Study Names Minnesota the Worst State for Digital Business Growth

DesignRush‘s exclusive state analysis revealed Minnesota as the least attractive state for digital business growth this 2024, with a Business Potential Score (BPS) of 55.7. 

With 1,144 agencies competing for a search volume of 254, Minnesota's market is highly saturated.  

The state’s low business potential can be attributed to the financial burden from taxes impacting the profitability of its digital businesses.

Minnesota faces a tax expense of $3.9 million, significantly higher than the national average tax of $2,157,000.

As a result, its tax efficiency sits low at 182% despite having a GDP of $471,820 million, making it a challenging environment for agencies to thrive.

Next to Minnesota are the states of Arkansas and Missouri, with 387 and 815 agencies respectively.  

Arkansas faces an average tax burden of $3,605,000 while Missouri has $4,127,000, making both states tough environments for digital marketing agencies.

Although Minnesota and Arkansas have a similar number of agencies, Missouri stands out due to market oversaturation, making its market highly competitive.

Missouri is an outlier, as the combination of business opportunities and tax efficiency has caused it to be pushed down the bottom three ranks.

Meanwhile, West Virginia tops the list of the hottest states for digital business growth in 2024.

For agencies already operating in these states, understanding the economic landscape is key to adjusting strategies and staying competitive in a challenging market.

Meanwhile, for new agencies, choosing the right location can be the difference between thriving or merely surviving in 2025’s competitive digital landscape.

Our Methodology 

Our latest findings help decision-makers understand key factors that can give their business crucial insights into the digital marketing industry.   

We began our research by assigning a BPS to each one based on three key metrics: 

• Business opportunities
• Tax efficiency
• Gross Domestic Product (GDP) 

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

The U.S. is home to 64,894 digital marketing agencies in 2024, valued at $366.1 billion.  

U.S. digital marketing agencies are expected to triple in value in less than a decade, with an estimated value of $1,029.7 billion by 2032.  

While its overall growth will continue to offer incredible opportunities for new and old agencies, our study demonstrates that not all U.S. states equally share the fruits of the budding industry.  

By pinpointing states with the best growth environments, companies can make well-informed decisions on where to invest, expand, or set up their agencies. 

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