Agency startups: 'Launching during COVID-19 has been a great leveller'

A new report, which estimates that more than 50 PR agencies have launched during COVID-19 in the UK, explores the motivations for setting up and business propositions that have thrived during the pandemic.

New agency leaders believe COVID-19 has allowed them to reset the business model (Photo: Getty Images)
New agency leaders believe COVID-19 has allowed them to reset the business model (Photo: Getty Images)

More than 50 PR agencies were launched in the UK during the COVID-19 pandemic, with many viewing the enforced lockdown as “a great leveller” in trading against more established rivals.

A new report by Wadds Inc estimates that at least 51 PR agencies have launched during COVID-19, with two-fifths of startups founded during the first lockdown between February and July. A further 22 per cent launched within three months of the first lockdown being eased.

Two-thirds of the COVID-era startups identified were set up in London, while nine launched in the South of England (17.6 per cent – see chart below).  

Although it may seem odd launching a business during a year in which the Top 150 UK consultancies' aggregate revenue declined by 4.3 per cent to £1.36bn, several agencies believe the pandemic provided a unique opportunity to “reset” the agency model and service proposition.

Darryl Sparey, managing director and co-founder of Hard Numbers, told the PR360 conference that, contrary to logic, setting up an agency during the crisis has proved beneficial.

“We felt like our proposition was even more valuable due to the recession because budgets are going to continually be under pressure and be scrutinised, and companies are going to need to grow their top line and demonstrate a return on their investment in comms,” Sparey said. 

“Both of those things are what Hard Numbers offers in spades. We have felt like the world has actually moved in the direction of our proposition as a result of the pandemic.”

For Raised By Wolves co-founder Sophie Coyne, launching during the pandemic was a good opportunity to “reset the agency model”.

“We wanted to try to found a new agency that could live at the intersection of the creative and comms disciplines,” she said.

“The industry on the advertising and comms sides are at a moment where they need to take a different direction [in terms of business models]. COVID-19 has reset people’s perceptions in a number of areas, including how they work [and] how they undergo projects, and this has been freeing for us. People are much more open to unorthodox approaches.”

Sparey told the PR360 conference that in many ways, the pandemic has been a great leveller for startup businesses like Hard Numbers.

Aside from fewer overheads in renting office space, he added: “I’ve seen a lot of agency leaders gripe about online pitching. I’m chuffed that exists and I hope that long continues. 

“We’ve pitched against much bigger, more established agencies competitively. And we don’t have the benefit of nice meeting rooms, filter coffee, impressive biscuits and all the other gimmicks you get. Zoom pitches equalise things for smaller agencies, so it comes down to the quality of your thinking, not the quality of your postcode. It’s given us a real platform for success.

“I’m not about theatre [in pitches] and I’m probably not going to win in a world where I have to out-‘jazz hands’ much bigger, bolder agencies than us.”

According to the COVID-19 UK Public Relations Start Up report, the motivations for setting up agencies include striking a better balance between work and family life, wanting greater independence, and a desire for individuals working in creative and professional services to be in control of their own creative and professional destiny. 

Startups in the study mostly focused on one of three areas of innovation: services, business model or specialism. New agency propositions focused on data, creativity and lead-generation, while many looked to provide services in the Environmental, Social and Governance (ESG), fintech and healthcare markets.


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