DesignRush Unveils Hottest States for Digital Business Growth in 2024

Success within the digital marketing industry isn't always guaranteed, especially in the ever-changing U.S. business landscape.

While the explosive growth of the industry means more business and higher demand, some states present more opportunities than others, based on factors such as tax efficiency and GDP.

DesignRush released an exclusive list of the best and worst states for digital business growth in 2024, highlighting how well or poorly digital businesses are likely to perform in different locations.

DesignRush's findings revealed that West Virginia, Mississippi, Kansas, Alabama, and California came out as the top five states for digital business growth this year due to high business opportunities.

West Virginia, which sits at the top of the list, earned its position due to its low number of agencies, meaning less competition and more growth opportunities.

With a decent search volume score of 57, agencies in West Virginia also pay $792,000 less than the national average of $2,157,000. The state also has a GDP of $99.5 million, supporting a stable economic environment.

Meanwhile, Mississippi takes the number two spot, boasting a high search volume of 122, and an average task that’s $628,000 less than the national average. The state also has a tax efficiency of 71% and a GDP of $146.4 million.

Third on the list is Kansas, most notable for its impressive tax efficiency of 109% and a high search volume of 344 — signs of high demand and favorable tax conditions.

In fourth and fifth place are the states of Alabama and California.

With 370 agencies, Alabama boasts a search volume of 311 and a tax efficiency of 103%, indicating a strong demand-supply balance.

Meanwhile, California’s enormous market size is what keeps it in the top five, with a whopping search volume of 2,633 and an average tax, which is $559,000 less than the national average.

Meanwhile, Minnesota tops the worst state for digital business growth with a low search volume of 254, tax efficiency of 182%, and a score of 55.7.

Part of developing an effective digital marketing strategy to grow your business is knowing the advantages and disadvantages of your location.

Businesses with offices or branches in different states have the additional benefit of devising strategies that are more appropriate to a state's economic attributes.

The DesignRush Method

To identify the best and worst states, we assigned a business potential score (BPS) to each state, based on three key metrics:

• Business opportunities. This score is calculated as the ratio of digital marketing agencies per 100,000 population to search interest per 100,000 population. We gathered data from the American Community Survey (ACS) to get the population per state, Country Business Patterns to get the number of digital marketing agencies, and Google Keyword Planner to find search interest.
• Tax efficiency. This metric represents the percentage of taxes paid by a digital marketing agency compared to the national average. We used the Internal Revenue Service (IRS) SOI Tax Stats - State Data FY 2023 for state tax data and derived tax estimation for digital marketing agencies from the share of agencies out of the total number of companies. 
• Gross Domestic Product (GDP). This was gathered by state from the  Bureau of Economic Analysis GDP by State.

These three metrics are then normalized to a scale of 50-100. Each metric is weighed and averaged to create the overall BPS. 

States with the highest business potential scores represent states with better opportunities, while lowest-ranked states indicate poor business opportunities for digital businesses in 2024.

DesignRush General Manager Gianluca Ferruggia shared his thoughts on the findings of the study, noting that the report serves as a valuable resource for businesses in the highest and lowest-ranked states.

You can access the full dataset of the best places for digital business growth in 2024 here.

Editing by Katherine 'Makkie' Maclang