Social media marketing agency (SMMA) services are in high demand as more businesses realize the power of social media for reaching customers. As an SMMA, you can make good money helping brands with social media management, advertising, and strategy. Here’s an overview of SMMA services, typical pricing models, and income potential.
What is an SMMA?
A social media marketing agency is a business that offers social media-related services to other companies. Typical services include:
- Social media strategy – Developing plans for platforms, content, engagement etc.
- Social media management – Posting content, monitoring accounts, interacting with followers.
- Social media advertising – Setting up, optimizing and managing paid ads.
- Reporting & analytics – Tracking KPIs and preparing reports on effectiveness.
- Consulting – Advising on best practices, trends and innovations.
SMBs and enterprises hire SMM agencies to handle their social media so they can focus on core operations. It allows them to leverage social media experts versus having in-house marketing staff.
Who is the target market?
The target clientele for most SMM agencies includes:
- Small businesses – Local shops, restaurants, professional services.
- Mid-size companies – Established firms with up to 500 employees.
- Enterprise brands – Large corporations and multinational companies.
- Startups – New companies looking to build brand awareness.
- Nonprofits – Charities, foundations and associations.
The specific services and pricing will vary based on the size and needs of each client. But the core offering is leveraging social expertise to help brands connect with current and potential customers.
How do SMMAs charge for services?
There are a few common pricing models used by social media marketing agencies:
Monthly Retainers
With monthly retainers, clients pay a fixed fee each month for a set bundle of services. For example, a $1,500 retainer could include 20 hours of community management, 5 scheduled posts per week and 2 boosted posts per month. The monthly fee provides reliability for both the client and agency.
Packages
Packages allow clients to pre-purchase blocks of services at established rates. A starter package may be $500 per month for basic management, while a premium package is $2,000 monthly for expanded services. Packages can be customized based on each client’s needs.
Hourly Rates
Some SMM agencies bill clients by the hour for services, such as:
- Strategy consulting – $125/hour
- Social media management – $80/hour
- Ad management – $100/hour
- Reporting & analysis – $150/hour
Hourly fees allow maximum flexibility but can add up quickly. They work best for one-off projects versus ongoing services.
Flat Monthly Fees by Platform
With this model, the agency charges a flat rate per month per social platform. For example:
- Facebook management – $1,000/month
- Instagram management – $1,000/month
- Twitter management – $500/month
- TikTok management – $750/month
The flat rate could cover a defined set of services, like daily posting, monitoring and engagement. This allows clients to pick and choose the platforms they want.
Commission on Ad Spend
Some agencies charge a percentage commission on the amount spent on social media advertising. For example, they may charge 20% of total ad spend. This model incentivizes the agency to maximize advertising performance. It’s common among ad agencies and firms focused on paid social.
The pricing model an SMMA uses depends on their services, expertise and target market. Many use a combination of packages, retainers and hourly fees. The goal is balancing profitability with providing value to clients.
What are the costs to operate an SMMA?
When starting an SMMA, you’ll incur certain launch and ongoing costs such as:
- Software – Social media management tools, analytics, project management etc. Can be $50-$300+ per month.
- Employees – Salary, benefits, payroll taxes for staff like account managers. Expect $40k-$60k per employee.
- Professionals – Freelance content creators, graphic designers, videographers. Budget $50-$200 per piece of content.
- Office space – Rent, utilities and other overhead if running an office. Around $1,000-$3,000 per month.
- Insurance – General liability and errors & omissions coverage. $100-$300 per month.
- Other – Advertising, legal, accounting, taxes, travel, training etc. Budget several thousand per year.
Total monthly costs for a new agency can easily reach $10,000 to $20,000+ depending on services offered and team size. The goal is for revenue to exceed expenses so the business is profitable.
What is the earning potential?
The income potential for an SMMA can be quite strong given the high demand for services. Here are some revenue and profitability benchmarks to consider:
Average Client Revenue
On average, SMM agencies charge $1,000 to $5,000 per month per client. High-end agencies working with large brands can charge $10,000 or more.
Average Profit Margins
Profit margins for successful SMM agencies typically range from 30% to 50%. This means 30-50 cents of every $1 in revenue flows to the bottom line as profit.
Average Revenue Per Employee
Benchmark to generate around $10,000 per month in revenue for every employee. So with a team of 5, monthly agency revenue would be around $50,000.
Average Owner Salary
Owners of profitable SMM agencies often pay themselves salaries of $60,000 to $150,000 per year. Some are able to earn $200k+ after a few years in business.
The table below summarizes average earning potential for SMMA owners:
| Annual Revenue | Annual Profit | Owner Salary |
|---|---|---|
| $500,000 | $150,000 | $80,000 |
| $1,000,000 | $300,000 | $120,000 |
| $2,000,000 | $700,000 | $200,000 |
These are approximate averages, but illustrate the strong monetization potential. Salaries over $300k+ are possible for highly successful agencies billing over $5 million annually.
Key tips to boost SMMA income
Here are some proven tips to maximize your earnings potential as a social media marketer:
- Offer high-value strategy consulting for premium fees of $200+/hour to enterprise brands.
- Upsell clients into premium packages with expanded services.
- Sell ad management services and earn commissions on ad spend.
- Build retainers into monthly contracts to secure recurring revenue.
- Develop automation processes using tools like Hootsuite, Sprout Social and Buffer to scale.
- Focus on high-profit services like consulting versus just handling social accounts.
- Build a referral network with related professionals that send business.
The most lucrative agencies dive deep rather than wide – gaining mastery in a niche or with specific platforms like TikTok. They target premium positioning over volume.
What is the income potential for solopreneurs?
You can certainly build a successful SMMA as a solopreneur. Here are realistic income targets:
- Getting started – $2,000 to $4,000 per month. Enough to quit a part-time job.
- Gaining traction – $6,000 to $10,000 per month. A solid full-time income.
- Hitting stride – $12,000 to $20,000 per month. Excellent for a solo business.
For many, the path is to start solo while working a side job for security. Once the business matures after 1-2 years, it can replace other income.
Keys to Success as Solopreneur
Some tips for maximizing income on your own include:
- Offer a niche service like TikTok marketing to stand out.
- Limit clients to what you can handle as one person (typically under 10).
- Use tools like Hootsuite and AI writers to automate and scale.
- Outsource content creation – videos, graphics, writing.
- Avoid taking on too many ad accounts as one person.
- Raise rates over time as you gain experience and results.
A solo SMMA takes diligence to build, but can be extremely rewarding and profitable over time.
Conclusion
Launching a social media marketing agency allows you to capitalize on the demand for professional management while earning strong income. Most SMMAs charge monthly retainers in the $1k to $5k range per client. Profits for successful agencies reach 30% to 50% after expenses. Owners can realistically earn over $100k within a few years of growing their business.
For solopreneurs, monthly income potential realistically ranges from $2k to $20k. But it requires focus on profitable services, niche expertise and leveraging tools to be efficient as a one person shop. With a strategic approach, both small and large SMM agencies can earn sizable profits helping brands succeed on social media.