Digital Marketing Agency
Asking Price: $1,500,000
Annual Revenue: $2,000,000
Annual Profit (SDE): $525,000
Business Type: Digital Marketing Agency (Performance-Based for E-Commerce Brands)
Client Billing: Retainer + ROAS Bonus
Location: Remote – U.S. and international clients
Executive Overview
This review dissects a digital marketing agency listed for sale. The firm focuses exclusively on e-commerce clients and delivers performance-based advertising and creative services through Facebook, Google, TikTok, and Klaviyo email campaigns. With an asking price of $1.5M and an SDE of $525,000, the business trades at a multiple of 2.86x well within the market average for service-based agencies with high client retention and clean SOPs.
This agency distinguishes itself by blending creative services, paid ad management, and revenue-linked compensation models. With over 30 active clients, strong lifetime value, documented client SOPs, and full-time staff in place, the business is acquisition-ready for an operator with digital marketing experience or a roll-up firm seeking bolt-on revenue in a hot niche.
Deal Structure & Terms
Asking Price: $1,500,000
Annual SDE: $525,000
TTM Revenue: $2,000,000
Profit Margin: ~26.25%
Sale Type: Asset Sale
Included Assets: Client contracts, SOPs, creative assets, domains, website, social profiles, email lists
Employees: 15 total (8 full-time, 7 contractors)
Client Base: 30 active e-commerce brands (U.S., Canada, U.K.)
Billing Model: Monthly retainer ($4K–$15K) + performance bonus
Retention: 78% year-over-year
Training Offered: 60 days, up to 40 hours
Service Breakdown
The agency sells full-stack performance marketing services. Each client receives a hybrid package consisting of:
Facebook/Meta Ad Management
Google Ads/PMax Campaigns
TikTok Ad Creative + Management
Email & SMS (Klaviyo) Lifecycle Automation
Landing Page CRO + Split Testing
Creative Direction & Ad Production
Billing model:
Clients pay a flat monthly retainer (starting at $4,000/month), plus a monthly ROAS kicker—typically 5–10% of all attributable sales beyond a 2.5x benchmark. The average client pays between $6,000 and $18,000/month depending on scope.
Client Mix:
90% DTC product brands in health, beauty, CPG, supplements, home décor, and apparel. Most do $1M–$10M in annual revenue. The agency works best with high-SKU product stores using Shopify, WooCommerce, or BigCommerce.
Financial Review
The agency’s $2M in annual revenue comes from stable, monthly client retainers and variable ROAS bonuses. The $525K SDE results from lean operations, remote staffing, and internal creative execution.
Cost Structure Breakdown:
Payroll & contractors: $950,000
Software: $36,000/year (ClickUp, Slack, Klaviyo, Google Workspace, AdEspresso, DashThis, etc.)
Rent/Office: $0 – fully remote
Advertising: $18,000/year (mostly retargeting and LinkedIn outreach)
Profit before owner salary: $565,000
Owner salary addback: $40,000
Client Payment Cadence:
100% of clients are on auto-bill. Agency invoices through Stripe and QuickBooks. Net 0 terms on all services. The average time to close a new deal is 18 days, and the average onboarding timeline is 10 days.
Client Tenure & Churn:
Average tenure: 14 months
Monthly churn: 4.8%
Quarterly upsell success rate: 38%
Revenue is lumpy due to performance bonuses but tracked in a real-time MRR dashboard maintained in Airtable and exported monthly.
Operational Overview
The business is fully remote and operates with 15 team members:
2 Senior Media Buyers
3 Junior Ad Specialists
2 CRO Analysts
1 Klaviyo Tech & Copywriter
2 Video Editors (contract)
2 Designers (contract)
1 PM
1 Account Director
1 Founder/CEO
The owner works 15–20 hours per week on business development, hiring, and complex campaign reviews. They do not directly manage clients. Every client is assigned a pod that includes a PM, media buyer, and designer. SOPs are detailed and stored in Notion. Each pod operates semi-independently with internal QA before reporting to the Account Director.
Project Management Tools:
ClickUp for task tracking
Slack for internal communication
Notion for SOPs & documentation
DashThis for client-facing performance dashboards
Google Drive for creative assets
Zoom & Loom for client meetings
Transition Plan
The seller is offering 60 days of post-sale support with up to 40 hours of structured transition work. This includes:
Staff introductions
Client intro calls or asynchronous handoffs
Team org chart with roles, KPIs, and performance review templates
SOPs for onboarding, reporting, and escalation
Templates for hiring, sales emails, cold outreach, and audits
The seller will also train the new owner on the ROAS tracking model, how bonuses are invoiced, and how to onboard new accounts using their 3-tier funnel testing process.
If needed, seller is open to a longer-term retainer (paid or equity) as Strategic Advisor, particularly if buyer is new to the media buying space.
Growth Opportunities
1. Expand to YouTube/Shorts:
Clients are already producing video content. Offering YouTube ad services using existing assets and cross-purposing could lift client revenue by 15% and allow upsells.
2. Cold Sales Team:
The business has grown via referrals and inbound SEO traffic. Building a commission-based outbound SDR team could drive 5–10 new leads per month.
3. White-Label Services:
Many web dev and branding agencies need media buying capacity. White-labeling services under NDA could generate bulk volume at lower CAC.
4. Productize Audit + Setup:
Selling a standalone “$999 Ad Account Audit” and “$2,000 Setup Sprint” would create tripwire offers to onboard small clients or test new verticals.
5. Expand to Non-Shopify Clients:
The business avoids Amazon, Etsy, and marketplace sellers. Building ad frameworks for those platforms could tap into 40% of DTC brands currently ignored.
Risk Factors
1. Talent Retention:
Media buyers and creatives are the lifeblood. Losing a senior media buyer could disrupt several accounts. Buyer must review employment agreements, NDAs, and retention bonuses.
2. Platform Dependency:
Meta and Google represent 85% of ad spend. Algorithmic changes, platform bans, or policy shifts could disrupt client performance.
3. Client Revenue Attribution:
Performance bonuses are based on tracked ROAS using attribution tools (Triple Whale, Hyros). These are imperfect and rely on client trust.
4. Economic Headwinds:
E-commerce brands are sensitive to consumer spending cycles. Ad budgets shrink fast in downturns, impacting agency cash flow within 30–45 days.
5. Owner as Strategic Anchor:
While not client-facing, the owner is central to new hiring, big-pitch sales, and crisis resolution. A passive buyer would need to insert an ops lead or fractional CMO quickly.
Ideal Buyer Profile
This agency is best suited for:
Digital Agency Acquirers: Those running web, branding, SEO or creative firms that need media buying to cross-sell
Media Buying Pros: Facebook/Google experts looking to own their own shop
Private Equity Roll-Ups: Firms consolidating service providers with performance-based pricing
Founder Operators: With operations chops and a desire to scale client services
This is not ideal for passive buyers or first-time entrepreneurs unfamiliar with digital ads.
Alternative Deal Structures
While the seller prefers full cash at close, several creative deal options exist:
Seller Note: $1.0M at close, $500K amortized over 18 months at 6% interest
Earnout: $1.2M at close, $300K tied to retention of top 10 clients and maintaining $175K/month revenue average for 6 months
Equity Rollover: Seller keeps 10% in New Co for advisory + deferred exit upside
SBA Loan Eligible: Given clean tax returns and service business status, deal may qualify for 7(a) with 10% down
Conclusion
This is a high-performing, process-driven digital agency with clean financials, a defined niche, and a proven client delivery engine. With structured teams, 30+ recurring clients, and performance-based billing, it offers both stable cash flow and scalable upside.
Deal Summary:
SDE: $525K
Price: $1.5M (2.86x multiple)
Client Quality: High LTV, low churn
Staff: Fully staffed, SOP-driven
Growth Capacity: High (outbound sales, upsells, white-label)
Transition Risk: Moderate (retain staff, establish leadership role)
For an experienced operator or agency buyer, this is a plug-and-play acquisition with six-figure profit and multiple expansion levers.
