AGENCY EXPANSION: Reborn in the USA

For every UK consumer agency that has cracked the US, there are several that have failed. But with big money accounts on offer across the Atlantic, the lure is strong. Robert Gray reports.

NYC and LA, the Big Apple and Tinseltown, Gotham and La-La Land. Familiar by their initials and multiple nicknames, these two great metropolises dually symbolise the American Dream, attracting ent­repreneurs and opportunists by the million, all determined to make their mark.

Few places on earth are as dynamic and competitive. As the Frank Sinatra classic has it, if you can make it there, you can make it anywhere and the challenge has proved compelling to a number of PR agencies.

Freud Communications, Exposure and The Red Consultancy are among the UK consumer shops that have expanded into the US in the past few years and a number of their peers are poised to follow suit. Others have weighed up the risk and thought better of proceeding.

This raises the question, how do you maximise your chances of success on the other side of the pond?

‘If you can't open an office on the back of your current client base, you should go for an acquisition to give yourself some mom­entum,' advises Keith McCracken, regional director, North America at business adv­iser Results International. ‘If you are opening an office in an expensive, well-populated market you need to do it with client support and blessing.'

McCracken, who has personal experience of launching businesses in New York, says it is essential to staff the office with middle management capable of running the shop and replicating the culture and USP of the original agency. Senior management also need to be act­ively involved but, he argues, agency bosses must be mindful not to focus so much on the new office that they weaken ‘the mothership'.

Several UK agencies have considered New York expansion but have for the mom­ent stopped short. Frank PR managing director Andrew Bloch says he has thought about it ‘fleetingly' but prefers to concentrate on UK opportunities for now, while Shine Communications founder Rachel Bell is wary because of the high risk of ent­ering such a competitive market.

Meanwhile, Covent Garden-based agency Threepipe recently set up a job swap with NY agency Southard Comms. Threepipe co-founder Jim Hawker went to Manhattan last year for a week to shadow senior staff and learn how business is conducted there, with the eponymous Bill Southard coming to the UK earlier this year.

Hawker feels a move into New York would be very risky. ‘It's hard enough to set up a successful agency in a city when you live there. You have to beg, borrow and steal clients just to get set up. If you have no personal connections in a new city then forget it.

‘Finding entrepreneurial people is also difficult. People will tell you they are entrepreneurial but
really good ones are hard to find. It's also incredibly difficult to trust someone else to set up an extension of your own blood, sweat and tears - especially if they are thousands of miles away. New York is littered with the gravestones of failed British agencies.'

For any agency considering such a move, Hawker suggests they use a serviced office for the first few months to keep a tight leash on money and provide a res­pectable and central base from day one.

Cunning Communications has been in NYC since 2004 and now employs a team of eight, servicing clients such as NBC, L'Oreal, HSBC and Toyota. It set up because its owners saw an opportunity in the non-traditional comms area not add­ressed by the larger agencies.

‘Many have great ideas, few have the ability or flexibility to make the ideas happen,' says Mark Voysey, who runs Cunning US. Among the adv­antages of having a US office, he says, are cross-cultural learning, client introductions and delivery of international work.

Now defunct agency TheFishCanSing had a New York office with a staff of six for two years. ‘In terms of funding, you need to have a limited, guaranteed client base over there,' says co-founder Dan Holliday, now at experiential agency Not Actual Size.

‘We opened our NY office because our biggest client at the time, Mot­orola, was based over there - acc­ounting for close to 70 per cent of our business. As the volume of business carried on growing, the need to be on the end of a phone throughout Motorola's day became increasingly apparent.'

Holliday believes it is important to begin with ‘one of your own' to set the standards, systems and help def­ine what the culture of the company is all about. It is also a great comfort to the management team back in London that they have an exp­erienced member on the ground who can deal with things quickly as they happen. ‘As you grow you will then feel more confident in your own hires, but getting that initial core team right is critical,' he says.

But ad agency Mother went against conventional wisdom when it expanded into New York five years ago, setting up before any clients were in place. ‘We put our faith in the talent,' says co-founder and creative director Mark Waite. ‘We didn't open up around a piece of business, which left us free to concentrate on where we wanted to be.'

Mother now has nearly 60 staff in New York and Waite says the city has returned to form creatively after a patch in the doldrums. Even in these trying economic times, the US remains a land of great opp­ortunity. It is chastening to reflect, however, that amid the intense competition some business dreams will inevitably turn into nightmares.


ALREADY IN THE US

Agency The Red Consultancy
When opened 2003
Staff 15
Clients McAfee, Microsoft, Eye-Fi and Chevron

The Red Consultancy's New York office was created five years ago when one of Red's London directors, Mirella Cameran, volunteered to set up in Manhattan. She has subsequently become a full-time mum over there and the business is now led by Jon Cunningham in New York and Alice Chan in San Francisco.

Mike MorganBoth are Brits. After starting her career in London, Chan has been in the US for the past ten years. Cunningham moved to New York last summer after ten years at Red.

The San Francisco office was established in 2005 when anti-virus technology firm McAfee asked Red to set up an office to service its business. In the past year Red's US business has doubled in size and is now ten per cent of its total revenue. The San Francisco team recently won the Sabre award for best consumer electronics campaign for the launch of Eye-Fi.

Why move to the US? ‘Whether it is British sportsmen, British bands or British retailers, everyone wants to take a crack,' says Red chief executive Mike Morgan. ‘It seemed natural for us to look to the US as we've always had a large number of long-standing clients based there. With the likes of Microsoft, McDonald's, J&J and McAfee on our books we've always felt we get on well with dollar-driven businesses.'

That said, Morgan concedes it is a very ‘tough market' and his business is still far from cracking it. Yet a presence in the US allows Red to better service certain clients, adds to the agency's kudos and creates staff development and motivation opportunities.

‘We've recently run internal competitions for work experience exchanges from London to the US to happen this summer,' says Morgan. ‘There was huge demand for these
and we will repeat the programme soon.'


Agency Exposure
When opened 2004
Staff 20
Clients 15 including Casio G-Shock, Levi's, Dr Martens and Sony PlayStation

Exposure opened its first US office in LA back in January 2004, adding a presence in New York in 2005 and San Francisco at the beginning of last year. A Miami office is on the cards at some point in the next year.

‘Initially we had a client opportunity with Jaguar on the West Coast that came out of our European work,' says Exposure CEO Raoul Shah. ‘Our business is rooted in the key principle of the power of the network and in the US we have built up strong contacts on the ground.'

Raoul ShahA well-known US contact was lined up to run the LA office, with a senior member of Exposure's finance team sent out on a six-month secondment to ensure a stable beginning. A senior designer, Tom Phillips, moved over from the UK permanently and is now creative director for Exposure's entire US business, based in New York.

Helen Hamber, who heads up the LA office, came from Exposure UK and spent time as fashion director in the New York office before taking on her current role.

Success in America, says Shah, was partly built around appointing individuals familiar with Exposure's brand and operating systems. When the New York office opened Shah was personally spending one week out of every five or six in the US, but now that the business has become bigger and more structured he has scaled down visits to around six times a year.

Leveraging trusted US contacts to help find office space, event producers, IT support and good staff has been essential, says Shah. Being in the US has changed perceptions of Exposure, which is now seen as more than a UK business - and being active in the US allows the agency to provide its UK clients with a broader perspective
on trends.


PLANNING A MOVE INTO THE US

Agency Way to Blue
When opening This summer
Projected staff Three
Intended clients Major film studios

Digital consumer specialist Way to Blue is opening an office in LA in the coming weeks, staffed by a former move studio insider and two assistants.

Olly Swanton‘In LA you can't operate without assistants - if you don't have them you can't get meetings,' says Way to Blue founder Olly Swanton.

The agency is expanding into the US to meet demand from major Hollywood studios such as Warner Bros, Universal, Paramount, Dreamworks and Fox.

Finding the right staff has been challenging as they need to be able to fit into a European agency culture while knowing the US movie business.

The aim is to offer Europe-wide PR solutions for US studios and in so doing increase revenues generated in LA by 400 per cent over the next few years.

In essence the US venture will be a representative operation and costs are being kept down by sharing office space with another PR agency.


Agency Taylor Herring PR
When opening Autumn 2009
Projected staff Six
Intended clients Entertainment firms

Entertainment PR success story Taylor Herring intends to open an office stateside next year, almost certainly in Los Angeles. The strategy is to target companies in the TV, new media, home entertainment and celebrity space and offer a ‘new approach'.

James HerringTaylor Herring also plans to launch its events company in the US alongside its PR offering. In the UK the events company has handled film premieres and product launches.

‘We have had several US-based clients say to us that there is no-one like Taylor Herring operating in the US market and that there is demand for our creative-led approach,' says Taylor Herring managing partner James Herring.

‘We already work with a number of US companies such as Current TV, Fox, Disney, MTV, Warner Bros and have good understanding of how agency/client processes work. London is very much the media hub for major European launches, so this will also be attractive to clients.'

Herring feels it is still too early to be specific as to how the US business will operate in relation to the UK office, but fully expects it to be a standalone profit centre. He foresees ‘immediate opportunities' to exploit via the London office's existing international client list. Among these is Disney's phenomenally successful High School Musical brand.

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