.
As her business has grown, Sarah has begun to recognize the opportunity scale. While still on the horizon, she’s looking forward to launching an effort to hire new talent toward the end of 2023.
If you’re a talented marketer who has always considered starting your own digital marketing agency, know that it’s possible. With the right mindset, skills, strategy and support, you can create a vision and turn it into a reality. Here’s some of the things we help new agency owners realize:
- Profitability that doesn’t impact client results: Margins tend to range from 30% to 50%, or more.
- Flexible business model: By providing new agencies with a full suite of resources, including Sales Engineers and Account Managers (not to mention all the necessary tech) local agencies can be run from anywhere with an internet connection, providing the flexibility to work from home or remote locations.
- Opportunities for specialization: While being a generalist is fine, new agencies often specialize in a particular industry, such as healthcare or hospitality. This allows the agency to differentiate itself from competitors and become a leader in its niche.
- Possibility of scaling: As the business grows, QL Group agencies are positioned well to scale their services, and client base.
