Bite tries to solve UK power problem

Bite Communications’ purchase of Credo marks the latest stage in the development of the consumer tech shop. Tom Williams asks where it will go next

David Hargreaves' arrival as MD of Bite last week did not go unremarked by the tech PR community. Those who knew Hargreaves were surprised at his decision to jack in Credo Communications, as the B2B specialist he set up after leaving Firefly Communications in 2003 seemed to be doing well.

Credo's fee income in the year to March 2005 was £254,000, and it could count names such as FTSE 100 software maker Sage and Barclays' small business subsidiary ClearlyBusiness among its clients.

But few doubted Next Fifteen-owned Bite's reasons for coveting Hargreaves as MD. Brands2Life co-founder Giles Fraser describes the hire as 'good news for Bite'. The agency, some say, has needed someone like Hargreaves to resolve its dual MD structure in the UK.

To clarify, Bite founder and now group CEO Clive Armitage moved to San Francisco in 2003 to help with US expansion. The following year the agency rejigged its UK management, hiring ex-Countrywide Porter Novelli MD and Fleishman-Hillard CEO Barry Leggetter as chairman. The move saw UK managing director Sheryl Seitz become MD of the agency's consumer team, with Bruce Dodworth taking charge of B2B. Last year Seitz left to join Bite's founding client Apple.

'It is quite difficult to reconcile a dual MD structure,' says one market source. 'Bite seemed to lose its way when Clive went to San Francisco.'

Necessary change
Armitage is indignant at such suggestions, pointing out that as UK managing director, Seitz 'did a phenomenal job at a difficult time' and kept some of her responsibilities when she made way for Leggetter. The changes in Bite's UK management structure between 2003 and 2005 were 'more about the UK [operation] moving from being the heart of the company to being part of a wider company', he adds.

Armitage set up Bite in 1995 with fellow Text 100 account director Matthew Ravden. Next Fifteen had created the firm to pitch for Apple – Text 100's work with Microsoft meant a potential conflict of interest.

By 2004, group fee income was £8.2m. From just eight people in 1995, Bite has grown to nearly 170 staff in the US, UK and Sweden. Bite has also won big tech clients that have anchored the agency's finances, such as Samsung in the UK and Sun Microsystems on both sides of the Atlantic.

Armitage says that after the opening of Bite's Stockholm office in 2002, Germany and then Asia are the next likely locations for expansion. Bite's management structures have had to work hard to keep pace with such growth. PRWeek US Bay Area Bureau chief Andrew Gordon says that since Bite's acquisition of San Francisco tech shop Applied Communications in 2003, 'it has become one of the more dominant technology PR specialists in the Bay area'.

He also reports that the firm has been 'hiring like crazy' since taking on the lion's share of the Sun account in April last year.

Armitage claims that much of Bite's success is due to the fostering of an informal and creative culture. These are the kinds of words many agencies use to describe themselves, but in Bite's case they may have some weight.

Siebel Systems EMEA senior PR director Alison Campbell says Bite does not indulge in the 'tremendously frustrating' process of moving around account leads. Paul Mackender, who replaced Dodworth as Bite B2B head when the latter was promoted to global strategy and business development director last year, has led the Siebel
account from the start.

Siebel's relationship with Bite was extended to the US soon after the agency hired the client's PR V-P Burghardt Tenderich as North America general manager in February 2004. The combination of Armitage and Tenderich continues to be a powerful one in the US.
London calling Campbell dismisses suggestions of a leadership vacuum in the UK following Armitage's move to San Francisco, but hints that Hargreaves' appointment will give the London office the dynamism it needs 'to stand on its own two feet'.

Yet Armitage and Hargreaves' talk of their combined 'audience research' strategy is hardly original. And in a buoyant tech market even Bite has been the victim of cut-throat competition from established specialists and effective niche players. Last September it lost Verisign to Hill & Knowlton, and in December Brands2Life prised Logitech from Bite UK's six-year grip.

Also, Bite's apparent financial success can be misleading. PRWeek's last Top 50 tech agency table by fee income showed Bite slipping to fourth behind Citigate (PRWeek, 27 May 2005). The firm's tech fees had declined during 2003 and 2004, due partly to a reclassification of some of its work for BT, while fifth-placed Nelson Bostock Communications increased its fees to within a few hundred pounds of Bite.

Leggetter says that full-year 2005 figures, not yet available, will show the first real growth in around three years. Bite UK has reported fee income of £4.5m for the 12 months to 12 July 2005, up ten per cent on the previous year.

There has never been a more crucial moment for Bite's London arm to stand firm. With rivals snapping at its heels, the agency's major figures cannot afford any less than a strong 2006.

Bite timeline
* 1995 Next Fifteen spins Bite out of Text 100 to pitch for Apple account.
* 1999 Bite opens in San Francisco.
* February 2003 Software giant Siebel Systems appoints Bite to £150,000 UK corporate and tech PR account.
* September 2003 Next Fifteen acquires San Francisco firm Applied Communications for over £1m.
* February 2004 Siebel Systems PR V-P Burghardt Tenderich quits to join Bite. Siebel later extends its PR relationship with Bite to the US.
* April 2004 Samsung replaces C&W with Bite on its UK consumer account. Barry Leggetter made Bite chairman. 
* February 2005 Bite extends its relationship with Samsung, taking the corporate account from Golin Harris.
* April 2005 Sun Microsystems hires Bite for the bulk of $10m global account.
* June 2005 Verisign reviews US account with Bite and hires H&K.
* July 2005 Seitz leaves Bite for Apple.
* August 2005 Bruce Dodworth promoted to global strategy and business development director.
* December 2005 Logitech drops Bite from UK trade and consumer account after six years and hires Brands2Life.

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