What is an Advertising Agency? : The Beginners Guide to a Profitable Online Business

The main component of promoting one’s business is advertising. And for this, companies hire some expertise in this field. It is known as an advertising agency.

The advertising agency is an agency that helps marketers in advertising or promoting their products. It is an independent firm made for the sole purpose of rendering special services to advertising companies.

It is a firm engaged in providing all the services regarding advertisements from making ads to putting them up on the television or other media platforms. It performs all the functions like planning, implementation of the campaign, research, follow-up advertisements, measuring the effectiveness of various media for the client.

These advertising agencies have a group of expertise helping companies or organizations to reach their target audiences in an easy and effective way.

An advertising agency can be a sole proprietor or a partnership firm. Just like a tailor, it creates ads, plans how and where it should be put, and hands it over to the client.

This should be noted that these are not agents in legal terms but are independent bodies handling advertisements in the newspapers, tv, and other media platforms on behalf of the advertisers.

Roles of an Advertising Agency?

The roles and functions of an advertising agency have evolved over time. They not only create advertisements for the companies but also plan and look after the whole campaign. Following are the roles that an ad agency takes up:-

  • Over the years the job of marketing agencies (advertising agencies) has changed a lot. They do not aid the media anymore but serve the advertiser. Earlier, these advertising agencies used to act as space brokers for the companies to the media houses such as newspapers. But today, they act as a consultant to the advertisers providing their services to their satisfaction. 
  • They create an advertisement on the basis of information gathered from the client, research, plan and implement the whole campaign and then deliver it to the client. Take feedback and then decide the further line of action.
  • The research staff helps the advertisers to build a better advertising campaign for the companies.
  • The basic assignments of the accounts are also managed by advertising agencies only. 
  • Checking the appearance of the advertisement in the media, checking invoices, managing bills, and looking after other official routines are some other roles that are taken up by an advertising agency.

This should be pointed out that companies can do all this work by themselves from creating ads, printing, and advertising then still why do they hire advertising agencies?

Here’s the answer:-

Since the advertising agency has got an expert team to perform various functions effectively. Also, it saves a lot of cost for the advertisers comparatively.

Types of Advertising Agencies

No two advertising agencies are similar. But they fall into one of the categories that we are going to discuss in detail. We’ll be discussing what are some of the common types of advertising agencies, what are their roles in providing services to the clients, and what is their use. So, the following are the most common types of advertising agencies:-

Full service advertising agencies

As the name suggests, this type of advertising agency just does anything and everything for the client. These agencies offer a wide range of services to fulfill both digital and traditional advertising aspects. These are large-sized having different expert people working in different departments. They provide services such as campaign management, tv advertisement, and social media management, radio commercials, print advertising, strategic planning, etc.

Digital advertising agency

This advertising agency uses modernized modes of communication for interaction with the audiences and determining what are their needs. They use online advertisements with new concepts in a very innovative and interactive way. While digital advertising agencies may know a thing or two about print media, their heart and soul lies with the digital world. They accompany you everywhere from Search Engine Optimization(SEO), social media marketing, web designing, content marketing, etc.

Creative Boutique

The creative boutique is an advertising agency that specializes in creative design. These agencies are developed for the sole purpose of creating and producing appropriate designs. They have very creative and innovative ideas for your advertisement. They perform no other than creating ads as these are small-sized agencies with their own directors, copywriters, and creative heads.

Media Buying Agencies

Unlike Creative Boutiques, Media Buying Agencies work with you to make use of your creative advertising material to the best use. They buy space for the ad and sell it to the advertisers. These advertising agencies schedule slots at different tv channels and radio stations. And then track if the advertisement was shown at the chosen time and place or not.

In-House Agencies

The in-house agencies are as good as full-service advertising agencies. They work according to the requirements of the organization that hired them. Large companies like to have integrated advertising agencies that work only for them.

Who is the target market for advertising agencies?

The most crucial part is to know what is the target market for an advertising agency. To start with, the clients for the ad agencies are mostly the companies, businesses, and corporations that lie within the agency’s marketing niche and are in a need of ongoing work. The client pays the agency a certain amount consistently and in return, the agency makes sure to set aside a fixed number of hours to work on the client’s campaign. 

This helps the advertising agency to make money out of the services they provide to the companies by charging a certain amount for creating, planning, and executing advertising campaigns. 

Benefits of starting an Advertising Agency

Living in the progressive world of today, it is important to walk hand in hand with the digital world. It is projected that the advertising agencies will generate a revenue of more than $40 billion by the end of 2021. While it is not at all a difficult task to start an ad agency, it has the potential to pay off big.

Here are some of the advantages of starting an advertising agency:-

  1. Low on startup and overhead costs.
  2. Large potential client base
  3. Scalability
  4. Less entry barriers


To sum up, advertising agencies are the need and demand of today. As we live in a fast pacing world, there’s a progressive race that we all are a part of. More and more ideas are creating space for more startups coming on the surface and as they thrive to compete with others, they need a strong promotional base for themselves which brings me to the fact that advertising agencies are the need of the hour. Getting yourself into this business will not only help you grow but also provide you exposure to the market helping you understand the basics of how the market works. 

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