The combined market for search engine optimization (SEO) and social media marketing (SMM) is not only massive but also growing at an astonishing rate.
With nearly $50 billion being added to these markets every single year, the opportunities for agencies are abundant.
As a seven-figure agency owner who started in 2016, I’m here to help you decide whether an SEO or SMM agency is the right path for you.
Understanding the Basics: SEO and SMM
Before we dive into the specifics of each type of agency, let’s ensure we’re on the same page about what SEO and SMM entail.
SEO: The Long-Term Investment
SEO is all about improving visibility on search engines, primarily Google. It’s like getting noticed in a crowded room. When someone types a query into Google, you want your website to show up. SEO is an investment in a business’s future, as it pays dividends over the long term. Once a website establishes trust with Google and starts receiving traffic, it becomes easier to maintain and improve that traffic.
SMM: The Short-Term Solution
SMM, on the other hand, focuses on using social media channels like Facebook or Google pay-per-click to improve visibility through ads. While SMM can generate traffic quickly, it lacks the long-term snowball effect of SEO. Once you stop paying for ads, the traffic stops coming. However, SMM is excellent for achieving immediate, short-term results.
Learning Curve and Fulfillment
Both SEO and SMM are straightforward and fairly easy to learn, but mastering either one takes time and practice. The good news is that you don’t need to be an expert to get started. In fact, you’ll learn much faster by doing rather than theorizing.
Thanks to AI tools like ChatGPT and Google Gemini, both SEO and SMM can be run as a one-person business until you have five to 10 clients. AI is particularly helpful for SEO, as it can assist with content creation, which was once a time-consuming and expensive aspect of the business.
Profitability and Scalability
SEO Agency Roles
In an SEO agency, one of the key roles is an AI content editor who generates and refines AI-created content. The editor’s focus is on adding uniqueness and fact-checking the AI’s output. Other essential roles include a website developer, link builder, and potentially a client manager once you reach 20-30 clients.
SMM Agency Roles
For an SMM agency, the critical roles are slightly different. You’ll need an ad buyer to manage social media accounts, set up campaigns, and optimize performance. An ad creative person will write ads and create images, while a client manager becomes necessary around 15-20 clients due to the higher frequency of meetings and larger budgets involved.
Gross Margins and Pricing
With the help of AI, an SEO agency should have a gross margin of around 60-70%. SMM agencies, not including ad spend, can achieve slightly higher gross margins of 70-80%. SEO agencies typically price their services based on scope, such as a fixed number of articles per month with optimization and link building. SMM agencies, on the other hand, often price based on ad spend, with a management fee that scales with the client’s budget.
Choosing the Right Path for You
When deciding between starting an SEO or SMM agency, consider which type of service aligns more with your personal values and beliefs. It’s much easier to sell and provide a service that you genuinely believe in. Ask yourself: if you were hiring an agency and could only afford one, which would you choose?
In most cases, it’s best to focus on one type of agency until you have a large enough team to handle both. Personally, I chose SEO because I appreciate the long-term benefits and the momentum that comes with ranking a site. Additionally, I find SEO easier to execute and demonstrate results, especially with the help of AI.
Taking Action: Landing Your First Client
Regardless of which type of agency you choose, the most important step is to go out and land your first client. Your first client will be the hardest to acquire, and it may be uncomfortable, but every subsequent client will become easier.
Starting as a freelancer and using your agency as a side hustle is often the best approach. Aim to land a couple of clients and generate \$1,000 per month while keeping your full-time job, then grow from there. Upwork is an excellent source for finding your first client, and I personally built my seven-figure SEO agency almost entirely through the platform.
For those interested in working with local businesses, joining the Chamber of Commerce and attending every event can be a highly effective way to build a successful agency.
Prioritizing Client Acquisition
Don’t let ancillary tasks like filing business paperwork, creating a website, or designing business cards distract you from the most important aspect of starting an agency: getting someone to pay you for your services. These tasks can easily delay your progress, so focus on landing your first client, then handle the other details once you’ve achieved that milestone.
Embracing the Abundance Mindset
With the SEO and SMM markets growing at such a rapid pace, there are plenty of opportunities for new agencies to succeed. A six-figure agency represents just 0.002% of the annual growth in these spaces. Embrace an abundance mindset and choose the path that resonates with you, then focus on acquiring your first client.
If you found this post helpful, please like and share your thoughts in the comments. Stay tuned for my next post, where I’ll discuss the top seven services you should offer as an SEO agency, including pricing guidelines.
Leave a Reply