How agencies can make a big splash in the U.S.
The United States leads the pack as the top export destination for the UK, with advertising and marketing services exports reaching £15.6 billion in 2022, an increase of 15.5% year-on-year. As a result many UK agencies are opening offices in the U.S. to tap into this opportunity for international growth.
There is huge potential to expand and develop new business Stateside but there are also pitfalls and significant differences to consider. UK agencies with established U.S. operations shared their experiences and advice at the recent panel Unlocking Success in the U.S.: A Masterclass In Making A Big Impact.
The UK Advertising Export Group (UKAEG) arranged the session in partnership with Propeller Group for the Department and Trade’s International Trade Week. It featured Kieran Kent, Managing Director of Propeller, Kris Tait, Managing Director, Croud U.S. and Tamara Littleton, Founder and CEO of The Social Element with chairing handled by International Trade Director at the Advertising Association Aisling Conlon.
The session kicked off by identifying what UK agencies have to offer the U.S market. Kieran said: “When it comes to creativity, innovation and talent, the UK has a very strong reputation internationally and certainly in the U.S. market.”
The panel explained their approaches to setting up in the U.S. and agreed that the best strategy is to work towards having your own presence rather than depending solely on freelancers and agency partners. A presence means you can meet clients and new business prospects in-person, assume better control over client relationships and build business for the longer-term.
However, there are several routes to setting up stateside. Kris said Croud thought it valuable to have someone who knew the business well in place to reduce risk. He and the CEO relocated to New York to get the ball rolling initially and now the business is well established with several U.S. hires.
On the other hand, Kieran explained that Propeller considered sending a UK staffer to establish a presence but decided to make an “on the ground” U.S. hire which has been transformational in driving business growth.
The Social Element operated as a virtual office from the U.K. when Tamara launched the company and incorporated in the U.S. six years later. It does not have a central office but has a North American CEO and an MD on the East Coast and has hubs including Chicago and Atlanta.
Ditch any assumptions
There are significant differences in the way advertising and media operates in the U.S. – Kris said: “What I didn’t realise straight away is that we speak the same language, but it’s a very, very different market. I was definitely missing some things and it took a long time to educate myself on that. So, the first thing I did was hire the right people – people that understood the market and could teach me something when we first arrived.”
Location needs careful evaluation. Propeller focused on New York due to the presence of existing clients and the identification of a pool of prospects. TSE set up in Los Angeles but found this expensive as it didn’t initially realise how much individual states differ on employment laws, taxes, incentives and other factors.
Tamara said: “It’s worth reminding yourself to think about the individual states as almost lots of different territories, they’re all completely different and they all have their own laws.
“It’s not just about which state you should set up in, either. If you’re working with alcohol brands or any regulated industries, they all have different state regulations. And that can be a complete nightmare if you’re trying to do advertising or marketing around these sorts of regulated industries.”
Networking and building reputation
New entrants need to have a credible point of differentiation or specialisation as the U.S. is not short of agencies. The Social Element was an early player in social media and built trust with expert knowledge and strong case studies. Croud tailored its offering in part to U.S. businesses that wanted to scale internationally – a mission perfect for its unique global network of freelance digital marketing experts and their experience across a range of territories.
Just as in the U.K., prioritising networking via attending events, engaging with industry bodies and other tactics is vital for building contacts and generating awareness of your business. This is the big difference a physical presence in the U.S. can make in making in-roads.
Tamara said that investing in PR very early alongside entering awards was a smart decision for her agency to help with cut through and build awareness.
Everyone stressed how big conferences like Advertising Week New York and South by Southwest (SXSW) in Texas paid networking dividends. Attending British-American business events is also very useful. UKAEG runs a trade mission with the Department for Business and Trade to SXSW and is starting to plan the March 2024 visit soon.
Other tactics include setting up ‘lunch and learns’ for prospects to explain your business and present a point of view on an industry challenge (like AI). Online events or webinars can also attract attention if set up correctly – Propeller picked up its first U.S.-only client after holding a virtual event featuring American trade press journalists discussing editorial decisions.
Hiring and pricing
Hiring new talent is a skill. Kris said his agency had to find people that mirrored the needs of an entrepreneurial start-up in the market, so it is important to understand why people might join a just-launched agency. One of the main attractions is to work closely with the business owners and to experience things that might not be available in a big agency.
Tamara said that The Social Element now has a team dedicated to U.S. recruitment and employers need to be aware that contracts in the country reflect different expectations around holidays, salaries and termination notice periods.
Pricing of services needs to be understood if a business is to grow. Kieran advised agencies to be very strict on pricing. “As soon as you’re investing properly in the U. S. market, your own cost base obviously is going up. Doing business in America is expensive – you’ve got to make sure that you’ve got the right fee income alongside the cost base that you’re building in the U.S.”
Finally, setting up in the U.S. is not just for large UK businesses. Kris said: “You’ve got to start somewhere and I guess the point is that, yes, New York is lined with big agencies and big clients … but there is a lot of opportunity in the small and mid market as well. There’s so much opportunity with people that have $5,000 to spend a month on media.”
It takes determination, resilience and smart strategic thinking to be successful Stateside but these are attributes UK players have demonstrated time and again. If you prepare the ground and tap into the many sources of advice available then there is a huge opportunity for UK businesses to make a real impact in the US market and drive international growth.