Online Advertising Agency

How Profitable Is An Online Advertising Agency? (Updated for 2024)

Pat Walls

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Updated: October 9th, 2024

How Profitable Is An Online Advertising Agency? (Updated for 2024)

So you want to start an online advertising agency?

And the first question that came to your mind was, “well, are online advertising agencies actually profitable?”

With a market size of $399B - there’s plenty of business to go around.

Especially considering:

You could start a online advertising agency with as low as $20
Based on our data, online advertising agencies generate an average of $2.12M 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 online advertising agency.

Let’s dive in!

Is an online advertising agency profitable?

Yes, an online advertising 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 $2.12M per year with an estimated gross margin of 65%, 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 online advertising 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 online advertising agency is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is an online advertising agency worth it?

If you’re wondering if a online advertising agency is worth it, the answer is a big YES. With online advertising agencies, you have the potential to earn $2.12M 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 $399B, 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 online advertising 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 online advertising agencies case studies.

Examples Of Profitable Online Advertising Agencies

Here are a few examples of profitable online advertising agencies, and a few more details about them:

1. Fantôm Agency ($300K/year)

Luis Camacho, founder of Fantôm Agency, discovered his passion for digital marketing after starting a successful clothing line and utilizing social media for promotion. After gaining experience at a marketing agency, he decided to establish his own agency focused on paid advertising, which now earns approximately $8,600 per month.

Is it profitable? Yes
How much money it makes: $300K/year

My Story On Building My Own $8K/Month Digital Advertising Agency

Fantôm Agency founder Luis Camacho shares how he built his digital advertising agency from scratch, focusing on helping mid-to-late stage SaaS companies scale through paid advertising channels and generating around $8,600 per month without significant overhead costs.

Read this case study

Read by 14,491 founders

2. Strategus ($15M/year)

Joel Cox, co-founder of Strategus, came up with the idea for the advertising technology startup after recognizing the rise of digital streaming and targeted advertising. Cox saw the potential in programmatic OTT/CTV advertising and launched the first campaign in 2014. Today, Strategus generates $14.8 million in revenue and has been on the Inc. 5000 for three consecutive years.

Is it profitable? Yes
How much money it makes: $15M/year

How We Started the First Programmatic OTT/CTV Advertising Company

Learn how Strategus, an advertising technology startup, pioneered the first programmatic OTT/CTV advertising campaign and achieved revenues of $14.8 million in 2019, while serving Fortune 100 brands and agencies.

Read this case study

Read by 5,741 founders

3. Qnary ($6.6M/year)

Bant Breen, the Founder of Qnary, came up with the idea for his business while working as the CEO of a paid search and social media agency. He noticed that there were no tools available to help individual executives optimize their online presence, so he set out to create a platform specifically tailored to their needs. Since its launch in 2012, Qnary has grown to have thousands of clients and offices in New York, Barcelona, and Sydney.

Is it profitable? Yes
How much money it makes: $6.6M/year
How much did it cost to start: $1.2M

How I Started A $550K/Month Executive Online Reputation Management Solution

Qnary founder Bant Breen built and grew the executive reputation management and talent branding solutions company, now with thousands of clients globally, with a monthly revenue of $550k by developing a tech-enabled solution that optimizes an executive’s online presence, generates thought-leadership content, and grows followers and engagement.

Read this case study

Read by 7,995 founders

Learn more about starting an online advertising agency:

Where to start?

-> Online advertising agency plan
-> How to finance an online advertising agency?
-> How much does it cost to start an online advertising agency?
-> Pros and cons of an online advertising agency

Need inspiration?

-> Other online advertising agency success stories
-> Marketing ideas for an online advertising agency
-> Online advertising agency slogans
-> Online advertising agency names
-> Online advertising agency Instagram bios

Other resources

-> Online advertising agency tips

How much can you make with an online advertising agency?

With a online advertising agency, you can make an average of $2.12M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $20. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a online advertising agency make a week?

Based on our data, average weekly revenue for a online advertising agency ranges around $44.3K. As such, you could see monthly revenues of $177K.

To know if your online advertising 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 online advertising agency.

How much do online advertising agencies owners make?

The income of an online advertising 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 online advertising agency is about $44.3K. 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 an online advertising agency owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Online Advertising Agency Profit Margins

Generally speaking, an online advertising agency can expect profit margin of around 65%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of an online advertising 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, online advertising 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, online advertising agency owners can ensure long-term sustainability and profitability for their business.

Online advertising agency owner salary

The salary of an online advertising 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 online advertising agency, in a prime position, might see an average weekly salary around the ballpark of $28.8K.

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, based on many of our examples, a online advertising agency may be a promising business to start - but the success of your online advertising agency mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable online advertising agency.

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Starting An Online Advertising Agency: Everything You Need To Know

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