Online Advertising Agency

How Much Does It Cost To Start An Online Advertising Agency? (In 2024)

Updated: July 21st, 2024

Looking to start an online advertising agency?

But curious about:

  • how much it costs to start an online advertising agency?
  • what are the typical online advertising agency startup costs?
  • or the actual cost of starting online advertising agencies?

Well, we have the data to prove it, supported by real online advertising agencies and how much they actually cost to start.

Let's go over it.

What is the average cost of starting an online advertising agency?

Based on our data reported by actual online advertising agency founders, the average cost of starting an online advertising agency is between $20 and $1,200,000.

Additionally, our data shows that the the median startup costs for an online advertising agency are around $2.5K.

Remember, though, not all online advertising agencies are the same - and neither are people's budgets. It's important to distinguish between different levels or types of online advertising agencies

Real World Examples: How much does it cost to start an online advertising agency?

We asked real online advertising agency founders and business owners how much it actually cost to get started?

Here is what they said:

Luis Camacho

Founder of Fantôm Agency ($25K/month)

"The costs (which I like to call investments) of building out Fantôm from scratch can be broken down into two main items and no credit cards or loans were necessary: The cost of things needed to do the work: Website, Software/tools, Energy drinks, Online courses, Online communities, Books, Mentors."

Luis Camacho is the founder of Fantôm Agency, a digital advertising agency that focuses on helping mid-to-late stage SaaS companies scale through paid advertising channels.

Read by 14,189 founders

Valerio Celletti

Founder of Loop ($115K/month)

"In fact, launching our agency as a 100% remote-working based company reduced the initial starting costs, and opting for freelancers instead of hired workers helped us scaling up gradually and allowed us a certain degree of flexibility in business management. *In the first years, our costs have been mostly around freelancers and online tools.***"

Francesco and Valerio are the founders of Loop, an Online Advertising Agency that achieves $35K/Mo, focusing on Paid Advertising services and recently expanding to chatbot projects.

Read by 7,456 founders

Robb Fahrion

Founder of Flying V Group ($250K/month)

"Today, Flying V Group employs 12 people, has worked with over 300 clients, operates internationally, and is on pace to double revenue for the second year in a row. Crazy to think about being here when my brother and I both got up and quit our corporate jobs and put $5k into the project to get us started!"

Robb Fahrion is the co-founder of Flying V Group, a digital marketing and advertising company that helps businesses grow through online strategies.

Read by 5,353 founders

Kathryn & Michael Redman

Founder of Half a Bubble Out ($98K/month)

"In the early days, we self-funded our business in three ways. Kathryn had a good job, so we saved as much money as possible and lived well within our means. Like many other business owners, we also used credit cards and put ourselves in situations that were challenging. It was never out of control, but we wish we’d done less of that. The third way was fortuitous. We started our company in 2002 when the market in California wasn’t moving. Then, over the next five years, our house tripled in value, so we had investment capital we were able to take out of the house for the business. Through those three methods, we were funded without having to take out loans."

Michael and Kathryn Redman are the founders of Half A Bubble Out, a full-service marketing and advertising agency based in Chico, California.

Read by 5,924 founders

Bant Breen

Founder of Qnary ($550K/month)

"The MVP took just 2 weeks to build and cost only $400. I registered the domain and it cost $12.99. It really didn't cost much."

Bant Breen is the founder of Qnary, an executive reputation management and talent branding solutions company that started in 2012 and now has thousands of executive and enterprise clients globally.

Read by 7,707 founders

Yvette Adams

Founder of The Creative Collective ($200K/month)

"In terms of finance, in the beginning, I was very resourceful. As I mentioned earlier I had a three-year-old and a newborn and we were going backwards financially fast. So there was no startup capital to speak of. I simply did a lot of hard work, and any time I made a profit, we reinvested it all back into the business. In the early days, I took no wage, later I took a small wage, and it was probably around nine years into the business and two years after Kat and I became 50/50 shares in the business that we both finally started to pay ourselves the sort of wage we could command if we went out into the workforce."

Yvette Adams is the founder of The Creative Collective, a full-service marketing agency that started in 2007 and has since experienced significant growth and revenue increases.

Read by 5,089 founders

Michael Maher

Founder of Cartology ($43K/month)

"In terms of the costs, it was fairly minimal starting out. I freelanced as I was transitioning from my product-based business, so my startup costs were primarily just my time. Now, we invest in subcontractor labor and some software, but we're a remote agency, so overhead is still low compared to traditional agencies."

Michael Maher is the founder of Cartology, a service agency focused on managing Amazon channels for brands that has grown significantly since its inception.

Read by 8,549 founders

Roger Sievers

Founder of Sievers Creative ($100K/month)

"Never had startup capital, never went into debt borrowing money."

Roger Sievers is the founder of Sievers Creative, a full-service marketing agency in Minnesota.

Read by 4,194 founders

Brice Gump

Founder of Major Impact Media ($28.5K/month)

"Major Impact Media was launched completely self-funded."

Brice Gump is the founder of Major Impact Media, a hybrid agency/education company started in 2015 that focuses on providing marketing services and education to experts, coaches, consultants, and online service providers.

Read by 3,402 founders

Ash Ome

Founder of MOTIF® ($35K/month)

"I started this business with $60 and nowadays we make on average $50K-$100K on recurring revenue. And don’t do any web project smaller than $50K."

Ash is the founder of Motif, a growth-driven digital agency that helps DTC Fashion, Luxury & Lifestyle brands with proven strategies and methodologies to grow faster.

Read by 5,870 founders

Enjoyed reading these real world examples?

Our platform is full of case studies of successful online advertising agencies that you can learn from.

Starting an online advertising agency - what you should know:

Starting an online advertising agency involves navigating various costs that can influence the overall budget, from initial setup to ongoing expenses.

Legal and Licencing Fees

Before launching, you should budget for legal and licensing fees. Registering your business might cost you around $50 to $500 depending on your location. Additional costs can include drafting contracts, which can range from $200 to $1,500 when using a professional lawyer.

Technology and Tools

Investing in the right technology and tools is crucial. Essential software subscriptions like Google Analytics, Ahrefs, or SEMrush can range from $99 to $399 per month. Additionally, setting up robust cybersecurity measures can initially cost from $500 to $2,000, depending on the complexity and size of your operation.

Office Space and Utilities

While many agencies start remotely, renting office space becomes necessary as you scale. A coworking space can cost anywhere from $200 to $600 per month per person. Fully private office leases vary widely but expect at least $1,000 to $3,000 per month for a small team in most urban areas. Don't forget about utilities, which can add another $150 to $500 per month.

Marketing and Advertising

Promoting your agency requires a budget for marketing and advertising. Allocating around 5% to 10% of your revenue toward marketing is standard practice. For a new agency, this might mean an initial outlay of $1,000 to $5,000 for an effective digital marketing campaign, including pay-per-click (PPC) ads and social media promotions.

Staffing and Salaries

Hiring skilled professionals is a significant expense. Expect to pay entry-level account managers around $40,000 to $60,000 annually, while experienced digital marketers or PPC specialists might demand $70,000 to $120,000. Freelancers can offer a more flexible arrangement but could run in the range of $25 to $150 per hour, depending on their skill and experience.

By carefully considering these expenses, you can develop a more accurate financial plan and ensure your online advertising agency starts on solid ground.

Potential Costs of Starting an Online Advertising Agency

Starting an online advertising agency involves various upfront and recurring costs, including fees for software tools, marketing, labor, and infrastructure. Below is a detailed breakdown of these potential costs.

Cost Category Description Estimated Cost
Domain Name Registration Registering a domain name for your agency's website. $10 - $20 per year
Website Hosting Services to host your agency's website. $5 - $50 per month
Website Development Cost for developing a professional website. $500 - $5000 one-time
SSL Certificate Ensuring secure browsing experience for visitors. $0 - $100 per year
Business Licenses Legal fees for registering your business and securing necessary permits. $50 - $500 one-time
Legal & Accounting Fees Professional fees for legal and accounting services. $500 - $2000 per year
Office Supplies & Equipment Costs for purchasing computers, desks, chairs, and other office supplies. $1000 - $5000 one-time
Software & Tools Subscriptions to various advertising, analytics, and project management tools. $100 - $1000 per month
Social Media Management Tools Tools such as Hootsuite or Buffer to manage social media campaigns. $10 - $99 per month
SEO Tools Tools like Ahrefs, SEMrush, or Moz for search engine optimization. $100 - $500 per month
PPC Management Tools Software like Google Ads or Bing Ads for managing pay-per-click campaigns. $50 - $500 per month
Email Marketing Tools Tools like Mailchimp or Constant Contact for email marketing campaigns. $10 - $300 per month
CRM Software Customer Relationship Management system to manage client interactions. $12 - $300 per month
Graphic Design Software Tools like Adobe Creative Cloud for creating advertising materials. $20 - $52.99 per month
Stock Images & Videos Subscriptions to stock image and video libraries. $10 - $200 per month
Marketing & Advertising Initial costs for promoting your own agency through various advertising channels. $500 - $5000 one-time
Hiring Labor Costs for hiring employees or freelancers (graphic designers, copywriters, etc.). $3000 - $10000 per month
Training & Certification Costs for industry certifications and ongoing training programs. $100 - $2000 per year
Utilities & Internet Recurring monthly expenses for office utilities, internet, and communication. $100 - $300 per month
Insurance Business liability and errors & omissions insurance. $300 - $1500 per year

The total start-up cost for an online advertising agency can vary widely based on the scale of operations and specific needs, ranging approximately from $5,000 to $50,000.