Sales & Marketing Tech

Types of Advertising Agencies and How To Choose One

By | 9 min read | Published

There are different ad agencies for each marketing strategy. Learn how to choose the right one for your business.

The earliest advertising “media” was word of mouth, which eventually took a back seat to newspapers between the 15th and 16th centuries.[1] Soon after, entrepreneurs founded ad agencies to serve as the “middleman” between businesses and newspapers. Fast-forward to today, and there are around 14,280 advertising agencies in the United States alone.[2] While some would argue that word of mouth is still king, many businesses use ad agencies to refine and diversify their marketing strategies.

But given the thousands of choices, how do you know which one will work best for your business? It depends on your strategy, target market, and the kinds of media you want to leverage. Another important factor is your company’s goals. For instance, you may be aiming to boost customer acquisition, bolster your brand identity, or launch a new product or service. Each of the types of ad agencies described below provides you with different tools to meet your objectives.

Types of advertising agencies

Even though each ad company has its unique strengths, most fall under one of the following types of advertising agencies. These agencies can also use advertising software, email marketing tools, and more to help your business achieve specific goals and reach your target audience.


Full-service advertising agency

A full-service ad agency does it all. They’re a good choice for a company that isn’t ready to commit to a certain kind of advertising and wants the creative leeway to experiment with different channels. This makes full-service agencies an ideal fit for businesses new to the advertising game.

Also, in the context of the typical ad agency definition, these firms operate as one-stop shops, providing clients with a range of services, including:

  • General ad campaign management
  • Social media management
  • TV ads
  • Content creation
  • Print ads
  • Search engine optimization (SEO)
  • Radio commercials

They also provide strategic planning to help you identify the most effective channel for your goals. For example, if your target market gravitates toward social media, but most of your ad spend is dedicated to print, a full-service agency can recommend how to balance your ad portfolio to maximize your investment.


Digital advertising agency

If you want to focus on digital campaigns and venture away from the print world entirely, a digital ad agency may be the best fit. Even though many of the concepts that power successful print ads carry over into the digital realm, a digital ad agency’s strength lies in helping you get the most out of the internet and other digital media. For example, with a digital advertising agency, you get:

  • Social media marketing
  • SEO
  • Email marketing
  • Web design
  • Content marketing

They can also help you balance a mix of several forms of media, as well as combine multiple types to help you get the most from each campaign. For example, a content marketing campaign can interweave:

  • Social media to help get your content in front of your target market
  • SEO to boost organic traffic to your content
  • Web design to ensure the most effective placement and layout for your content
  • Email marketing to attract customers on your email list to your content

Traditional advertising agency

A traditional advertising agency is, in some ways, the opposite of a digital one. But that doesn’t mean they lack innovation or are “stuck in the past.” In many cases, it’s the exact opposite: A traditional agency identifies new ways of maximizing the effectiveness of old ad media.

Common outlets for a traditional agency include:

  • Newspapers
  • TV
  • Radio
  • Magazines
  • Posters
  • Billboards

A good traditional ad agency understands how each of these channels can support your product, service, or brand identity. As the saying goes, “It didn’t matter which brush Picasso painted with.” Similarly, an effective traditional agency can produce impressive results with what some may consider “outdated” media.

This is because, despite the rise of digital advertising, traditional methods still work. In many cases, they also incorporate digital elements, such as QR codes on printed ads that take customers to your website or an online deal.


Social media advertising agency

Around 4.62 billion people use social media, and these agencies specialize in getting your product or service in front of this vast, diverse audience.[3] Popular destinations for your ad content include:

  • Twitter
  • Facebook
  • LinkedIn
  • Instagram

Even though the online social sphere is huge and diverse, a skilled social media ad agency can also ensure your ad content targets customers in specific areas. For businesses that want to pull clientele from the vicinity of their brick and mortar establishment—or those that want to target a demographic their offering may resonate with—geo-specific social media advertising services can get the job done.


Creative ad agency

A creative ad agency focuses on providing the creative services your company needs to produce winning ads. But, for many, creativity is their bread and butter, not marketing strategy. This makes a creative ad boutique a convenient choice if you:

  • Already know where you want your ads to be placed after they’re designed and produced
  • Understand the most effective channels to use and how to balance your spending between them
  • Have already planned your short-, medium-, and long-term marketing strategies

In other words, creativity, artistic skill, or content writing are the missing pieces—you have the rest covered.

By going with a creative ad agency, you can also save a good amount of money. The other types of ad agencies tend to charge more because they also provide strategic advice, much like a consultant. But if you have your strategy in place, you can simply hire a creative agency to provide top-notch ad content.


Media buying agency

A media buying agency is on the other side of the spectrum. They shine when it comes to strategizing where to place your ads and when. The placement and timing of your advertising can be as significant as its content, and a media buying agency understands the factors that contribute to a well-placed and timed campaign.

For example, suppose your target market is in Boston, and you approach a media buying agency for placement and timing advice in February. They may recommend that you time a billboard and public transportation ad campaign around the Boston Marathon, which would probably be in mid-April. They could also recommend that you use outdoor public transit stops along Commonwealth Ave. since the runners—and crowd—fill this street for hours on end during the marathon.

In addition, they could suggest that you grab a spot at the top of “Heartbreak Hill” since people congregate there to cheer on those that defied gravity and made it to the summit of the marathon. And to target as many spectators and support staff as possible, they may recommend you run the ad at least five days before and three days after the marathon.

Even though a media buying agency may not provide design services, they can help maximize its impact on your target audience.

How to choose the best advertising agency

Choosing the best ad agency boils down to finding one with a nice balance of experience and compatibility.

Ad agency experience

Experience is subjective; it doesn’t depend merely on how many years an agency has been in business. You want an agency that has experience with other companies in your industry, as well as with the kinds of advertising channels you expect to use.

There are several ways of identifying an ad agency with the right kind of experience, such as:

  • Asking for references, including marketing managers or executives of companies they’ve worked with in the past
  • Studying their portfolio of ads, particularly if you need design services
  • Requesting a data-based analysis of the success rate of their previous campaigns

You can also just sit down and talk. If you ask the right questions, you’re bound to learn a lot about the kind of experience they have and how it can work to your benefit. For example, you can pose questions like:

  • What do you do differently when working with a company in my industry as opposed to others?
  • If a competitor has a similar offering, what can you do to make customers more likely to purchase my product instead of theirs?
  • What’s one of the biggest mistakes your agency has made, and what did you learn from that experience?

If the agency you’re talking with balks at any of these questions, they may lack the experience you need to succeed.

Ad agency compatibility

Advertising often involves a lot of trust, and it’s hard to trust a company you don’t feel compatible with. At the same time, “compatibility” in this arena stems from their ability to empathetically listen to and convey ideas, not just be friendly. Compatibility also comes from how well an agency can work with your business model, communication style, and work schedule.

To test your compatibility with an ad agency, you can try any of the following:

  • Ask questions about how and when they communicate, including the channels they use, such as phone, text, videoconferencing, or online chat.
  • Talk about what you want from a campaign and how that interfaces with your business goals. During the discussion, focus on whether they actively listen or merely wait for their chance to talk.
  • Ask them to outline how their solutions can help you meet your business goals. This conversation should include success metrics and benchmarks the agency strives to meet in order to earn—and keep—your business.

Once you’ve found an advertising agency that has the right experience and seems compatible, you can pin down a strategy and let them get to work. Whether you want to go all-digital or take it back to the 16th century and stick with paper, the right agency can be the bridge between your offering and the customers you’ve designed it for.

Need to find out more about business advertising?

If you’re not quite ready to hire an advertising agency, or you’re still interested in exploring other options, Capterra offers an advertising agency software shortlist. Browse and compare the top tools, read through the reviews, and learn how to find the best solution for your business.


  1. Advertising Definition, History, and Objectives, Britannica
  2. Advertising Agencies in the U.S. — Statistics & Facts, Statista
  3. Global Social Media Statistics Research Summary 2022, Smart Insights

Looking for Advertising Agency software? Check out Capterra's list of the best Advertising Agency software solutions.

About the Author

Adam Carpenter - Guest Contributor

Adam Carpenter - Guest Contributor

Adam Carpenter is a writer and creator specializing in tech, fintech, and marketing.

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