Starting an Advertising Agency

Create a start-up business with little capital needed up front

By Jenni Simcoe, Writer

Because advertising agencies provide primarily services, rather than final products, a small ad agency can be a low-cost start-up. If you outsource graphic design, copywriting and production, you can reduce overhead even further. Then as your agency grows, you can bring some of the primary services that you use in-house. Before you start your advertising business, you’ll need to:

1. Collect media kits that list advertising rates, demographics and specs.
2. Introduce yourself to sales representatives at the media outlets you plan to use regularly.
3. Create a portfolio of past work, if you have been in the industry, to highlight ad campaigns you’ve worked on in the past.

Stay on top of the advertising game

By subscribing to trade publications geared to ad agencies, you can keep up with industry events, trends, suppliers and technology.
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Brandweek focuses on brand identity, sponsorships, licensing, media usage and distribution, and promotions. Advertising Age magazine, along with its dotcom partners adcritic.com and Madison+Vine.com, provide articles, case studies, picks of the day and week and news on the advertising industry. Communication Arts magazine focuses on the print and illustration genres of advertising. Adweek covers print, regional news, best spots and other subjects pertaining to advertising.

Create a business plan for your advertising agency

Starting your own company by picking up where you left off at your last job in advertising may make it seem like the only change is that you are now the boss. But there’s more to starting your own agency to consider. Start with a detailed business plan and operations plans.
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PlanMagic Business software offers a comprehensive business plan guide and template that is customized for ad agencies as well as fully automated financials. The Advanced Edition further includes state-of-the-art financial analysis tools and a Web marketing guide. The Business Owners’ IdeaCafe lists start-up costs, potential earnings, equipment requirements and skills needed.

Join advertising industry trade associations

Joining a trade association not only allows you to continue your education and keep up with trends and technology, it also allows you to meet with your peers at trade shows and conventions and enter awards contests to add to your credentials.
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The American Association of Advertising Agencies not only provides support and education, but also offers group rates on workers' compensation, retirement savings plans, group insurance plans, affinity programs, liability insurance and business owners insurance. The Association of Hispanic Advertising Agencies provides leadership in raising awareness of the value of the Hispanic market opportunities and enhancing the professionalism of the industry.

Find clients for your advertising agency

You’ve planned your business, but now it’s time to find clients. Start by researching what companies regularly use advertising and what companies are in the market for a new agency.
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Advertising Database lists thousands of companies who use advertising and their annual needs and advertising budgets.

Build your contacts

Just as important as finding new clients, is the search for media contacts. If you have a system set up for media kits, rate cards and advertising specs, you’ll save time when in a crunch on your advertising campaigns.
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Subscribe to a service where you have advertising information at your fingertips. Burrelles Luce and Gebbie Press provide contact information to thousands of media outlets around the country. For a host of other media contact databases, visit Business.com.

Go virtual

A bricks and mortar business isn’t a necessity now that we are living in the internet age. The economy has become more global, so more companies have looked to virtual agencies to provide services that were in the past limited to local agencies. There are two ways to become a virtual online agency. The one that requires the least effort and capital is to have your presence on the web, but actually control the client accounts just as a bricks-and-mortar agency with good customer service and account management. The second option is to set up your website to enable the client to virtually build their ad campaigns themselves. This requires a great deal of website programming and database management online. For instance you would allow the user/client to choose the media format, the frequency and the budget before you even start managing the account.
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Check out how one full-service internet ad agency represents themselves by looking at their website at www.wspromotion.com. Pick-N-Click Advertising has gone one step further by allowing clients to access and build their advertising campaigns online. Learn more about how Pick-N-Click started and how the website works at bizjournals.com.

Create an Internet advertising agency

If radio, print and television hold up three corners of an advertising agency, then the fourth cornerstone would have to be the Internet. Companies are increasingly shifting their advertising dollars to alternative media, which means there’s a need for agencies that offer Internet advertising services.
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Make sure your Internet advertising practices uphold the truth in advertising, privacy and other regulations by checking out the “rules of the road” published on the Federal Trade Commission’s website. Check out clickz.com for information on Internet advertising, news, case studies and Internet advertising calculators. Find out more about what other online advertising agencies are offering at Business.com, where you can also find sources to help you navigate the basics of Internet advertising and search engine optimization.

Establish how you will introduce outsourced partners to your client ahead of time. The best way to brand your own agency is to provide each outsourced pro with a business card with your company name. This allows you to present yourself as a full-service company.
Many media outlets reward their repeat advertisers with luxury boxes at sporting events, tickets to sponsored events and trips. Make sure your media contacts present these offers to you rather than directly to your client. You should always be the direct line to your client. This gives you the opportunity to get face time with your client in an informal setting.
When you’re trying to reach top decision makers to gain clients, consider meeting them in an informal setting. Participate in or sponsor a local golf tournament. You’ll get invaluable face-time to build a rapport before you approach them for business.