What is a digital agency?

Traditionally, the word 'agency' in the business world refers to an organization that offers advertising and marketing for a particular brand. In the past, the focus of an agency has been representing the brand image on print, television, radio, and mail. Such agencies still exist, but they are now known as creative agencies. However, when consumers shifted online, businesses realized that they need to follow suit, and digital agencies were born.

What is a digital agency?

A digital company is concerned with both digital and print-related facets of a business. However, it focusses more on the online presence of your business and how consumers interact with it on every digital platform, which is called the online customer experience.

A digital company seeks to drive business growth through strategic decision-making about the online customer experience that your brand offers, be it an e-commerce website, a cellphone application, or an online forum for queries. It identifies areas of potential digital improvement and offers to overcome those weaknesses through technical development such as revamping your company website, creating a web app, or changing the direction of your social media marketing content.

In a nutshell, the marketing, branding, and advertising principles for business remain the same. A digital agency simply handles these aspects online from a digital perspective.

What does a digital company do?

A digital business helps streamline your brand image online to improve efficiency and maximize profits. This process can take different forms depending on the context-specific needs of a business (all businesses are not equal). Typically, a digital organization will:

  • Help identify areas of digital improvement. A digital firm will perform data analytics, comparative competitor research and look at past growth statistics to conclude where a business has fallen short and how these weaknesses can be digitally overcome to align your ideal buyer with your business model.
  • Boost ROI. A digital bureau will determine how to generate more traffic for your website and research the best digital platforms for business investment. It will continuously strategize, turning potential leads into paying customers. This efficiency boost translates into higher ROI and higher profits.
  • Show off your brand in the best way. A digital platform will tailor your buyer-focused website to attract the most customers, create content to connect better with them, and launch time-appropriate campaigns to inspire brand loyalty. Its goal is to utilize all available resources to help a business be able to lead with its best foot forward.
  • Refine marketing strategy. A digital office carefully studies your business to help you implement the most effective marketing techniques to tap into a new and unexplored reservoir of customers. It helps businesses expand their reach beyond what they thought was their target audience.

computer and coffee in a digital agency office

Why do businesses hire a digital agency?

The average user spends 6 hours and 42 minutes online, half of which is through the use of a mobile phone. Earlier in this decade, businesses noticed this and realized that they needed to shift their presence online to utilize the digital world for marketing, advertising, and retail. A business can handle the digital aspect of its operations in-house. However, most companies will hire a digital business that best understands the needs of this new, digital, and continuously changing market reality.

For most businesses, handling the digital aspect of their organization can be quite a challenge. Here are a few reasons why a business hires a digital firm:

Time-efficient & cost-effective
Businesses hire digital agencies because they want to remain on top of their game by staying up to date with the latest digital trends. Working with a reliable digital service provider will help most businesses save time and money by being able to access an entire pool of talented professionals, without having to hire each of them individually and bring them onboard. After all, it is very tricky and time-consuming to teach your employees how to implement marketing strategies such as SMM and SEO.

Helps overcome sloppy in-house digital management
Digital trends are constantly changing, search algorithms are continuously upgrading, digital platforms are rapidly expanding, and the tools required to maintain an active online presence are becoming more complicated to navigate through than they have ever been. Most small and medium-sized businesses struggle to handle their digital business needs in-house and realize that they need to hire a digital agency where a group of experts and professionals manage the digital equation of their business operations.

Helps avoid worrying about digital tools
Digital business operations also require a plethora of tools and services to be executed successfully. By hiring a digital service expert, organizations can avoid spending money on purchasing the tools and services needed to perform tasks such as keyword research, competitor analysis, paid search management, and run online campaigns because digital service providers already have them at their disposal.

Allows prioritization of other important tasks
Hiring a digital company spares businesses time and allows them to direct their energy and efforts to where they are needed the most. They find themselves being able to focus their attention better on more critical business operations. At the same time, a digital firm takes care of their company's digital facets such as website development, social media content, advertising, and retail aesthetic, to mention a few.

What services does a digital agency offer?

Digital Companies will typically try not to be 'everything for everyone.' Each digital company will offer its own set of specific services that a business can benefit from. Most digital platforms will specialize in their skills suited to a particular niche market, among other services that they offer. Meanwhile, other digital specialists may cater specifically to individual business types, business sizes, or a target audience category that businesses provide for. This technique helps digital service providers avoid being 'jack of all trades, master of none' by offering a few general services along with some focused regions of expertise.

Here are a few standard services that digital agencies will provide you with:

  • Mobile application development
  • Website and web-app development
  • Improving website/application design, responsiveness, and experience
  • Social media competitor research and strategy
  • Data signage
  • Data integration
  • Retail aesthetic and handling your e-commerce website
  • Analytics
  • Photography and video production
  • Intranet and internal application creation
  • Online advertising (paid searches, banner advertisements, and online brochures)
  • Online marketing campaign management
  • SEO and SEM
  • Brand strategy and design
  • User experience research
  • Counsel for accessibility of website services
  • Digital strategizing for improving customer experience

digital agency office

Choosing a digital Organization

The goal of a business owner is to choose a digital organization that offers the maximum possible number of high-quality digital services that best cover business needs (all under one roof). Business owners will typically compare different digital company products and services with their company's priorities to understand which one can be the perfect one-stop solution for their business.

How can a digital agency stand out?

A digital firm needs to stand out from the crowd if it wants to be able to survive in the cut-throat competition that is the hallmark of the digital industry. The most important place to start is by outlining clearly defined goals and a combination of company values that are unique to your digital organization. Everything from that point onwards is all about tying loose ends!

Here are a few tips that can help digital houses overcome the obstacle of standing out from the rest:

  • Choose a particular niche. Narrow down the products and services you offer. Focus more on providing a few specialized services as opposed to several generalized ones. Remember that if your digital company website page has very generic "about us" and "what we do" landing pages, potential customers are most likely to get confused and not opt for your services. If you want to be able to cut through the crowd, you will want to sharpen your agency's skills in a few selected areas. This technique helps your digital business gain the expertise and confidence that it needs to land clients.
  • Be authentic. Businesses are looking to hire reliable digital firms, have a credible work history, and are known to deliver results. You will want to present yourself as a trustworthy and authentic digital firm if you seek to stand out. You can do this by making sure that your website and advertising material clearly outlines your industry experience, areas of expertise, what awards your digital bureau has won (if any), how long you have been working for, and what your existing or past clients have to say about you and your work.
  • Have a unique selling point. Maybe your digital organization differentiates itself from the market competition through low-priced service bundles, or it is known to focus on interactive content (quizzes, infographics, or polls), or maybe several influencers have testified to your digital company’s exceptional services. Your digital platform needs a unique selling pitch that convinces clients that you are different from other agencies, even if you are new.

How do digital agencies make money?

Each digital service expert business will make money based on its pricing model.

Hourly Fixed Rate

A fixed amount of money is charged per unit of an hour worked by the digital firm. The client has to make the payment either after the entire project is completed or at regular intervals while work is still being done. Alternatively, the digital company may estimate the hours of work required to finish implementing the digital work plan and request a partial advance. The hourly payment method is the oldest and the original pricing model used by both creative and digital platforms to charge businesses for the services.

Commission Pricing

The commission-based pricing model is more suitable for businesses seeking to hire a digital agency for a particular project (for example, a digital marketing campaign) as opposed to outsourcing all their digital business operations. The digital organization earns by keeping a percentage of the money invested in the project as their fees for completing the task. The commission-based pricing method works best for big projects that capture the interest of the digital bureau and pay well too.

Retainer Pricing

Digital agencies looking forward to working long-term with clients will typically opt for the retainer-based pricing model. With retainer-based pricing, the client pays the digital company a fixed amount of money every month or every few months for their services. This payment method helps the digital office ensure that there is clear cash flow as long as they can deliver results.

Value Pricing

A value-based pricing model is one where the digital organization calculates the monetary benefits that the business will yield by availing the agency's services. The value is determined to be the net increase in the profitability of the business (performance, sales, and results), followed by the client and digital branch negotiating the cost of services.

How to manage your digital agency?

Managing a digital branch is challenging, especially if you are new to the industry and are struggling to get noticed.

Here are a few tips for handling your digital agency better:

  • Communicate expectations clearly. Businesses keep changing digital service providers because they fail to deliver what they promised. You don't want to be a digital branch that falls short of expectations. In your digital work plan, be realistic about projected results for your clients and communicate what you can and cannot do for them.
  • Budget strategy. As with any agency in the market, your goal should be to create value for your clients while minimizing your internal costs. Construct appropriate budget plans for each client or project and stick to it! Adopt healthy financial practices such as keeping track of ROI from expenditure, having an annual budget planning approach, and avoid further outsourcing tasks.
  • Team structure. Have a clear team hierarchy within your digital organization where each department has its own set of duties neatly outlined. Too often, digital organization experience departments merging and over-relying on each other under the guise of collaborating. This weak structure overburdens some departments more than others—Reserve cross-functional teams for specific projects only.

Key takeaway

Running a digital company requires a keen sense of understanding clientele needs, creating value for end-of-line consumers, offering specialized services, and having an original brand strategy that stands out. It is a mutually profitable model that benefits both the digital business involved and the businesses that form their client base (regardless of which pricing method is used).


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