Free agency tool
Marketing agency valuation calculator
Value your agency the way a buyer does. Normalize the earnings, read the multiple for your size, and see exactly which factors raise or cut the price.
A marketing agency is worth a multiple of its normalized earnings: about 2.5x to 3.5x SDE for an owner-run agency under $500,000 of adjusted EBITDA, rising to roughly 4x to 7x adjusted EBITDA once earnings pass $1 million. Recurring revenue, client concentration, owner dependence, margin and the quality of the books move the multiple up or down from there.
Earnings
Earnings history
Revenue quality and concentration
Transferability
Diligence readiness
Balance sheet at close
- Enterprise value
- $1,752,060midpoint
- Range
- $1,436,689to $2,067,431
- Multiple
- 2.87xof SDE, 3.98x of adjusted EBITDA
- Equity value
- $1,752,060about $1,349,086 at close, 77% of the price
Revenue quality, concentration and transferability are in a range buyers can underwrite without heavy discounts.
| Earnings a buyer multiplies | Amount |
|---|---|
| Agency gross incomeRevenue minus pass-through | $2,600,000 |
| Seller's discretionary earningsProfit plus owner pay, add-backs, depreciation and interest | $610,000 |
| Adjusted EBITDASDE minus a market salary for the owner role | $440,000 |
| Earnings valuedValued on the trailing twelve months. Add prior years to see how a buyer reads the trend. | $610,000SDE |
| Valued onAdjusted EBITDA is 16.9% of gross income | SDE |
| What moves the multiple | Effect |
|---|---|
| Base multiple for your sizeAverage-quality agency with the same SDE | 3.01x |
| Service typeFull service or integratedAn integrated offer is priced on its revenue quality rather than the discipline. | 0% |
| Revenue qualityRecurring revenue shareContracted retainers are revenue a buyer can forecast. | +2.3% |
| Revenue retentionMost of last year's revenue renewed, which is what a buyer is paying for. | 0% |
| Revenue growthSteady growth is neutral; consistent acceleration earns more. | +2% |
| Average client tenureTypical tenure for an agency book; longer earns a premium. | 0% |
| ConcentrationLargest client shareNo single client can take the year with it. | -2.4% |
| Top five clients shareRevenue is spread across enough clients to absorb a loss. | -2% |
| TransferabilityOwner share of deliveryThe team runs delivery without the owners on every account. | -2% |
| Owner share of new businessSomeone other than the owners can bring in new clients. | -3.3% |
| Second-tier leadershipSome leads in place, but the owners still hold key decisions. | 0% |
| ProfitabilityAdjusted EBITDA marginAround average for an agency; above 20% of gross income earns a premium. | -0.5% |
| SpecializationA recognizable focus, not yet a clear niche. | 0% |
| Diligence readinessFinancial reportingMonthly accrual close with margin per client is what buyers expect. | 0% |
| Client contract terms60 to 90 day notice periods give a buyer time to keep the account. | 0% |
| Years in businessA multi-year record lowers perceived risk. | +1.2% |
| Quality adjustment, compounded | -4.7% |
| Adjusted multiple | 2.87x |
- Put a full leadership team in place+$140,165
- Bring the largest client under 12%+$105,744
- Own a clear niche+$87,603
| From price to proceeds | Amount |
|---|---|
| Enterprise valueCash-free, debt-free, with normal working capital | $1,752,060 |
| Net debt repaidDebt cleared at close, net of cash above normal | $0 |
| Working capital versus normalDelivered $250,000 against a normal $250,000; aged receivables excluded | $0 |
| Prepaid client workCost to deliver work clients already paid for, at 60% of the fee | $0 |
| Equity value | $1,752,060 |
| Paid at closeThe other 23% of the price arrives as earnout or seller note | $1,349,086 |
Planning estimate, not an appraisal or offer. The range is ±18%, wider when books are less reliable or earnings swing from year to year.
How buyers value a marketing agency
Open any row for the numbers behind your result.
How it worksHow is a marketing agency valued?Five steps, from earnings to price
Buyers do not multiply revenue. They rebuild your earnings, choose the right earnings figure for your size, and price the risk that those earnings will not survive the sale.
Seller's discretionary earnings is pre-tax profit plus everything paid to working owners, documented add-backs, depreciation and interest. Adjusted EBITDA subtracts a market salary for the owner's role. If this year is a spike above the three-year trend, buyers price closer to the weighted average.
Under $500,000 of adjusted EBITDA, buyers price SDE, because the buyer usually steps into the owner's job. From $1 million, they price adjusted EBITDA. In between, the calculator blends the two so there is no cliff.
Larger earnings earn a higher multiple because the risk per dollar falls. The base multiple comes from a size curve for an average-quality agency.
Fifteen factors across service type, revenue quality, concentration, transferability, profitability and diligence readiness scale the base up or down. Each is a percentage premium or discount, and they compound.
Enterprise value is earnings times the adjusted multiple, on a cash-free, debt-free basis. Your proceeds subtract net debt, settle working capital against its normal level and deduct the cost of work clients prepaid. The range widens when the books are harder to trust.
MultiplesWhat multiple does an agency of your size sell for?Base multiples by earnings
| SDE | Base SDE multiple |
|---|---|
| $100,000 | 2.0x |
| $250,000 | 2.6x |
| $500,000 | 2.9x |
| $1,000,000 | 3.3x |
| Adjusted EBITDA | Base EBITDA multiple |
|---|---|
| $250,000 | 3.0x |
| $500,000 | 3.5x |
| $1,000,000 | 4.2x |
| $2,000,000 | 5.0x |
| $3,000,000 | 5.8x |
| $5,000,000 | 7.0x |
| $10,000,000 | 8.5x |
The SDE curve follows what marketing agencies list and sell for on BizBuySell. The EBITDA curve sits in the lower half of the bands M&A advisors publish, because advisors report the deals that closed well. The best agencies clear the top of each band. See the sources.
Value driversWhat raises or lowers an agency's multiple?Fifteen factors, up to about 55% up or half off
| Factor | Premium when | Discount when | Effect |
|---|---|---|---|
| Service typeService type | Data, analytics and martech; paid media; SEO | Brand and creative; web projects | -6% to +8% |
| Recurring revenue shareRevenue quality | 80% or more on retainers | Under 50% | -15% to +10% |
| Revenue retentionRevenue quality | 95% renewed | Under 75% | -15% to +6% |
| Revenue growthRevenue quality | 20% or more a year | Shrinking | -25% to +10% |
| Average client tenureRevenue quality | Five years or more | Under 18 months | -6% to +5% |
| Largest client and top fiveConcentration | Largest under 10%, top five under 30% | Largest over 25%, top five over 55% | -40% to +5% |
| Owner delivery and sellingTransferability | Owners do little delivery and close few deals | Owners do a third of delivery or close most deals | -30% to +5% |
| Second-tier leadershipTransferability | A team runs departments | No one below the owners | -8% to +8% |
| Adjusted EBITDA marginProfitability | 25% of gross income or more | Under 10% | -15% to +8% |
| SpecializationProfitability | A clear niche | Generalist | -4% to +5% |
| Financial reportingDiligence readiness | Reviewed or audited accrual | Cash basis, reconciled yearly | -8% to +4% |
| Client contract termsDiligence readiness | Twelve-month terms | Month to month | -4% to +5% |
| Years in businessDiligence readiness | Ten years or more | Under three years | -12% to +3% |
Service typeWhich agency services sell for higher multiples?Measurable, recurring work sells for more
| Service type | Effect on the multiple |
|---|---|
| Data, analytics and martechAnalytics, CRM and marketing technology work is the most sought-after agency capability, and it is sticky once implemented. | +8% |
| Paid media and performanceResults are measurable and spend recurs, so buyers can see what the client gets for the fee. | +4% |
| SEO and contentCompounding, retainer-led work with measurable results that clients rarely switch mid-program. | +4% |
| Full service or integratedAn integrated offer is priced on its revenue quality rather than the discipline. | None |
| PR and communicationsRetainer-led but relationship-heavy, so buyers price it on the team that holds the media contacts. | None |
| Social and influencerPublished multiples for social agencies sit level with or above digital marketing overall, so the discipline is priced on its revenue quality. | None |
| Web design and developmentProject revenue ends at launch unless a support or growth retainer follows. | -5% |
| Brand and creativeCampaign and project work has to be resold every year, and the talent is easy to lose. | -6% |
Worked exampleWhat is a $3,000,000 agency worth?The calculator's starting agency, line by line
| Agency gross income | $2,600,000 |
| Seller's discretionary earnings | $610,000 |
| Adjusted EBITDA16.9% of gross income | $440,000 |
| Valued on | SDE |
| Base multiple for its size | 3.01x |
| Quality adjustment70% recurring, largest client 18%, owners close 60% of new business | -4.7% |
| Adjusted multiple | 2.87x |
| Enterprise value | $1,752,060 |
That is 0.67x of gross income. Its most valuable lever is to put a full leadership team in place, worth about $140,165 at the midpoint. The full method is in how marketing agencies are valued, and the concentration discount is explained in client concentration risk.
SourcesWhere do these multiples come from?Published deal data
| Source | What it reports |
|---|---|
| How to value a digital marketing agency in 2026FE International, May 2026 | EBITDA multiples by size: 2.5x to 4x under $500,000, 3x to 5x to $1 million, 4x to 6.5x to $2.5 million, 5.5x to 8.5x to $5 million and 7x to 12x above. SDE of 2x to 4x for owner-run agencies. A client at 30% to 40% of revenue costs 1.5x to 2x of multiple and moves 25% to 40% of the price into an earnout. |
| How to value an agency businessFE International, March 2026 | A founder who is the main rainmaker or client contact costs 15% to 30% of value. Recurring revenue is worth 25% to 40% more than project revenue. |
| Marketing agency EBITDA multiples and valuationsFirst Page Sage, January 2025 | Average EBITDA multiples for ten agency types in three size bands. Digital marketing: 4.9x at $1 million to $3 million, 6.1x at $3 million to $5 million and 9x at $5 million to $10 million. Creative and branding run below it at the smallest and largest sizes, and social media runs above it at every size. |
| Marketing and advertising businesses for saleBizBuySell, Listings as of October 2026 | Asking prices of 2.48x, 3.10x and 3.76x SDE and 0.57x, 0.95x and 1.44x revenue at the lower quartile, median and upper quartile, on a median SDE of $214,233. |
| Business valuation multiples by industryBizBuySell, Sales from Q3 2021 to Q2 2026 | Sold prices: 2.61x SDE on average for service businesses and 2.72x for graphic and web design businesses. |
| What market ready really means for selling a professional services firmTobinLeff, 2026 | What agency buyers look for: no client above 15% to 20% of revenue, adjusted EBITDA margin of 20% to 25% and client churn under 10% a year. |
Advisor ranges describe completed deals they chose to publish, and BizBuySell listing multiples are asking prices. Sold prices run lower, so the calculator sits toward the low end of both.
Questions
How is a marketing agency valued?
As a multiple of normalized earnings, not revenue. Small owner-run agencies are priced on seller's discretionary earnings, usually around 2.5x to 3.5x. Larger agencies with a management team are priced on adjusted EBITDA, roughly 4x to 7x from $1 million of earnings and higher above $5 million.
What is the difference between SDE and adjusted EBITDA?
SDE adds all owner compensation back to profit, so it shows what one owner-operator takes home. Adjusted EBITDA deducts a market salary for whoever does the owner's job, so it shows what the business earns without the owner. EBITDA multiples are higher because the number being multiplied is smaller.
What revenue multiple do marketing agencies sell for?
Buyers price earnings, so revenue multiples vary widely. As a cross-check, most agency values fall between about 0.4x and 1.5x of agency gross income, which is revenue minus pass-through media and vendor costs. Two agencies with the same revenue and different margins are worth very different amounts.
How accurate is this agency valuation calculator?
It follows the method buyers and M&A advisors use, with size curves and factor weights checked against published multiples from M&A advisors and marketplace sale data, listed under Sources. It cannot see your contracts, your buyer or the market on the day you sell, so treat the range as a planning estimate, not an appraisal or offer.
What raises an agency's valuation the fastest?
Usually repricing retainers that run under a healthy margin, because it lifts earnings and the multiple at once. Next come moving owners out of delivery and sales, reducing the largest client's share through new business, and moving to monthly accrual books. The calculator ranks your three most valuable levers.
Run the numbers a buyer will ask for, every month.
Verbial shows margin per client from contracted revenue and absorbed labor cost, utilization by person and department, and retainer pacing, so diligence is a view, not a spreadsheet rebuild.