This is a brief guide on how to start an advertising agency in South Africa.
What is an advertisement
Before we dig into what an advertising agency is, we should first understand what an advertisement is. An advertisement is a notice or announcement in a public medium promoting a product, service, event or publicizing a job vacancy.
Role of an advertising agency
The primary role of an advertising agency is creating a marketing plan that is suitable for your business. Businesses often seek the services of an advertising agency when they are trying to promote a product or service. Marketing is very tricky and you can easily blow up your budget if you are not skilled in marketing.
That is why marketing agencies are important, a lot of marketing agencies have crucial data on consumer behaviour patterns. They have likely worked with a brand similar to yours, this makes it easier for them to understand your needs or goals and the best path to take to achieve them.
Bigger companies usually have a marketing team in place, but that’s not the case for a lot of smaller companies. A marketing agency has more access to data and resources that most smaller businesses don’t.
Services provided by an advertising agency
Advertising agencies have a lot of data and experience, they know what works and what doesn’t. Most ad agencies offer strategies to brands and businesses. A solid strategy makes it easier for a brand to penetrate the market, this strategy includes communicating the message of your brand.
Powerful designs make for an effective brand recognition. Some of these design services may include web design, brochures, a logo.
- Digital marketing:
Digital marketing has a whole list of services, these services include social media marketing, Google/Bing ads, SEO and utilizing other digital platforms to promote your business. Services include managing your brand image on social media.
This includes video and photographic productions. Most advertising agencies offer video animations and using video and photography to produce an advert.
- Public relations
Some advertising agencies offer PR services.
Start up costs of an ad agency
These are some of the start-up costs of an advertising agency. The start-up costs of starting an ad agency are minimal, this is because ad agencies provide services and not products. You might need operating premises for meeting with clients, it’s also possible to run this business from home. You can rent an office on as-needed basis, this will help you minimize your costs, especially when starting out.
The agency should have a computer for working on projects and an internet connection. A printer will be needed for physical for things such as pamphlets.
Labour requirements of an Ad agency
Fortunately, this is a business you can start completely on your own, you don’t need extra people. This will depend on the niches that you serve, if you will be serving different niches then you will to hire need different people who are skilled in those niches.
Labour usually accounts for the biggest expenditure for adverting agencies. You might need skilled web developers/ graphic designers, photographers, the list is long. You can also outsource some of these services each time you get a client. This will keep your operating expenses at a minimum.
Is an advertising agency profitable in South Africa?
An advertising agency makes money by creating and planning an ad campaign. Most ad agencies charge clients an hourly fee or commission. Advertising agencies can be very profitable, profits are largely influenced by the size of the agency and the different niches that the agency serves.
Permits and licenses
You don’t need any special documents to open an advertising agency, you will only be required to register your business. Registering a business costs R175 in South Africa. You only need permission when broadcasting live public events like soccer games, that’s something most ad agencies don’t do.
The target market for ad agencies is businesses. However, it’s difficult to get business to work with you if you don’t have any credentials. It’s best if you study a business, notice where you can be of value, then pitch your services to it. Don’t just pitch your services but pitch a concept of how you can help build their brand. That way they are likely to work with you.
Starting any business is not easy, you will need to have a lot of patience, you might also face difficulties with acquiring new clients. It helps to have an experience or knowledge of how this industry works before starting an advertising agency in South Africa. Do you have any thoughts or questions? Comment below.