Social Media Marketing Agency

How Profitable Is A Social Media Marketing Agency? (Updated for 2024)

Pat Walls

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Updated: July 23rd, 2024

How Profitable Is A Social Media Marketing Agency? (Updated for 2024)

So you want to start a social media marketing agency?

And the first question that came to your mind was, “well, are social media marketing agencies actually profitable?”

With a market size of $111B - there’s plenty of business to go around.

Especially considering:

You could start a social media marketing agency with as low as $350
Based on our data, social media marketing agencies generate an average of $4.2M per year

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a social media marketing agency.

Let’s dive in!

Yes, a social media marketing agency is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $4.2M per year with an estimated gross margin of 90%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your social media marketing agency.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your social media marketing agency is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

If you’re wondering if a social media marketing agency is worth it, the answer is a big YES. With social media marketing agencies, you have the potential to earn $4.2M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $111B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a social media marketing agency to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful social media marketing agencies case studies.

Here are a few examples of profitable social media marketing agencies, and a few more details about them:

1. Trusted CMO ($900K/year)

Burnt out from her full-time CMO roles, Alison Murdock founded Trusted CMO in 2020 to provide fractional marketing services for B2B startups. With minimal investment, the consultancy has scaled by 50% annually and hit a million in revenue by 2023.

Is it profitable? Yes
How much money it makes: $900K/year
How much did it cost to start: $5K

How I Turned 20 Years Of Marketing Experience Into A $1M Business

Trusted CMO founder built a marketing consulting firm from scratch, growing 50% yearly, attracting clients via word of mouth from investors, founders, and marketing leaders, with plans to expand educational offerings and managed services based on client needs.

Read this case study

Read by 921 founders

2. Article-Writing Co ($1.5M/year)

David Tile, the founder of Article-Writing.co, originally tried to start a penny auction website after college but failed. He then turned to freelance writing to make some cash, which eventually led to him building a successful content writing service. With $40k - $50k in monthly revenue from clients like Answers.com, Tile's business has grown without any outside funding, emphasizing the importance of taking action and adapting to market forces.

Is it profitable? Yes
How much money it makes: $1.5M/year

How I Started A $80K/Month Content Writing Business

How David Tile turned a freelance writing gig into an $80k/month business, discussing lessons learned through managing growing demands and maintaining a remote team operation.

Read this case study

Read by 24,485 founders

3. Avci socso ($120K/year)

Mahsun Avci, the founder of Avci ApS, came up with the idea for his online marketing agency at the age of 15. After trying various online businesses and failing, he stumbled across the concept of SMMA and convinced his dad to let him run Facebook ads for his restaurant. Seeing successful results, Avci knew he had found the right business for him and dedicated himself to learning and mastering Facebook ads and personal branding.

Is it profitable? Yes
How much money it makes: $120K/year
How much did it cost to start: $350

How I Built A +$10K/Month Online Marketing Agency

A 15-year-old entrepreneur started Avci ApS, an online marketing agency, that has now grown to $10k/mo and aims to hit $175k in profit in 2021 through Facebook ads, content marketing, and social media client outreach.

Read this case study

Read by 8,557 founders

Learn more about starting a social media marketing agency:

Where to start?

-> Social media marketing agency plan
-> How to finance a social media marketing agency?
-> How much does it cost to start a social media marketing agency?
-> Pros and cons of a social media marketing agency

Need inspiration?

-> Other social media marketing agency success stories
-> Marketing ideas for a social media marketing agency

Other resources

-> Social media marketing agency tips

With a social media marketing agency, you can make an average of $4.2M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $350. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

Based on our data, average weekly revenue for a social media marketing agency ranges around $29K. As such, you could see monthly revenues of $116K.

To know if your social media marketing agency achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your social media marketing agency.

The income of a social media marketing agency owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established social media marketing agency is about $29K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a social media marketing agency owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Generally speaking, a social media marketing agency can expect profit margin of around 90%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a social media marketing agency, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, social media marketing agency owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, social media marketing agency owners can ensure long-term sustainability and profitability for their business.

The salary of a social media marketing agency owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established social media marketing agency, in a prime position, might see an average weekly salary around the ballpark of $26.1K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, a social media marketing agency is quite promising if you plan on starting such. With a market size of $111B, you can enjoy a potential revenue of around $4.2M per year with a gross margin of 90%.

Considering this information, you can enjoy a return of investment within 7 months, especially if you have a monthly profit of $105K. Overall, the success of your social media marketing agency also depends on your effort and knowledge about it. If you persevere with these things, you can ensure that this social media marketing agency is profitable.

Make sure you have a proper social media marketing agency plan and know how to get clients for your social media marketing agency.

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Starting A Social Media Marketing Agency: Everything You Need To Know

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