As PR agencies seek growth, thoughts often turn to international expansion. It’s a natural response to the growth ambitions that most agency entrepreneurs possess.
After all, why wouldn’t the success experienced in your domestic market, by attracting great clients and talent, not transfer seamlessly to other markets?
And often this can be true. There are many recent examples of UK-based agencies expanding overseas. Firms such as Brands2Life, Brazen, Milk & Honey, Manifest, Liquid, Tyto, Battenhall, Fight or Flight, W and Red Lorry, Yellow Lorry have all taken the plunge in recent times, opening offices across Europe, the US, Australia, and Asia.
With domestic growth harder than ever to achieve, it’s a sensible decision to look at markets where the economy is in better health or where an agency proposition stands out.
On many occasions, international growth is driven by client demand. It’s true to say that without a foundation client willing to place its trust in an agency, expanding overseas represents a risky enterprise. Despite this, the appetite for international growth seems to be increasing.
So, what are the options for expansion and is it a simple process of replicating the UK approach? The fact is that as in life, nothing is ever as straightforward as it might seem.
Opening in any new market is not for the faint-hearted. There will be legal, employment, and financial issues to be addressed. Firms should not underestimate the time this process will take and the distraction factor to the management of the core UK business (especially in challenging times). And of course, the cost involved in working with local advisors can make the toes curl!
Having navigated these hurdles, the priority must be to build the right team and to find the right clients. Providing international career opportunities for the UK team is often motivational and is important in exporting the culture and key working practices to any new venture. However, sending talented individuals from the UK office to open the doors and service clients is not enough.
Landing fresh from the UK and being expected to understand local business conditions, media landscapes, and consumer behaviours is an almost impossible ask. Ex-pats often struggle with building the right network to support new business plus it can be a lonely existence sitting in a different time zone without the operational support that’s taken for granted when working in the UK.
Successful expansion into new markets therefore takes investment. Bootstrapping from a team of one or two ‘company exports’ is a fraught business that can be deeply frustrating for those involved. Outside of the initial foundation account, winning new clients can be extremely tough unless there is a compelling proposition or specialist experience that stands out among local competition.
The answer can be to make a signature local hire and to build a launch team with the right mix of national and international talent. Sending out a statement of intent to the market by demonstrating commitment and more importantly strong local capabilities added to a strong proposition and sector expertise can make the difference between success and failure.
Taking the plunge into new markets is not the only way to scale an agency or to expand relationships with existing clients.
An increasing number of agencies are either signing up to long-established international networks such as IPRN, GlobalCom or EuroCom Worldwide or are building out their own network of best-of-breed partners. For example, Red Lorry Yellow Lorry has built its own branded network – Convoy – to offer up a specialist service for multi-national clients.
The partner model is a well-proven route to tap into the lucrative multi-geography account market. Many agencies combine a strong partner network with a smattering of local wholly owned offices to provide a compelling alternative to the large multi-national networks. Some, including Tyto, have specialised in a hybrid model, mixing small acquisitions with smart local hires to build out a credible international footprint.
Innovation like this should be given serious thought when agencies are exploring international scaling options. Opening in new cities, giving talent the opportunity to experience new cultures, and expanding client relationships into new markets will always be an attractive and exciting option. There’s no reason why any of the challenges that will be faced should be barriers to ambition so long as the decision on the route to be taken has been carefully considered.
Andy West held various international roles at Hotwire between 2010 and 2021 and played a significant role in its growth and acquisition strategy during his time at the firm. He is currently runs Westofcentre Consulting, a consulting firm advising agencies on growth strategies.
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