Picking a niche is something many agency owners don’t do until decades into the business. When starting out, agencies tend to take on every client that comes their way to increase their client base and generate much-needed revenue. Although effective initially, diluting your agency’s services can lead to burnout and lack of direction.
We’ll look at how a focused approach targeting verticals or narrowing your services can help you grow your agency and hear from others on how they picked a niche for their marketing agency.
This article covers:
6 Reasons To Find a Niche for Your Marketing Agency
We all want to ‘do all the things.’ But unless your agency is a large, established enterprise with hundreds of clients and multiple supporting departments, carving out a niche is often the way to go if you want your marketing agency to fulfill projects and strategies more effectively and provide a stronger ROI.
Let’s take a look at six reasons why agencies should find a niche.
1. Your Agency Becomes the Perfect Fit
When your agency chooses a niche, you can talk the talk and walk the walk in a way that “Jack of all trades, master of none” agencies can not. Because of this, clients will see your agency as the perfect fit.
There is less of a learning curve when it comes to niche-specific jargon, technical knowledge, competitive awareness, and benchmarketing when onboarding new clients because your agency has already built many of these fundamentals.
Clients prefer an agency that truly understands their business, their industry, and their target market. By proving that you can do so, they will also be more loyal to your agency because they know they’re being taken care of by the best–even if that comes with a premium fee.
Keeping clients happy all boils down to providing seasoned, professional experience that brings about profitability–which translates to retaining your hard-earned clients.
2. Naturally Grow Your Expertise
Picking a niche is a great way to build a name for your agency as the go-to option. Although this might not be the case in the early days, over time, your agency can create the right knowledge base to prove your expertise in that space.
This can include web content, webinars, videos, industry presentations, and more–all within your niche. This also comes with networking opportunities (think industry-specific conferences) and allows you to keep refining your knowledge base by building upon your past experience. In this case, it really is about who you know and what you know.
3. Getting New Clients Is Made Easier
Lead generation for your agency is easier when you create a unique solution to a specific problem. Need examples of past work in your proposals? Choosing an industry vertical will give your agency the only track record it needs to get more clients. Almost everything your agency does becomes relevant to convincing new clients within your niche to partner with you.
The right clients will flock to your services and inherently trust that you know your stuff if you offer a solution to their exact problem. There is also a greater chance of increasing referrals to your agency.
AudSEO, a digital marketing agency for hearing healthcare, says they work almost 100% on referrals.
While digital agencies often think that they should be utilizing digital, we have found that when your market most needs your services, and you have developed a good reputation, you don't need to do a lot of marketing. This does not mean there isn't a place for it, but your number one lead source should be referrals. If it's not, you're doing something is wrong. - AudSEO
There is also more opportunity to specialize in sub-genres of your niche vertical. Take Health Care, for instance. Related industries continually crop up with new health fads and popular culture.
This brings us to the next point…
4. You Gain a True Competitive Edge
Having a specific area of expertise makes it easier to identify the smaller group of competitors in that space. Knowing your competitors will help you analyze how your agency stands out and help you convince potential clients why you’re the better choice.
"I believe that if you try to do everything, you'll be an expert at nothing. I wanted to do great work, which meant focusing and specializing,” says Rod Arnold, Co-Founder of LeadingGood, whose agency services the non-profit space.
Whether you’re late in the game or a new agency owner making this vital decision, picking an area of specialization will differentiate your agency and make your offering better than the competition.
5. You're Always On Top of the Latest Trends
Marketing changes very quickly, making it more challenging to optimize your marketing strategy for each of your clients. Agencies should also keep tabs on State laws and regulations, which affect the types of new businesses that crop up. Many of which will be seeking marketing services in a particular field. Adapting to booms in business by specializing in online services in a specific sector can make your agency a first-mover in the field and amass new clients faster.
"Marketing for the cannabis industry provides a very unique opportunity to not only generate revenue but to also do good in the community. There are so many different ways cannabis can help society, and we hope to shed as much light as possible on those areas,” says John Shute, Founder of PufCreativ. But keeping track of changing policies is also essential. "We have to implement unique marketing strategies, and they change very frequently due to the lack of cannabis advocacy on Google and Facebook,” he adds.
Offering too many areas of services can cause an agency to lag behind the changing times. When there are industry-wide changes affected by politics, algorithms, or online behavior, you’ll be quick to adapt within your niche. This will also protect your agency in the long term, as you’ll better be able to predict external factors and prepare to make adjustments to your business.
6. It’s Repeatable & Scalable
When you focus on a single vertical, your strategy becomes scalable as you already have a roadmap ahead of you. A proven plan allows agencies to quickly and easily onboard new clients and deliver quick wins.
You’ll also have the time and resources to personalize your marketing strategy for each client’s needs. Scalability is especially important for performance-based digital agencies that need to prove the growth they provide for their new clients. Mike Gualtieri, VP of WSI Comandix, explains that “once you’ve built proven processes, new clients can reap the benefits by your team replicating a proven system to demonstrate performance, versus having to learn and trial things from scratch in an area of unfamiliarity."
Examples of Digital Marketing Agency Niches
If you’re wondering how to find a niche for your agency, let’s start by getting an idea of what types of niches are out there.
This category of agency niches is based on the types of services your agency provides. It can be in any industry, but your team will be specializing in one (or more) select areas of marketing, such as:
Of course, various services revolve around the above, so you can position yourself as a full-service social media agency, for instance, providing everything from creating Instagram reels to managing their paid social media ads on Facebook.
Agencies like Australia-based social media agency OhMyDigital choose to keep their verticals open but keep their services specialized, like in the social media sector.
This niche type focuses very much on a particular industry in the real world. Aka, businesses in specific areas of work will be seeking your services and require your level of expertise for marketing to consumers in that vertical.
Examples of verticals for marketing agencies are:
Cherie Dickey, SEO Team Lead at Smile Marketing, a marketing agency focusing on dental websites, explains how many different factors impact Google search results for their clients. These factors include the practice location, nearby competitors, and the dentist's online reputation. "A dental practice's website needs to build trust with potential patients and position them as an authority in their field,” she adds.
In verticals like the legal sector, there are different laws in every state and a lot to keep on top of. “Lawyers appreciate the fact that we know the legal industry and have other attorneys writing their content that know the bar rules, ethics, practice areas, etc,” explains Chris Gerspacher, Co-Founder of FirmFinder.
Lastly, niching down by geography means that you only serve local businesses. It can be a bonus differentiating factor between your agency and the competition. Your agency might even include your city in its name, boosting its relevance in search. Plus, focusing on offering a local service lets you tap into hyper-local tactics to grow your agency such as local schema markup, reputation management, and Google Local Services Ads.
But that does come with the risk of narrowing down your client base too much, particularly if your agency is in a smaller market.
Agencies can combine the above when niching down further—for example, doing Social Media Agency for Realtors or SEO in HealthCare. Whatever you’re good at will be what floats your boat–just make sure you do your research, as we’ll see in the next section.
How To Choose Your Agency Niche in 6 Steps
If your agency has been in the game for a while, you might be getting more clients in a particular industry vertical. That’s one helpful place to start. If you’re looking to narrow down your services and pick a vertical (or two), there are several steps you should take:
Identify Your Interests and Passions
Identify Problems You Can Solve
Research Your Competition
Determine the Profitability of Your Niche
Test Your Idea
Narrow Down Your Niche Even More
Let’s go through these decision-making factors and see how some agencies picked their niche.
1. Identify Your Interests and Passions
The first and most logical step is to get together with your core marketing team and discuss your agency’s core skills and interests. If you’re stuck, start by brainstorming:
Your agency’s strengths and weaknesses
What marketing services your agency enjoys providing the most, and which tend to bring on the most success (and vice-versa)
What niches your agency could enter, given your strengths
This brainstorming session will uncover the initial pros and cons of choosing a niche. It’s important to focus on the problems you can solve, which are usually centered around the core competencies of your marketing agency. Keep in mind that these are the problems you can solve for clients, not internal agency roadblocks like not having enough dedicated experts within your team.
For example, perhaps your agency’s CEO studied law for three years before making a career change–which would be an excellent reason to pick lawyers as a potential niche.
The external problems are more likely to be industry-based, like “there’s just too much competition,” which we will discuss in Step 3.
The goal of the brainstorming session is to generate new ideas. Your team can be great at writing content and increasing organic search traffic for clients, but you might need more SEO clients to branch out and grow your agency.
You might decide that it’s all about Social Media for you but need to hire another PPC campaign manager to deliver Facebook Ads campaign results at scale. Alternatively, you might decide to be full-service but tailor your services to a particular industry vertical like Health Care or Automotive or a particular location based on where your agency is based.
Now it’s time to take your ideas and see what problems you can solve for your potential clients.
To kickstart the conversation, ask yourself and your team these three questions:
What are we great at?
What are we passionate about?
What would we never get tired of learning more?
“Like many agencies, we were doing a bit of everything and anything when we first started out five years ago! We learned pretty quickly which areas of digital marketing we loved and which ones just didn't light us up,” comments Hayley Peters, Co-Founder at OhMyDigital, on why they chose their niche.
Hayley and her partner chose to go with their talents and passion when choosing a specialization, adding, “social media (both organic and paid) have always been our specialty, so this is where we chose to niche, service-wise.”
2. Make Sure There’s a Market for Your Niche
You know already that the most important thing in marketing is demand. Now that you have a list of potential niche ideas to assess, it’s time to figure out if there’s a problem that needs solving–or, in other words–is there a market for my niche?
Let’s take a look at three ways to gather your intel.
1. Part of your research should come from industry insiders. Do some field research online and in person by seeking out potential clients in your desired niche. You can ask them if they’d agree to an idea-extraction session to discuss:
What problems do they need to solve for their business
Their business goals and how they could use marketing to get there. Get a sense of the size and revenue
What does their current marketing agency fall short of, if they are already using one
Do they have particular areas they’d like to expand in their marketing initiatives
2. Look at online forums like Reddit and Quora, where people field their complaints about specific issues and take a look at the challenges and solutions being offered in their industry.
3. Do some keyword research with your niche’s keywords and see what words and phrases are suggested. Then narrow ensure it fits the criteria in the following three categories:
Search Volume: 1K-10K per month - Unless you are focussed on a hyper-local approach, anything less won’t give you enough lead generation opportunities. Any more, and it’ll be too hard to rank for and leave you lost in a sea of competition.
Competition: Low-Medium - The word or phrase competition in AdWords will give you a similar idea of how competitive it is in organic search. Alternatively, plug in your keywords in Semrush and see what websites come up and how the keyword fares from a Keyword Difficulty perspective.
Suggested Bid: Medium-High - Low commercial intent tends to be highlighted by lower bids, so don’t go the cheap route on this one. Pick a keyword that people are willing to pay for because this tends to mean it’s worth it. Even if you don’t end up running paid ads for your agency niche, this is a good indication of the opportunity within this space.
Tools: Google Keyword Planner, Semrush
3. Research Your Competition
Once you have an idea of the marketing agency niche you’d like to explore, it’s time to learn from your competitors.
How big are competing agencies?
How are they structured?
What are their rates?
Where are they located?
How do they position themselves online?
Are they a direct competitor?
Do they have excellent reviews?
Answering these questions will help you position your agency against them by highlighting your agency’s strengths in areas where the competition falls short. It’s also a great point of reference to see if you can narrow down your niche further, giving you ideas to laser-focus your services. But more on that later.
Take a competitor’s website as an example and see what keywords come up on their page. They’ll likely uncover one of three things:
1. There are no other niche marketing agencies ranking for those keywords. This might indicate an opportunity, but it could also mean that there’s no market for this niche.
2. There are some other smaller sites ranking for these keywords, or they are mostly low quality. This is a good sign that the niche holds an opportunity worth pursuing because there is some market for it with low competition.
3. There are loads of well-known sites already ranking for those keywords. This is where the bar is already set very high, and an oversaturated market is difficult and costly to penetrate. If this is the case, you may need to drill deeper into a sub-niche, e.g. Geography + Vertical, or Vertical + Speciality, such as Dental SEO or Los Angeles Law Firm Marketing.
Tool: Google Search Volume
4. Test Your Theory
Marketing and testing go hand in hand. This time, you’ll be doing some serious experimenting for yourself, not your clients. But before you go further and spend time creating a whole new website, start with a landing page to see whether you’re on the right track.
One way of testing your potential niche is to promote a free resource related to your niches, like a How-To marketing guide for small businesses in your niche or a free site evaluation. (Hint: Take advantage of this Site Auditor tool to deliver a comprehensive SEO health report in minutes).
Another thing you can do is create an ideal customer profile for your niche and set up an online survey to gather intel. This attempt at gathering information on your niche’s pain points can also double as a lead generation tool, chock full of contact information from potential clients.
You can also create a couple of test projects to make sure that the current team is up for the task. After all, you don’t want to say that your agency specializes in Shopify SEO, and then the team struggles with how to execute that promise.
5. Passion Over Profitability–What’s Your Stance?
Once you have a better idea of your potential niches, it’s time to compare their profitability and whether or not that type of work will make you and your agency happy.
Some agencies choose their niche based on passion. “Concentrating our focus on yoga and wellbeing businesses has enabled us to be much clearer about what we offer and how we can help people,” shares Hannah Moss of WildHeart Media, whose Co-Founders chose to narrow down their focus to yoga, a niche that they are both passionate about.
Sometimes, you don’t choose your niche: it chooses you. The CMO at MergerLabs, a marketing agency for M&A and Private Equity, shares their experience on how they picked a niche: “Our founding team came from the space, so the issues the industry experienced were our own day-to-day issues. The agency ended up starting out of sheer demand rather than intent. Our clients saw what we accomplished as their contemporaries and started paying us!”
If you’re on edge, calculating whether or not your agency has the budget to fully execute a new niche and be profitable is a start. Look at external factors like:
Will this niche give me enough new opportunities if it is in a particular industry?
Is the niche a sustainable source of income for clients to require marketing services?
Does my marketing team enjoy doing this type of work, and
Do they want to excel in it?
What is the risk that this particular niche could dry up in the near future?
It’s a big mistake to choose a notoriously lucrative niche if you don’t have any expertise in it already. Or to choose one that doesn’t bring your team any joy. It’s important to find a balance between what your agency is good at–and wants to get better at–rather than pick an area just based on the opportunity to profit.
6. Narrowing Down Smart
One pitfall of finding a niche is keeping it too broad. Another is narrowing it down too much. There’s a fine line between niching down and closing yourself off to new opportunities. When picking a niche, one rule of thumb is to use a level of sensitivity to new trends and movements within a chosen niche.
Take the Health and Wellness vertical, for instance. It has its traditional mainstay clients like doctors and dental offices seeking online marketing. But it also evolves around newer health and beauty trends, with new businesses like yoga studios and microblading offices seeking online marketing services from agencies.
Tools & Resources for Finding a Niche Market
Finding a niche for your agency requires some market research. Luckily, you’re already well aware of the tools you can use to help your search.
1. Google Keyword Planner
Use this tool to identify problems in your niche, and see how the competition is faring. Alternative keyword research tools can be found inside Semrush, Moz, Ahrefs, and more.
2. Google Trends
Keep a finger on the pulse of what’s happening around the world–and in the world of your industry sector. Check Google Search volumes for your–and your competitors’ keywords, and identify new keyword and specialization opportunities.
3. Google Marketplace
You’ll need fast tools to optimize your agency’s website and grow your client base in your niche.
4. Online Surveys
Use the power of social science to create online surveys that you can share with your network to get industry insights.
5. Local Business Associations
There are local marketing associations out there that can help you with resources and help you grow your business.
6. Social Media
Get the info straight from business professionals in your niche by creating polls on platforms that are popular with your potential target (such as LinkedIn).
Niching down doesn’t mean closing yourself off to new opportunities. There are many ways to branch out within your area of expertise. Plus, you can add niches as your team masters them as part of your agency’s growth plans. It’s worth niching down–or niching up–as long as you niche the right way.
And, of course, every growing agency needs to save time on manual tasks that eat up your agency’s resources. Automating your data-retrieval and client reporting processes gives your team more time to build and maintain the expertise your agency needs to be the leader in that niche.
Like this article? Read Choosing a Niche for Your Agency: 10 Experts Succeeding in Their Niche for more insights.