New York City may be a saturated agency market, but a handful of PR firms from London have opened offices here in recent months citing its growth potential.
Trans-Atlantic expansion is a strategy being embraced by many UK firms of late. In the last year alone, almost a half-dozen mid-sized London shops have opened offices in New York, including Diffusion, John Doe, and Frank PR. Others that already had significant presences in Europe and the Asia-Pacific regions, such as Hotwire PR, have launched their first American offices in New York.
“Once you are a certain size in the UK, you only have so many options for growth,” says Ivan Ristic, cofounder of London-based Diffusion and also US president of its newly minted New York office. “You either expand in new sectors, such as by opening a healthcare or technology practice, or expand internationally.”
But why is this British agency invasion happening now – and why New York? For one, London agency executives emphasize that Europe is plagued by economic troubles. The European economy continues to be dragged down by low consumer demand as well as debt crises affecting many countries.
Some agencies, like Diffusion, serve European clients through agency partnerships in various cities.
“That model [for Europe] has worked well for us,” says Ristic. He estimates that 40% of the agency's campaigns launch in the UK and parts of Europe, including one for mobile software specialist Antenna, which also signed on as one of Diffusion's first US clients.
“But that [partnership] model wasn't going to be right for the US,” he explains.
Sherry Bitting, a global communications consultant in London who previously worked in New York for agencies such as Porter Novelli and digital agency Complex Media, says North America is the final frontier for London agencies.
“Having a presence in the US just completes the circle for a number of UK agencies that already oversee Europe and other international markets” she explains. “As more brands look to do business globally, a good PR agency that is in position to serve them in multiple markets will only win in the end.”
Plus, Bitting says a New York office “is considered the ultimate sign of success for many UK companies.”
As a three-year-old agency that works to connect brands with popular and contemporary culture, John Doe wanted a New York office in addition to its London headquarters, says agency cofounder Rana Reeves.
“We want to hear about [cultural drivers] coming out of New York from the very beginning and leverage that knowledge in other markets,” says Reeves. “We also want to take what we are learning in London and bring it to the US.”
New York also made sense for practical reasons. “As far as language, there are two countries where it is easiest for an agency from London to open: Australia and US,” he says. “It is also easier for us to integrate here because US culture is so prevalent in the UK. You come to this country with some sort of understanding of what is going on.”
Yet the big question is whether UK-based agencies will be able to make their mark in New York's crowded agency ecosystem.
Brendon Craigie, group CEO and cofounder of Hotwire, says UK agencies can find success in America because they offer a different approach and business model than their US counterparts.
“We have a slightly different approach to thought leadership, which is more focused on content-based marketing to drive greater engagement with audiences,” he says. “We also challenge the traditional retainer model which still seems quite dominant in the US compared with the UK. Our business model makes fees more aligned with results.”
Hotwire has grown its US staff to 12 in New York and San Francisco, its first offices in North America that the company launched last November. It works with clients such as software provider Pegasystems and Buy.com.
When researching the viability of a New York office, Diffusion's team concluded there is “a market opportunity on the East Coast for mid-sized players,” says Ristic. Diffusion has about 40 staffers in London, a number it would be thrilled to have in New York someday.
“I think you're seeing agencies of similar size from the UK move into the US because they too recognize the opportunity,” explains Ristic. “We feel like we can fit between the big agency networks and on the other end of the scale, the boutiques.”