Marketing agencies are attractive acquisition targets due to their recurring revenue models and scalable service offerings. Whether you run a digital marketing shop, full-service agency, or specialized boutique, understanding agency valuations helps you plan for growth or exit.
How Marketing Agencies Are Valued
Marketing agencies are typically valued using multiples of SDE or EBITDA, with larger agencies often valued on EBITDA and smaller shops on SDE.
Typical Marketing Agency Valuation Multiples
Marketing agencies typically sell for 2.5x to 4.0x SDE or 4x to 8x EBITDA, depending on:
- Revenue size and growth rate
- Client retention and contract structure
- Service specialization and market position
- Team depth and key person dependency
- Profit margins and operational efficiency
What Drives Agency Value
Buyers pay premium multiples for agencies with:
- Recurring revenue - Retainer-based contracts vs. project work
- High retention - Client relationships lasting 2+ years
- Diversified client base - No single client over 15-20% of revenue
- Strong margins - EBITDA margins above 15-20%
- Niche expertise - Specialized focus commanding premium rates
Common Value Detractors
These factors can reduce your agency's valuation:
- Heavy reliance on owner for sales or client relationships
- High client concentration or short contract terms
- Project-based revenue without recurring component
- High employee turnover or key person risk
- Commoditized services with low margins
What's your marketing agency worth?
Get a free estimate using our valuation calculator. Takes about 60 seconds.
Calculate My ValuationPreparing Your Agency for Sale
To maximize your agency's exit value:
- Transition client relationships from owner to account managers
- Build recurring revenue through retainer contracts
- Diversify client base and reduce concentration
- Document processes and build a strong management team
- Develop specialized expertise and market positioning
The marketing agency space continues to consolidate, with holding companies, private equity, and strategic buyers actively acquiring agencies. Well-run agencies with strong recurring revenue and clear market positioning command the highest valuations.