Average Profit Margin For Marketing Agency

Marketing agency owners make on average $87,000 a year. The marketing business makes $4,000 for every client that comes through their door. Find out more about the top industry trends affecting marketing agency owners and how to grow your business today.

In this guide, we review the Average Profit Margin For Marketing Agency, how much do marketing agency owners make, average profit margin recruitment agency, and how much does a marketing business make.

Average Profit Margin For Marketing Agency

The average profit margin for marketing agencies varies depending on a number of factors. These can include:

the industry you’re in (i.e., tech vs. retail)

the number of clients you have (i.e., one large client vs. 20 small ones)

Businesses come in all sizes, industry types and have varying marketing objectives and needs. There is no one single definition of “profit margin” or “average marketer” that applies to every business.

Businesses come in all sizes, industry types and have varying marketing objectives and needs. There is no one single definition of “profit margin” or “average marketer” that applies to every business.

Agencies are a unique beast when it comes to the average profit margin for marketers because they provide an infinite amount of services for clients at different price points and levels of service. Some agencies are profitable for completely different reasons than others, which is what makes it so difficult to pinpoint an exact number for how much money we should be making on our clients’ campaigns (and why we’re always looking for ways to improve our margins).

By definition, profit margin is a metric used to measure the profitability of a business.

In the context of a marketing agency, profit margin is defined as:

  • The difference between what a company pays for its products or services and what it charges for them.
  • A ratio that’s calculated by dividing net income by sales. It’s the amount of money a business makes after all expenses have been covered (or paid). Profit margins can be calculated on an individual basis or applied to entire companies as a whole.

When discussing profit margins pertaining to a business, it’s often expressed in terms of a percentage by subtracting total cost from total income (sale price) of goods sold or services rendered, and dividing that result by the costs.

When discussing profit margins pertaining to a business, it’s often expressed in terms of a percentage by subtracting total cost from total income (sale price) of goods sold or services rendered, and dividing that result by the costs.

For example:

$1,000 sale price – $75 production cost = $925 profit margin = 92.5% profit margin

The above calculation shows that for every dollar spent on producing goods or providing services, there was almost $1.05 created in profit.

Marketing agencies are different than most businesses out there. Why? They don’t sell products or services with tangible prices. Instead, they help clients with their advertising, branding, analytics and overall growth strategies. This can vary from one client to the next.

Marketing agencies are different than most businesses out there. Why? They don’t sell products or services with tangible prices. Instead, they help clients with their advertising, branding, analytics and overall growth strategies. This can vary from one client to the next.

In this article we’ll talk about what it means to be a marketing agency in 2019 and how that differs from other types of businesses out there today. We’ll also touch on how you can achieve higher profits by becoming an agency yourself!

Because marketing agencies potentially provide an infinite amount of services for clients at different price points and levels of service, some agencies are profitable for completely different reasons than others. For example, is your agency more profitable because you have fewer clients that pay a lot for service? Or do you have a lot of smaller clients that collectively put you in the black? We’ll explore this further below.

While some agencies are profitable because they have a large number of clients paying lower amounts for services, others find themselves in the black because they manage fewer clients who pay higher amounts. In either case, it’s important to be aware that profitability is relative and dependent on many factors—which we’ll explore below.

The average marketing agency can vary from month-to-month depending on factors like the amount of time spent on client work, overhead cost and strategy implementation expenses such as social media advertising spend or other outsourced contractors working with your firm on specific projects.

  • The average profit margin for marketing agencies will vary from month-to-month based on factors such as the amount of time spent on client work, overhead costs, and strategy implementation expenses such as social media advertising spend or other outsourced contractors working with your firm on specific projects.
  • You might have a higher profit margin one month than another. This can happen if you were able to complete more client projects in that particular month than usual, or if you were able to negotiate lower costs from certain vendors (such as printing or photography).
  • You might also have a lower profit margin one month than another—this happens when you’re taking longer than usual for each project because there is an unusually high number of revisions being requested by clients during this time period, or if there are so many new hires that aren’t yet fully trained in productivity best practices (and therefore require more labor hours per project).

how much do marketing agency owners make

How much does an Agency Owner make?

As of Jan 2, 2023, the average annual pay for an Agency Owner in the United States is $98,664 a year.

Just in case you need a simple salary calculator, that works out to be approximately $47.43 an hour. This is the equivalent of $1,897/week or $8,222/month.

While ZipRecruiter is seeing annual salaries as high as $190,000 and as low as $25,000, the majority of Agency Owner salaries currently range between $55,000 (25th percentile) to $125,000 (75th percentile) with top earners (90th percentile) making $167,500 annually across the United States. The average pay range for an Agency Owner varies greatly (by as much as $70,000), which suggests there may be many opportunities for advancement and increased pay based on skill level, location and years of experience.

Based on recent job posting activity on ZipRecruiter, the Agency Owner job market in both Lagos, NG and throughout the entire state of is not very active as few companies are currently hiring. An Agency Owner in your area makes on average $98,215 per year, or $449 (0%) less than the national average annual salary of $98,664. ranks number 1 out of 50 states nationwide for Agency Owner salaries.

To estimate the most accurate annual salary range for Agency Owner jobs, ZipRecruiter continuously scans its database of millions of active jobs published locally throughout America.

What are Top 10 Highest Paying Cities for Agency Owner Jobs

We’ve identified 10 cities where the typical salary for an Agency Owner job is above the national average. Topping the list is San Jose, CA, with Jackson, WY and Oakland, CA close behind in the second and third positions. Oakland, CA beats the national average by $18,589 (18.8%), and San Jose, CA furthers that trend with another $19,783 (20.1%) above the $98,664 average.

With these 10 cities having average salaries higher than the national average, the opportunities for economic advancement by changing locations as an Agency Owner appears to be exceedingly fruitful.

Finally, another factor to consider is the average salary for these top ten cities varies very little at 4% between San Jose, CA and Norwalk, CT, reinforcing the limited potential for much wage advancement. The possibility of a lower cost of living may be the best factor to use when considering location and salary for an Agency Owner role.

CityAnnual SalaryMonthly PayWeekly PayHourly Wage
San Jose, CA$118,447$9,870$2,277$56.95
Jackson, WY$118,137$9,844$2,271$56.80
Oakland, CA$117,253$9,771$2,254$56.37
Vallejo, CA$115,033$9,586$2,212$55.30
Hayward, CA$114,729$9,560$2,206$55.16
Seattle, WA$114,628$9,552$2,204$55.11
Santa Barbara, CA$113,836$9,486$2,189$54.73
Barnstable Town, MA$113,754$9,479$2,187$54.69
Sunnyvale, CA$113,407$9,450$2,180$54.52
Norwalk, CT$112,808$9,400$2,169$54.23

What are Top 5 Best Paying Related Agency Owner Jobs in the U.S.

We found at least five jobs related to the Agency Owner job category that pay more per year than a typical Agency Owner salary. Top examples of these roles include: Owner Operator Team, Fleet Owner Operator, and Owner Operator.

Importantly, all of these jobs are paid between $31,517 (31.9%) and $131,106 (132.9%) more than the average Agency Owner salary of $98,664. If you’re qualified, getting hired for one of these related Agency Owner jobs may help you make more money than that of the average Agency Owner position.

Job TitleAnnual SalaryMonthly PayWeekly PayHourly Wage
Owner Operator Team$229,770$19,147$4,418$110.47
Fleet Owner Operator$196,015$16,334$3,769$94.24
Owner Operator$151,873$12,656$2,920$73.02
Senior Technical Product Owner$132,985$11,082$2,557$63.94
Digital Product Owner$130,181$10,848$2,503$62.59

average profit margin recruitment agency

There’s no doubt that annual profit is an important metric in business success. However, to measure the real profitability of your recruitment agency, you need to look beyond the bottom line. To see how your business compared to other recruitment agencies in FY18, divide your total profit by the number of full-time employees (or full-time equivalents). The correlation between these metrics will help you understand how your team stacks up against top performers – and how to bridge the gap.

The difference between average and outstanding

Figures just released from the Staffing Industry Metrics show a staggering difference between recruitment agencies when it comes to average profit per person. Figures from over 100 Australian recruitment agencies indicate that the top 10% of agencies outperformed others by more than double in FY18. Recruitment agencies with 10 or fewer employees FY18 was a tough year for small teams, with high staff turnover impacting results. The average profit per person was $48,233 – 7% less than the prior year, despite buoyant market conditions. However, the top 10% of small agencies bucked this downward trend by increasing annual profits by 5%, averaging $119,791 profit per person. Over a 3-year period, the average profit per person for small agencies is $49,371. If your agency averaged $110,000 or more, you’re tracking extremely well.

Recruitment agencies with 11 to 20 employees

As teams grow, it becomes more challenging to match the profit per person metrics of smaller agencies. For those with between 11 and 20 employees, profit per person has been increasing over recent years, reaching an average high of $38,703 in FY18. Again, the top 10% of agencies stood head and shoulders above the rest, averaging $75,203 per person – a 16% increase from FY17. The 3-year average for these agencies is $35,869. If your average sits above $70,000, you deserve a pat on the back!

The #1 way to increase your agency’s profitability

If your recruitment agency profit isn’t performing as well as you’d like, consider sharing these stats with your team. In most recruitment agencies (and businesses in general), there’s a reluctance to share the key metrics. However, when people learn how your business works, they also learn how to help. Being transparent about your numbers can help increase engagement, efficiency and motivation. Share these figures with your staff and encourage everyone to strive for that top 10%!

how much does a marketing business make

At a high level without getting into a ton of detail, the amount of money a digital agency or freelancer helping clients with digital marketing earns will depend mostly on what type of clients you’re serving.

If you’re serving small businesses then you’re going to be doing just as much work as you would for a larger business, but you’re going to get paid less for it. Your clients probably won’t have an ad budget, and they’re unlikely to have the industry recognition to win any awards related to your work.

I’ve never worked for an agency that serves clients this small, but the retainers I’ve heard quoted for businesses in this price range are around $2,000 – $4,000 per month, per client. Of course, subtract expenses from that figure before calculating profit.

You’ll also likely encounter more project work than steady retainers, as most small businesses can’t afford to pay any level of retainer for digital marketing. A steady stream of projects means that agencies working with small businesses need to close sales faster and more often. To do this effectively, they’ll probably need to hire sales staff, even if it’s only one overworked guy. This further reduces the profit these small accounts can bring to the table.

If you’re serving SMBs and smaller corporations then you’ll make more money per client. Probably somewhere in the $8,000 – $10,000 per month, per client range. These accounts will be harder to land, especially when you’re first starting out. The more clients like these you’ve worked with in the past, the more credibility you will build.

Lastly, if you’re a serious agency that only works with large and exceedingly wealthy corporations, you can command upwards of $15,000+ per month, per client. A speaker at Inbound 2015 in the partner track mentioned today how his agency will not take a retainer below $15k minimum, and the client must also pay for 6 weeks of discovery while the client account is being on-boarded with the agency. Obviously to command this type of income you’ll have to have built a reputation for delivering outstanding results far above what the average and even many above-average agencies can provide.

As you can see, there’s a wide range to how much money you can earn. I’d say that ideally you want to be in one of the last two categories (and realistically probably in the 2nd one). I would expect that as an agency that serves small businesses exclusively or primarily that you would always be struggling and your margins would be very weak.

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