What you need to know ahead of launching an agency stateside
Up-and-coming UK agencies often dream of the moment when they can open that all-important office in New York. For many, expanding to the US represents a pinnacle of agency success. But the size, complexity and competitiveness of the market make it a tough one to crack.
Indeed, around half of all new businesses fail there within the first five years according to the Small Business Administration, and only one in three make it to ten years.
Mediatel spoke to five UK marketing leaders who successfully launched their business in the US to find out what drove the decision, the lessons they learned and the key piece of advice they’d give to other agencies planning to cross the pond.
Miles Welch,
Partner and co-founder,
Growth and M&A advisors Waypoint Partners
What was the key driver behind your decision to launch in the US?
“It was a combination of things: we knew it was a highly competitive market, however we realised that our positioning as growth and M&A advisors was really relevant there. We also found the ideal local managing partner – Brett Davis – who has great pedigree having been in-house M&A at Edelman and having sold his own brand strategy agency, Kelton Global.”
What was the most important lesson you learned?
“It’s crucial to strike a balance between adapting to the needs of the local market while staying true to your own company culture. We have found that it’s important to have a common language that we use across different offices, a common look and feel to the workplace and to find the right operating rhythm, so everyone feels informed and engaged.”
What is the most important piece of advice you would offer to other agencies?
“You need to really understand the US market and how you might need to change your UK service or proposition accordingly. The US market is very competitive. Businesses there tend to be bigger, more ambitious and often more commercial, so you have to work very hard at what you are offering. It takes time, however once you are established, the market has huge potential. New York is an ecosystem in itself – you don’t have to go outside it to find business if you don’t want to.”
Claire Humphris,
Global CMO, creative and marketing network Iris Worldwide
What was the key driver behind your decision to launch in the US?
In a word, the business opportunity. The market is huge. Success in one US state is the equivalent of one European country.
What was the most important lesson you learned?
You need scale and specialism. Specialism matters more. Many clients are still buying in silos.
The sheer number of competing agencies means clients want you to simplify what you to do to one thing, one headline, one box. Integration is perceived as something reserved for those brands that can’t afford multiple agency partners. Yet integration can be a differentiator. US audiences are huge consumers of commercial culture.
Brands need a creative product that weaves into people’s lives in a way that is relevant and meaningful. That requires a diverse skill set and creative that is not necessarily TV led. So there’s a market-led reason to build the case for integration…but you will need to make it feel like the simple answer.
What is the most important piece of advice you would offer to other agencies?
Scale means the buyers are more conservative, making selection more lengthy, more rational, more expensive, requiring more ‘proof points’. Clients will often fall back on what an agency has done in the past versus what you can do for them in the here and now.
Personal reputation is very important. Your client will be furiously career driven. Their choice of agency will be a personal reflection on them. Take the risk out of choosing you. Get other clients to vouch for you. Network like mad, in person. Win business through relationships to help you overcome your ‘start up’ brand.
Oh and the other one…NY isn’t the US. It’s a bubble with its own rules and views that is completely different to the rest of the US.
David Shiell,
CEO and founder, digital performance marketing agency House of Kaizen
What was the key driver behind your decision to launch in the US?
“In many ways, it was a matter of synchronicity and naive personal drive. Early on, we identified the US as an underserved market for our area of expertise. Our client growth in the UK was also increasingly spilling over into the US market – a key UK client was keen for assistance there.
“We knew that finding the right person to run the US business would be critical and we were lucky in that sense. An ex-colleague from our previous agency was keen to do his own thing there, providing us a like-minded regional MD ready to go. In all honesty, there was also some ego behind the move. We just loved the idea of having an office in London and New York.”
What was the most important lesson you learned?
“Culturally, America is very different to the UK. It’s been said that they are “two countries separated by a common language”, and there is no doubt that common language doesn’t necessarily equal common culture! Americans tend to view Brits as indecisive, not confident and self-deprecating about their abilities and achievements.
“On the other hand, the Brits generally consider Americans as overly positive and confident, “salesy” and perhaps not very trustworthy. These cultural differences can cause significant issues when it comes to communication between UK and US staff as well as how we approach our relationship with US prospects and clients.”
What is the most important piece of advice you would offer to other agencies?
“Ensure you pay for quality professional legal and taxation advice now – it may save you millions in the future! As best as you can, spend time thinking about where you are now versus your longer term strategy. The tax regime is very different from the UK with a larger choice of business structures – It is easy to end up with an inefficient structure.”
Chris Lee,
Chief financial officer, digital marketing agency Jellyfish
What was the key driver behind your decision to launch in the US?
“We launched Jellyfish in the US nine years ago and today it represents over 50 percent of our business. Moving into the large US market made complete sense for us as a business that was looking to grow.”
What was the most important lesson you learned?
“We learned just how important it is to explore client opportunities in person. New business won’t be won over the phone or on Skype. Yes, this does mean incurring travel costs but they should be treated as an investment that in my experience pays off. I’d also encourage any agency looking to expand into the US to find and nurture a ‘house’ client. This will give you a strong foundation from which to grow.”
What is the most important piece of advice you would offer to other agencies?
“My top tip would be to identify and recruit in-market talent to lead the operation, while offering them support from the existing UK team. This in-market knowledge and experience is essential for success. Of course, maintaining your agency culture is vital too. In our case, a senior member of the Jellyfish UK team moved over to the US to act as the agency’s cultural ambassador as well as the professional skill set.”
Kevin Freedman,
Chairman and founder, marketing agency Freedman International
What was the key driver behind your decision to launch in the US?
“Most of our clients in the UK were US brands so we wanted to get closer to their HQ. We had lost pitches for being too focused on Europe and not having a global presence. A key client win also created the opportunity for our US expansion. We won a global pitch for a hotel group and they required us to set up an office on the East coast.”
What was the most important lesson you learned?
“Our most important learning was that the market is not waiting for you; it’s a highly competitive market with entrenched agencies and ways of working. Top talent is expensive there and very few non-US agencies are successful in the long term.”
What is the most important piece of advice you would offer to other agencies?
“Be very clear on why you want a US office and on how much time and money you are willing to invest. Be prepared to invest a lot in new business and travel. You should also consider whether the US office will be “stand-alone” with its own clients and service offer or supporting your main agency as part of a combined group.”
Waypoint Partners and Entourage will be hosting a free panel event in London where UK agency leaders will debate the challenges and opportunities for agencies planning to launch their business in the US. More information here.